Category: Baseball

Cable throws a strike. No, wait, it’s a ball.

I’m cautiously optimistic and peeved, even though I’ll probably get most of what I wanted from the beginning.

Cable television said it offered to match DirecTV’s deal for the “Extra Innings” package of out-of-market games, but Major League Baseball said the proposal fell short.
…

IN Demand, owned by affiliates of the companies that own the Time Warner, Comcast and Cox cable systems, said Wednesday it was agreeing to the terms and that its partners would carry The Baseball Channel when it launches in 2009 to at least the same number of subscribers who will get the channel on DirecTV.

Here’s why I’m cautious:

“The communication sent to our office today by iN Demand is not responsive to that offer,” [Bob DuPuy, baseball’s chief operating officer] said. “In spite of their public comments, the response falls short of nearly all of the material conditions (among them requirements for carriage of The Baseball Channel and their share of the rights fees for Extra Innings) set forth in the Major League Baseball offer made to them on March 9.”

DuPuy said the March 31 deadline to match remains.

At this point, with ten days to go, I don’t imagine this deal falling apart. Yay, me, since I tried to watch a game on my computer last night. The experience was as excruciating as I’d imagined. Three hours of television isn’t meant to be watched on a tiny screen. I’m not signing up for DirecTV, more because I don’t want to drill holes in my house than anything, so the status quo¹ would be excellent.

I’m peeved because this means that Bud Selig gets what he wanted all along, times two. That makes me angry. Sure, this can be seen as a shrewd move, but that’ll be nothing more than spin. Selig sold out his hardcore fans. He only relented when they complained, and probably then only because someone else in the Major League Baseball office interpreted the obvious signals of disgust. He shouldn’t be rewarded for that with many extra millions. He will be because I’m an addict. Still, it makes me ill.

Go Phillies.

¹ I know my cable company will have to raise prices to pay for this. I’m crazy enough about the Phillies that I have a higher threshold for the inevitable financial pain than I should.

Contract every team except Boston and New York.

Major League Baseball finally announced its deal with DirecTV to air is Extra Innings package. It’s not an exclusive deal at this point, but it might as well be. The cable industry and Dish Network have until March 31st to match the terms agreed to by DirecTV. Cable would be hard-pressed to match that offer because DirecTV is insane. I can’t imagine a scenario in which Dish Network could agree, having only 50,000 Extra Innings subscribers last year. Still, this is over the top:

Dish Network assailed the new agreement. “When our customers are suddenly cut off from watching their favorite sports teams on TV,” the company said in a statement, “it is time to ask whether the market is working. This is both anti-competitive and anti-consumer.”

The deal is certainly anti-consumer, for all the reasons I’ve stated. But the market is not wrong. Two companies that reach a mutual agreement can’t be considered a broken market. Stupid, definitely maybe, but not broken.

As a perfect example of how stupid Bud Selig is in his patronizing claims that fans can still see lots of baseball, consider the 2007 schedule offered by Fox. Beginning April 7th, it will air a game every Saturday. In the first month we get these choices:

Saturday, April 14

  • Los Angeles Angels of Anaheim at Boston Red Sox

Saturday, April 21

  • New York Yankees at Boston Red Sox
  • St. Louis Cardinals at Chicago Cubs

Saturday, April 28

  • Boston Red Sox at New York Yankees
  • Chicago Cubs at St. Louis Cardinals

Saturday, May 5

  • Seattle Mariners at New York Yankees

My vision might be bad, but I see April 21st and 28th looking exactly the same, with only the stadium scenery changing. Whoopee. And the two bookend weekends present us with either the Red Sox or Yankees. That’s some amazing diversity. Well done, Bud. Thanks for looking out for fans.

The FCC whiffs.

Even though any such action could benefit me, I’m against this out of principle:

The government is investigating a proposed deal between Major League Baseball and DirecTV Inc. that has had fans in a tizzy.

Remember that Senator John Kerry sent a complaint letter to FCC Chairman Kevin Martin.

Martin, in reply, wrote Kerry: “I share your concerns regarding this proposed deal.”
…

“I am concerned whenever consumers cannot purchase the programming they want or are forced to purchase programming they don’t want,” Martin wrote.
…

Martin wrote that the agency has “contacted the parties and requested additional information about their proposed arrangement. Once we have this information, we will report to you on the deal’s implications for consumers and any recommended changes to the law to ameliorate any harms to consumers.”

As I stated before, the FCC shouldn’t involve itself in this. As stupid as I think it is, Major League Baseball should be free to be stupid. If they’re prevented from being stupid, the market won’t get the chance to teach them how to take care of customers. In the end, we’ll just have more madness from Bud Selig and Co. because there is no legitimate pressure put on them to signal what is and isn’t wise. I’d rather rip this band-aid off now and let the backlash finish it.

