- The Washington Times - Thursday, August 29, 2002

NEW YORK (AP) A season-ending baseball strike would deliver a harsh blow to baseball's television revenues, with teams being forced to give back more than $600million to their TV partners.

Ramifications would be felt for years to come. Fans' anger over another work stoppage likely would lead to diminished television ratings, lower advertising revenues and a reduction in the rights fees that have financed the sport's spiraling salary structure.

"It is troubling to me," Fox Sports president Ed Goren said. "If they go out, I think the sentiment of baseball fans is, 'Don't rush coming back.' I can understand that feeling."

Most of baseball's immediate financial loss from TV revenues would be having to reimburse Fox for the loss of up to 29 postseason games in the second year of its $2.5billion, six-year contract.

Networks usually assign close to 90 percent of their payments to baseball's postseason, when the game is most popular with home viewers.

Fox is paying Major League Baseball about $340million this year, according to a person familiar with the contract who spoke on the condition of anonymity. Under those terms, baseball would need to compensate the network for more than $300million for the loss of five regular-season games and the entire postseason.

Baseball likely would choose to rebate that money by taking reduced payments over the final four years of the contract a blow to the small- and mid-market teams who count on the national TV fees to make up for their smaller local revenues.

The price tag for baseball would be even higher because additional money would have to be paid in penalties. Fox would be reimbursed for its production, studio and on-air talent costs, as well as for reduced advertising rates caused by a diminished interest in the sport following a strike.

An arbitrator would determine what the network's losses are and can award as much as $230million in damages to be spread out over the remainder of the deal.

Individual teams would also be on the hook for their local TV and radio contracts, which were worth a combined $571million last season. With just over one-sixth of the season remaining, that would cost teams about $100million.

ESPN's rights fees for this season are much smaller, $39.9million. About one-quarter of the cable network's games are in the final month of the season, leading to about $10million in rebates. That number would jump substantially if the strike went into next season, when ESPN is due to pay baseball $175million.

Baseball also would be hurt long term, with local and national networks unlikely to pay increased rights fees when new contracts come up.

"If there's a strike, it would have a negative effect on ratings, sponsorship and advertising sales," Goren said. "That will devalue the next contract baseball negotiates with television."

Television sports consultant Neal Pilson said the outlook isn't as dreary as it might sound.

"In the short run, I would expect reduced attendance, diminished ratings and lower sponsor interest," said Pilson, the former president of CBS Sports. "But this is not the end of the game as we know it. I have seen a lot of apocalyptic pronouncements. Baseball will recover, albeit slowly and with difficulty. There is a deep-seated affection for the game. We'll all live through it, but it won't be a happy time."

Networks are still formulating their strategies for replacing hundreds of hours of lost baseball programming. If the strike begins tomorrow, Fox will air a one-hour special in place of its Saturday afternoon game. The air time for the other four Saturdays of the season, as well the time set aside for the afternoon postseason games, would be returned to the affiliates.

The entertainment division would take over the lost prime-time postseason time slots, but the network is scrambling to decide whether to move the launch of the new season for many shows to October instead of after the World Series.

Postseason baseball is usually not profitable for networks unless the World Series goes at least six games, but it does give exposure to a network's new entertainment season. The ratings for last year's World Series were more than 60 percent higher than Fox's prime-time season average.

"There's the lost opportunity of promoting the new prime-time schedule to a lot of eyeballs during the postseason," Goren said. "It is creating serious scheduling and economic problems on the prime-time side."

ESPN has many more hours of programming to replace, with about 35 games and 150 hours of total programming at risk because of a strike. ESPN plans to show college football, NHRA, studio shows and a variety of other programming in place of baseball.

TBS will replace its Atlanta Braves games with movies. WGN, which carries the Cubs and White Sox on its national superstation, will substitute mostly movies and talk shows.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide