Sea Times Article:
https://www.seattletimes.com/sports...ditch-root-sports-and-show-tv-games-for-free/
Inside the NHL
“Back to the Future” was a 1985 science fiction comedy film starring Michael J. Fox and Christopher Lloyd released the final decade most sports fans last saw all of their favorite team’s televised games on free antenna channels.
Of course, those free games were limited to one or two a week. But free nonetheless. Pay TV was still fledgling, but by the 1990s’ onset of the regional sports network (RSN) model, fans willing to pay could watch most games on their favorite team’s schedule.
Unfortunately, even viewers unwilling to pay were often forced to through cable package bundling. That led to an inflated valuing of the RSN model itself — not to mention escalating sports salaries paid by teams to star players built largely off revenue from those cable packages.
Fast forward three decades, and it’s all imploding, with TV viewers deserting cable in favor of streaming and leaving teams and RSN operators scrambling to find a future. One option increasingly eyed by teams — especially NHL squads such as the Kraken in search of broader audiences — is what’s been likened to a “Back to the Future” approach of showing games on free channels as in the 1980s and prior.
The difference now being, instead of one or two weekly games, it would be the majority freely accessed. Sounds great, right? Well, there are obstacles. But right now, the current RSN model is unsustainable and as sports fans you should be very concerned.
Here in Seattle, we’re seeing the not-so-pretty ramifications of RSN model demise on two team fronts with ROOT Sports Northwest.
With the Kraken, who are paid an annual TV rights fee by ROOT Sports said to be within the standard $15 million-$30 million for NHL teams, they haven’t grown their product as well as they’d like. We’ve mentioned previously that Kraken ticket demand has lagged on online resale exchanges, reflecting a lack of demand that goes beyond a poorly performing team.
A great way for any new team to increase interest is through television. But with fewer people willing to pay for packages that include ROOT Sports, the “eyeballs” on Kraken games
haven’t been there.
Despite last spring’s strong playoff run, this season’s first eight Kraken games on ROOT Sports in October averaged just 13,781 viewers and a 0.7 rating. Last season, the Kraken in October averaged 15,103 viewers and the same 0.7 rating on ROOT Sports over nine games.
So, viewership remained flat from year to year. Given it wasn’t great to begin with, this is not the exposure a third-year franchise needs.
Sure, an optimist might see flat viewership as a bonus given how Comcast-owned Xfinity
pulled a fast one on fans the eve of the season opener by moving ROOT Sports to its highest cost tier. That forced fans to pay $18.50 more per month.
Still, die-hard sports fans will
usually pay whatever it takes. Given Kraken games were already being viewed mostly by hockey die-hards, it isn’t too surprising the numbers held despite the higher cost.
But it’s more “casual” or “new” hockey fans the Kraken desperately need. And Xfinity’s hike hasn’t helped.
The Kraken broadcast is among the league’s finest — headlined by John Forslund, Ed Olczyk and JT Brown, with analysis by Alison Lukan and Nick Olczyk and reporting by Piper Shaw. But all that talent hasn’t translated to viewers.
So, why not make the broadcasts free? Put the same crew entirely under the team’s umbrella, partner with a local antenna channel or two and show games there? NHL teams are more apt to explore this route since they already make far less in local rights fees than MLB or NBA counterparts.
Sure, they likely won’t get the same rights money as previously from subscription-based RSN services. At least not right away. Instead, the money made and split with channel operators would come from advertising sold on free broadcasts.
But new viewers? Wow, those would be there.
Just ask the Vegas Golden Knights, who went to free broadcasts this season after their AT&T Sportsnet RSN partner folded up shop. Vegas partnered with Scripps Sports to show 69 Golden Knights games for free throughout a multistate territory.
Through five October games, they’d already exceeded all national cable TV numbers for their games last season on ESPN and TNT by 135% — averaging a whopping 8.5 rating in the Las Vegas market.
“The viewership and engagement we are seeing for the Golden Knights this year have grown incredibly and should dispel any doubts about the power of an over-the-air broadcast channel to serve sports fans,” Scripps Sports president Brian Lawlor said last month in a release. “The Golden Knights wanted to reach more of their fans, and they clearly are.”
And reaching new fans generates money beyond TV — through sales of future tickets, merchandise, increased sponsorships and more. So, what’s stopping the Kraken?
Well, they have two more seasons on their ROOT Sports deal after this one. The NBA Portland Trail Blazers have one more.
What nobody will say openly, but plenty within the sports industry are wondering, is whether those deals survive.
The other Seattle-based team directly impacted by the RSN model meltdown is, of course, the Mariners, majority owners of ROOT Sports with AT&T Sportsnet as minority partners.
When Xfinity hiked prices, both the Mariners and Kraken howled equally. As badly as the Kraken worried about lost viewer potential, the Mariners were the ones paying millions of dollars in rights fees to generate and grow NHL viewership.
With growth potential now stunted, you’d have to think the Mariners are looking for a way out of those Kraken and Blazers deals.
When the Mariners were sold to a group fronted by John Stanton in 2016, the value of ROOT Sports was pegged at about $175 million for purposes of the sale. Various industry valuation standards later estimated it closer to $300 million or $400 million.
And the Mariners, armed with that asset, increased spending on player payroll accordingly. Not as much as many fans wanted, but to a level they were comfortable with.
Now, though, with the RSN model bleeding subscribers and value nationwide, that comfort is gone. You expected the Mariners to commit massive long-term funds to free agent Shohei Ohtani? Sorry. The smart money ruled that out last February
when RSN bankruptcies and closures began.
The Mariners right now have to worry about what happens if their nine-figure-valued ROOT Sports asset and accompanying revenue goes the way of Blackberry phones and Kodak film.
As for the Kraken, they need more fans. Their next step, beyond the obvious of winning more games, should be to go “Back to the Future” and get as far away from the RSN model mushroom cloud as quickly as possible.
Geoff Baker:
gbaker@seattletimes.com; on Twitter:
@GeoffBakerTimes. Geoff Baker covers hockey and is a sports enterprise and investigative reporter for The Seattle Times.