Or not, of course. I could be in the minority of fans negatively affected by this who cares enough to complain and not switch to DirecTV. Whatever the truth, let’s find out the right way.

This should’ve happened six months ago.

I’ll have more to say on today’s announcement that Sirius and XM intend to merge after I hear the details from tomorrow’s webcast. For now, I want to express how thrilled I am at this possibility. As a Sirius customer, I love the idea of getting Howard Stern and Major League Baseball on the same service. As an investor, I like the possibility of reduced total expenses. But mostly, it’s about Howard Stern and the Phillies.

Yes, I know this has almost no chance of passing through the FCC. Give me one night of joyous anticipation.

If the home team doesn’t win, I don’t care.

Someone from Major League Baseball finally spoke about the looming deal to provide DirecTV with exclusive rights to the Extra Innings package. In an Op/Ed in USA Today, Tim Brosnan, Major League Baseball’s executive vice president, business, had this to say in defense of whatever action Major League Baseball eventually announces.

We offer the following assurances to our fans: Any deal for the Major League Baseball’s Extra Innings subscription package, when concluded, will in no way affect a single fan’s ability to watch games of his home club in his home market. Major League Baseball will continue to make available on basic cable, satellite and broadcast television more games by far than any other sport (on average, more than 400 games per year are telecast in each market); a subscription package of out-of-market games will continue to be available to a broad segment of our fan base through either MLB Extra Innings or MLB.TV, its broadband counterpart.

There are two fundamental flaws in that paragraph. One reveals why MLB’s executives will make the right decision only if they’re lucky. The other is based on inaccurate marketing fluff.

Basically, MLB has no business acumen. It’s decision is based on justifying what it wants to do rather than doing what is justified. Mr. Brosnan states that the deal for Extra Innings “will in no way affect a single fan’s ability to watch games of his home club in his home market.” This is either ignorant or insulting. The issue is not about home clubs in home markets. MLB thinks the hardcore fans it courts with Extra Innings are merely locals who want more games. It is ignoring those fans who subscribe to Extra Innings to see their favorite team. I suspect that’s the majority of subscribers.

In my case, I subscribe to watch as many Phillies games as possible. I don’t care one bit about the Orioles or the Nationals, the two teams I’m supposed to focus on given my geographical location. I will not ask for forgiveness for developing a rooting passion that doesn’t involve a franchise that qualifies as a toddler or a franchise with a misguided superiority complex.

To Mr. Brosnan’s second claim, of course baseball broadcasts far more games than any other major sport. It plays at least twice as many games as every other sport. This is not a major feat. It’s certainly not something to brag about, given how easily commenter dianagram deflated the non-argument on USA Today’s Op/Ed blog:

Let’s do some math …. 162 games * 30 teams / 2 teams per game = 2430 possible games. You are therefore offering 1/6th of the total universe of games. The NFL offers 4 games per week on basic cable or major network (out of a possible 16 games). They therefore offer 1/4th of their total universe of games. What am I missing (I mean, BESIDES the 60 games a week on Extra Innings)?

Major League Baseball doesn’t understand its fan base. It’s too busy making decisions it thinks customers should want, decisions that comply with the strategy it hopes to pursue, while its best customers adamantly tell it that they want something else. To make this situation worse, MLB is dragging this out at a time when the focus should be on the field. Trading goodwill for a few dollars is bad long-term business.

USA Today’s opposing editorial can be found here.

A government takeover can’t be far behind.

This is only peripherally about the Major League Baseball Extra Innings package, although I will discuss that angle again. But I can’t let it pass when a politician so bravely steps in to assist in a way that highlights his previous hypocrisy. Consider:

A proposal to make Major League Baseball’s “Extra Innings” exclusive to DirecTV has drawn the ire of Sen. John Kerry.

The Massachusetts Democrat said he plans to raise the matter with the chairman of the Federal Communications Commission at a hearing Thursday.

“I am opposed to anything that deprives people of reasonable choices,” Kerry said in a statement. “In this day and age, consumers should have more choices _ not fewer. I’d like to know how this serves the public _ a deal that will force fans to subscribe to DirecTV in order to tune in to their favorite players. A Red Sox fan ought to be able to watch their team without having to switch to DirecTV.”

