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The Looming Broadcast Rights War For The Phillies

Flickr photo by Jason Burmeister

If you live in or around Philadelphia, you might want Comcast SportsNet to hold onto the broadcast rights to the Philadelphia Phillies after 2015 — even if you believe, by all accounts, that Comcast is evil. Here’s why.

Philadelphia, currently the 4th-largest television market in the U.S. with 2.95 million TV households, is the home of Comcast headquarters, and the city practically a Comcast stronghold. More than two million homes in the city get their cable TV service from Comcast, and the corporation has gone to great lengths to make sure it stays that way.

Comcast also owns the city’s regional sports network, CSN Philadelphia, which currently reaches roughly three million homes in the city and surrounding area. (Their website says “over three million viewers”, but we’ll round it down for now.) The network currently collects a monthly subscriber fee of $3.03 from each of those homes. That pays for the rights to broadcast games involving the Phillies, 76ers, Flyers, and Union to that area.

CSN is currently paying the Phillies about $35 million per year and the 76ers just under $13 million for broadcast rights. Comcast owns the Flyers, so those numbers aren’t public, but they’re likely in the $16-$18 million per year range. Terms for the network’s deal with the Union have never been disclosed, but at this point they’re probably a rounding error on the ledger.

Here’s how the math works out, then, for CSN Philadelphia:

Monthly Sub Fee
Homes
Annual Sub Revenue
$3.03
3 million
$109.08 million
Team
Yearly Rights Fee
Phillies
$35 million
Flyers
$13 million
76ers
$18 million
TOTAL
$66 million
Sub Revenue
$109.08 million
Difference
$43.08 million

Pretty sweet deal for Comcast, right? It could get a lot more expensive soon. CSN’s contract with the Phillies expires after the 2015 season, and thanks to Time Warner Cable’s $7 billion deal with the Los Angeles Dodgers and the billion-dollar deals Fox Sports struck with the Texas Rangers and the L.A. Angels of Anaheim, the Phillies are quite keen on getting something very similar — and Fox just might be the catalyst for such a deal.

Why? Because Fox’s new contract with Major League Baseball, which begins next season, allows for games to be shown nationally on Fox Sports 1, but on one condition — Fox must also own the local television rights to games shown on the national network. Only two of the twelve teams that will have local TV deals with Fox RSNs in 2014 are in the Eastern divisions of either league — the Atlanta Braves and the Miami Marlins.

To bolster that count, Fox Sports’ parent company, News Corporation, spent $1.5 billion on a 49% stake in Yankees Entertainment and Sports (YES) Network. That allows Fox Sports 1 to broadcast New York Yankees games, which greatly enhances the ratings potential of the national network. However, the Boston Red Sox, New York Mets, and Baltimore Orioles all own their own RSNs, so Fox can’t get access to those games.

This is why Fox, according to this Yahoo article by Jeff Passan, has the hots for Philly. To get a team with as devoted a TV audience as the Phillies on Fox Sports 1 would be a massive coup, and it would allow Fox to charge more money for the national network down the road. With Fox Sports 1 expected to launch in 90 million homes in August, every penny per month more Fox could charge for that channel would bring in an additional $10.8 million per year in subscriber fees, and the Phillies could boost the national network’s subscriber fee by a nickel or more.

The quest for those nickels, however, would lead to an ugly, protracted bidding war between Fox and Comcast, and you, dear cable TV subscribers in Philadelphia, will be the ones who end up footing the bill.

The Comcast Building. Flickr photo by Mihai Bojin.So why back Comcast? Because a Fox victory would mean a much larger hike in your cable bill. Let’s say CSN strikes a deal with the Phillies worth as much as $120 million a year. In order to cover that cost and still make a profit, CSN Philadelphia would raise its subscriber fee from $3.03 to just under $5. That would mean almost a $2 hike in your monthly cable bill, which will be automatic if you’re one of the two million Xfinity customers in that area.

However, if Fox manages to pull the Phillies away from CSN, the end result will be a new network, which means another fee on top of the $3.03/month CSN Philadelphia already gets. Let’s say Fox were to give the Phillies as much as they’re giving the Angels ($3 billion over 20 years), or better yet, set up a new channel in which the team is the majority owner, much the same way the Yankees own YES. They could also pull the Sixers into the deal, as Comcast as done in Houston with the Astros and Rockets. The resulting channel would demand a subscriber fee of no less than $4 per month.

Comcast’s response, then, would be to cry foul and try to block carriage of the new channel to get a lower price, claiming its fighting for you, dear customers. (Try not to laugh too much at that notion.) Fox would then urge Phillies fans to call your cable provider now and demand to watch your team! They will, of course, and faced with flooded phone lines, Comcast would be forced to back down and carry the new channel — but not before they add a surcharge of $4 or more to your monthly cable bill to pay for the channel.

In other words, the same mess that’s in Houston now, which will be duplicated in L.A. next spring, could come to the City of Brotherly Love in 2016 if Fox gets the Phillies.

So in the end, my Philly friends, the increase to your cable bill would only be half as much if Comcast keeps Fox from encroaching on its turf. Either way, however, it will go up. If you’re a die-hard Phillies fan, you might begrudgingly accept this and move on. If you don’t watch sports at all, though, perhaps the best way to let Comcast and Fox know how you feel about these shenanigans is to stop giving them your money.

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Live in Philadelphia? Bracing yourself for yet another increase in your cable bill? Leave a comment below with your thoughts. Then be sure to check out this site’s home page to find out how much money you give to pro and college sports leagues every year, simply by having a pay TV subscription.

6 Responses to The Looming Broadcast Rights War For The Phillies

  1. joeb says:

    But the other side of this moving the Sixers and Phillies to a fox network will be good for people with dish and directv. Also a big lost like that will give CSN only the flyers and likely kill TCN.

    • Dave Warner says:

      Indeed, and that’s a bit of info that I did not have until after I wrote this article. Perhaps everyone up in the “People’s Republic of Comcast”, as another commenter called it here, would be more than happy to pay a bit more to see Comcast get some comeuppance.

  2. Steve says:

    What about us trying to cut the cable cord. A move to fox means we might get it online??

  3. jude says:

    I have been waiting for years for Comcast to lose control of the Phillies on tv- you have to subctribe to them even if you live across the street from the ball park in order to watch 90% of their games. I would be glad to pay someone else a fee to watch them and have the satisfaction of knowing that Comcast was not getting a nickel of it! They rode the “We are the only game in town” horse way too long and it’s time to dismount.

  4. Chris Sanders says:

    I can go back to Dish Network if Comcast loses the Phillies Yeah! Dish Network will have Fox Sports 1

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