So many issues pop up, but it’ll probably make the most sense to first address the MLB decision in the context of Sen. Kerry’s remarks. MLB is stupid if it proceeds with this asinine marketing strategy, but it is free to hurt its business if it so chooses. It is not obligated to “serve the public” any more than Whole Foods is obligated to cater to vegans. That, of course, brings up the notion that consumers should have more choices. I view keeping cable as an Extra Innings choice as desirable because it specifically impacts me. But MLB should have the same range of choice to run its business in whatever way it believes will maximize its profits and its brand, even if that means running both into the ground. Sen. Kerry’s rhetoric will serve well the economic populism that pervades our public discussion, but it’s misguided.

With his statements, Sen. Kerry also managed to make a mockery of his stances on most economic issues and many personal choice issues. If Senator Kerry is in favor of people having reasonable choices, why isn’t he promoting Social Security reform, for example? I contribute, even though I’d prefer to put my money in personal investments controlled by me and backed up by actual assets. But I don’t have that choice. How does that serve the public? I’m sure I could walk through a point-by-point list of Sen. Kerry’s campaign issues and find many more examples where he’s been less than a champion for allowing people to have choices. (I have little doubt I can find multiple examples where Sen. Kerry believes that businesses should be limited, so I won’t challenge him there.)

Greater than all of this, though, is the simple fact that Chairman Kevin Martin and the FCC have no regulatory control over cable that would enable it to take action against Major League Baseball. Sen. Kerry should know this. I assume he does, but that doesn’t sell because then the government¹ isn’t there to come to the rescue.

¹ Major League Baseball should not have anti-trust exemption. There shouldn’t be anti-trust prosecution against MLB if it didn’t have the exemption, but that’s getting further into that issue than I’m interested. Since these are the rules we’re operating under, and MLB is happy to benefit from them, I won’t feel bad if/when Congress goes after the owners for this exclusive deal with DirecTV. Feed the snake enough and you will get bitten.

The rare positive bears the stain of the negative.

More on Major League Baseball’s decision to give its most faithful fans the shaft sell exclusive rights to the Extra Innings package to DirecTV, this time courtesy of Buster Olney’s Insider blog at ESPN (subscription required). Olney has received a multitude of e-mails since writing about this deal several days ago, most of them negative. He has seen the occasional positive spin, even if it’s flawed:

Count me among the minority of baseball fans that’s actually in favor of the DirecTV deal. No one talks about the monopolistic control Comcast has in the cable industry and, as anyone with even a passing familiarity with economics can tell you, the winner goes to the highest bid. Comcast likely gambled on the fact that MLB wouldn’t want to deprive some subset of its fans, but MLB never blinked. Now, I not only finally get the Comcast monkey off my back, but I’m also saving a lot of money every month with the same access to more channels and premium content. What’s not to like?

— Jon Phillips, Seattle, Wash.

I don’t care if some people like the deal, but at least like it for the correct reasons. From Mr. Phillips’ e-mail, every benefit he projects onto this deal is a benefit he could’ve gotten before the deal, while still enjoying Extra Innings. I contend that getting “the Comcast monkey” off his back wasn’t that important to him. The savings from DirecTV didn’t suddenly improve with this deal. I suspect they’ll dissipate, since DirecTV will now have monopoly power over Extra Innings. The access to channels with DirecTV didn’t change. DirecTV had the package every year leading up to this deal. Yet, Mr. Phillips never switched. His hatred of Comcast, however justified, is clearly irrelevant based on his own behavior. The only thing that changed is cable lost the last content it had that Mr. Phillips valued. That is what will send Mr. Phillips to DirecTV. The rest is just feel-good beliefs.

But is that enough to make this a good deal for Major League Baseball? After doing some research into adding DirecTV – I can be outraged and still cave to my addiction – to my house, there are very real costs involved to me. Also, the goodwill that baseball possesses as our national pastime and that it rebuilt after the labor shenanigans in ’94 can’t have a definitive dollar value, but it exists. That extra $30 million DirecTV reportedly offered is not “found money”. Major League Baseball may value it more, but it has a price.

MLB to fans: Go Eff Yourselves!

I could write a profanity-laden entry about this story, which is what I want to do. Even that wouldn’t begin to convey how angry I am at this move.

Major League Baseball is close to announcing a deal that will place its Extra Innings package of out-of-market games exclusively on DirecTV, which will also become the only carrier of a long-planned 24-hour baseball channel.

Extra Innings has been available to 75 million cable households and the two satellite services, DirecTV and the Dish Network. But the new agreement will take it off cable and Dish because DirecTV has agreed to pay $700 million over seven years, according to three executives briefed on the details of the contract but not authorized to speak about them publicly.

Where do I begin? I’ve been a baseball fan since I first started little league in the late 1970s. Through nearly three decades, I’ve followed the sport with a passion reserved exclusively to this one game. I ‘ve watched games when my choice was the Game of the Week on Saturday. Then we got TBS and the Braves. Then we got the Orioles. Then the Cubs and White Sox. With ESPN, we got a few games a week. Then Extra Innings came along, and instead of the Braves, Orioles, Cubs, and whatever random game involving the Yankees ESPN showed, we got the Braves, Orioles, Cubs, White Sox, Yankees, Phillies, Cardinals, Pirates, Giants, Mets, Angels, Tigers, and so on. I could watch (almost) any game every night of the week for six glorious months of the year.

And now Bud Selig and the Major League Baseball owners decided that a few million dollars for each team were worth selling out those of us who don’t subscribe to DirecTV.

I subscribe to cable because it suits suited my needs. I dutifully subscribe to the Extra Innings package every spring so that I can watch the Phillies throughout the summer. Living in the D.C. area, this is the only chance I get to see my team on a regular basis. Now, under this greedy, anti-fan move, I can choose between the Nationals, Orioles, Braves, Cubs, and White Sox. Notice that my Phillies are nowhere in that list. I assume Major League Baseball is indifferent.

I have little doubt that Major League Baseball will compare its decision to the NFL’s exclusive deal with DirecTV. The obvious difference was that the NFL was never on another service. Every time I moved, I knew that if I wanted the NFL package, I had to subscribe to DirecTV. Major League Baseball, on the other hand, is yanking a service it offered for years. Making me change technology hardware would be rude. Making me change the services I subscribe to is hostile. This is not progress, no matter how many extra pennies it might put into owner pockets. (Also, the NFL is appointment television because there are only 16 regular season games. Major League Baseball is every night of the summer.)

I’m not sure it will make money for DirecTV. The Extra Innings package had approximately 750,000 subscribers last year. Many of those undoubtedly subscribe via cable. Not all of them are going to switch. The price of the package last year on cable was $169, if I remember correctly. To recover $100 million per year, as well as whatever extra costs it will incur to carry high-def games, DirecTV will likely raise the price. How many of that now reduced subscriber base are so die-hard that they’re indifferent to price?

Looking beyond the basic economics, the nature of satellite versus cable is a bad harbinger for the deal. What if a customer doesn’t subscribe to DirecTV and doesn’t want to switch? Too bad. What if that customer lives in an apartment or a house with an obstructed southern view? Again, too bad. But all is not lost, Major League Baseball will say. That customer can still watch the same games on The Internets, in a small pop-up window on a computer. Watching a clip on YouTube is significantly different than watching a 3-hour game in a window the same size. This will not end well.

Major League Baseball is free to make whatever decisions it wants. I don’t have to like it, and I can certainly call bullshit on its stupidity. In the same way I don’t receive baseball radio broadcasts because I prefer Sirius over XM, I’m now screwed because I prefer cable over DirecTV. Making 162 games a premium purchase is an obscene abuse of common sense. But that’s what we’ve come to expect of Bud Selig, isn’t it? He failed to kill the sport in the ’90s, but he’s finally on the right path.

(Source: Baseball Musings)

Behold the Annual Hall of Fame Post

Should I write something new about Dale Murphy being bypassed by the Baseball Writers’ Association of America for the ninth time? Probably not, since it would be the same entry I wrote in 2004 and 2006. I’d lament how stupid it is to discount players from the 1980s because their statistics do not match the statistics of players from the 1990s. Following on that, I’d also question how voters can keep Mark McGwire out of the Hall of Fame because his greater statistics are allegedly steroid-enhanced, yet continue to dismiss the lower statistics from players like Dale Murphy, who we know was clean. Then I’d quote the only sane writer, ESPN’s Jayson Stark. I might use this quote:

Murphy’s stats may not look so dazzling stacked up against the numbers of today. But in his heyday — the decade of the ’80s — Murphy got more hits and scored more runs than anyone in the National League, tied Mike Schmidt for most RBI and was second to Schmidt in homers. He was also a back-to-back MVP, a five-time Gold Glove winner, a proud member of the 30-Homer, 30-Steal Club and a big enough star to lead the entire sport in All-Star votes in 1985. So he sure deserves to be getting more than 56 stinking votes.

This year, 50 voters marked Murph on their ballot, which is fewer than 10%. Shame on the writers, but I shouldn’t be surprised given that two writers didn’t even deem Tony Gwynn or Call Ripken worthy, casting blank ballots. The process needs to change, or at least waive Murph’s remaining eligibility and send his candidacy to the Veterans Committee. That’s his only chance to claim his rightful spot in the Baseball Hall of Fame.

But, no, I’m not going to bother with a post this year to express my outrage. That would be redundant.

Sports is a business.

First, with the Phillies’ recent acquisition of starting pitcher Freddy Garcia, we the team now has one too many starters. With many teams in need of a proven starter, a trade will occur before spring training. The odd man out is Jon Lieber, but that’s not what’s important. This quote from Phillies assistant GM Mike Arbuckle explains how to operate in a market.

“If we’re sending Christmas gifts to starting pitchers, we’ll probably only have to send out five,” he said with a laugh. “But we’ll let numerous teams come to us and see what the best offer is. Supply and demand may work in our favor.”

Bud Selig and the other owners in Major League Baseball talk a lot about parity, which can be seen as little more than talent redistribution when carried to the extreme. Yet, it doesn’t work out that way. Some teams seem to build talent in excess of what they need.

In this case, the Phillies and starting pitchers. Would it make sense for Major League Baseball to take one of the Phillies’ pitchers and give him to the Devil Rays, for example, because they need starters? Of course not. The Devil Rays, and every other team, are left to extract that player from the Phillies in exchange for another player. As any reasonable person could predict, the Philadelphia will try to improve its roster (demand) by offering a starter (excess supply). This is logical, so why do so many in our government feel that this does not apply to every other situation in economics?

Next, Senator Arlen Spector has interesting opinions about the NFL and its collectivist bargaining of television rights. Consider:

Whatever his motivation, Sen. Arlen Specter, R-Pa., claimed at the end of a Thursday hearing that he will sponsor legislation to strip the NFL of the antitrust exemption that permits the league to negotiate its television contracts for all 32 franchises, rather than have the teams do so individually.

“Wouldn’t consumers be better off if teams could negotiate [individually]?” Specter said. “This is the NFL exerting its power right down to the last nickel.”

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Specter said the NFL should not use the exemption to negotiate exclusive programming packages such as DirectTV Inc.’s “Sunday Ticket,” which allows viewers to watch teams outside their regional market.

“As I look at what the NFL is doing today with the NFL channel with the DirectTV … a lot of people, including myself, would like to be able to have that ticket,” Specter said.

Among the grievances cited by Specter in what he termed a “fans be damned” mentality demonstrated by the NFL was the relocation of franchises, and decisions like the one that moved Monday Night Football from ABC, an over-the-air network broadcaster, to ESPN, a cable entity.

Using Sen. Spector’s logic, couldn’t individuals better negotiate wage contracts with employers tailored to meet their own needs? Perhaps collective bargaining is a great benefit for those involved. Perhaps not. But those involved should decide how they best wish to negotiate, free of government intervention or protection. The NFL’s structure is a voluntary club in which individuals and corporations transact with known rules. This is not the problem.

I could get behind Sen. Spector’s sabre-rattling about antitrust exemptions, but he’s attacking the wrong beast. He apparently can’t fathom the idea that the government should have little role in the operation of business. Remove/reduce the concept of antitrust and this matter goes away. Sen. Spector doesn’t want that; he is a politician, after all. But he seems to believe that being a football fan also entitles him to manipulate a market because he’d rather get the NFL and DirectTV’s combined product without having to include DirectTV. No. Subscribe to DirectTV or don’t, but leave the government out of it.

On Sen. Spector’s last point, what would he propose regarding Monday Night Football? That ABC receive a monopoly on broadcasting that, even if someone else (ESPN, like ABC, owned by Disney) is willing to pay more? I don’t recall reading anything about a fundamental right to free broadcasts of the NFL in the Constitution.

Finally, the Orioles are getting a new JumboTron, except they don’t want it. They’re not paying for it, so they want a bigger JumboTron.

The Maryland Stadium Authority agreed yesterday to move forward with the purchase of a new Mitsubishi video screen for Camden Yards despite objections from the Orioles.

Orioles officials say the DiamondVision screen is too small and technologically inadequate and plan to file a temporary restraining order in Baltimore Circuit Court today to block the $1.5 million purchase. The restraining order would give the Orioles time to move the dispute to arbitration as is called for in the team’s lease for the stadium.

On the surface, this is little more than a contract dispute. It should be decided as such given the constraints of reality. It’s possible to accept the facts while rejecting the assumptions. The taxpayers of Maryland should not be forced to subsidize the purchase of a bigger video screen for a private business.

Major League Baseball and the NFL are businesses and should be treated as such. Politicians who interfere *cough*Tom Davis*cough*, for whatever reason, are anti-capitalists trying to break fundamental laws of economics. They should not be tolerated.

Hat tip to Baseball Musings for the last item.