With pitchers and catchers set to depart for spring training in just two months, and uncertainty surrounding local television broadcasts, one of the Seattle Mariners’ main sources of revenue, the team’s financial transactions this offseason. is taking a more cautious approach.
The team’s financial outlook is already a hot topic for a fan base frustrated by the team’s lack of spending, but the Mariners’ ownership group will take full control of regional sports network ROOT Sports Northwest on January 1. It will become even more uncertain as the day progresses. .
John Stanton, Mariners Chairman and Managing Partner, wanted to make clear that Mariners fans will continue to be able to watch games through their cable provider as they have always done.
“Our top priority is to ensure that every Mariners fan can watch a Mariners game from home every night,” Stanton told The Seattle Times on Friday.
Which media company will produce Mariners games and who will foot the bill for operating costs remains an open question for Stanton and the Mariners’ ownership group.
Since 2013, Mariners First Avenue Entertainment has owned a majority stake (71%) in ROOT Sports NW. FAE partnered with minority shareholder Warner Bros. Discovery, which has provided full operational support for the Mariners’ game production.
However, Warner Bros. Discovery is exiting all local sports television operations, as the regional sports network model is collapsing nationwide, with the Mariners owner retaining a 100% stake in ROOT Sports NW. It means welcoming the new year. .
In the 10 years since FAE took control of ROOT Sports, Comcast’s subscriber numbers in the local market have declined by 65%, from 3.4 million in 2013 to about 1.2 million today. According to industry insiders with direct knowledge of
“The economic impact is real,” another industry source told the Times. “ROOT Sports feels it, and the Mariners feel it, too.”
The financial impact has left the Mariners in an unexpected quagmire.
Mr. Stanton met with ROOT Sports staff on Tuesday to discuss the station’s future, four industry sources told the Times.
Mr. Stanton promised to make a decision on the organization’s next steps by mid-January, but could not guarantee all employees would keep their jobs, the people said.
The uncertainty surrounding ROOT Sports comes on the heels of Comcast Xfinity’s announcement on October 10 that it would nearly double the cost of subscribing to its regional sports networks (RSNs). As a result, viewer ratings for Mariners games next season are expected to drop significantly, and the team will not receive any additional cuts due to Comcast’s fee increases.
Since Comcast’s announcement, the Mariners have reduced player salary commitments by approximately $44 million. Notably, they traded popular third baseman Eugenio Suarez to the Arizona Diamondbacks and then traded former top prospect Jared Kelenic to the Atlanta Braves in order to terminate the contracts of Marco Gonzalez and Evan White. This is an addition to the trade.
According to USA Today, the Mariners’ annual salary was about $140 million last year, ranking 18th out of 30 MLB teams, and was expected to increase gradually in 2024.
Stanton and the Mariners’ ownership group are considering two options with ROOT Sports NW, as outlined by industry insiders.
1. The Mariners could absorb the operating costs of producing live games and maintain the status quo in 2024. The exact cost of producing the game is not clear, but it will be a significant new investment. In the short term, that is considered the Mariners’ most likely decision, the person said.
2. The Mariners could partner with Major League Baseball, which is “actively pursuing” teams to join its newly created broadcast division. MLB took over local broadcasts for the Diamondbacks and San Diego Padres midway through the 2023 season as their RSNs deteriorated.
MLB announced it has the ability to broadcast local games for 17 teams. It’s unclear when and how MLB’s unified model will generate revenue, and the Mariners may take a wait-and-see approach to MLB.
There are advantages and disadvantages to each option, just as there are advantages and disadvantages to the Mariners having ownership of RSN.
“They are now in control of their own destiny, and that’s a good thing,” the source said. “The downside…is that you’re at risk too.”
ROOT Sports also owns the local media rights to the NHL’s Seattle Kraken and NBA’s Portland Trail Blazers, adding two additional uncertainties to RSN’s future.
The Kraken have a multi-year deal with ROOT Sports, with annual television rights fees said to be within the standard $15 million to $30 million range for NHL teams. Warner Bros. Discovery is in the business of producing the Kraken’s live games (including pregame and postgame shows), as well as Mariners games.
The Blazers signed a four-year broadcast rights contract with ROOT for an undisclosed amount in June 2021, and the contract is scheduled to run through the 2024-25 season. The Blazers have their own in-house operations for broadcasting games.
Mariners are never alone This is to prepare for an uncertain future regarding broadcast media rights. The viability of the RSN model has crumbled in recent years as cable TV subscriber numbers have plummeted.
For years, television rights packages have been a major source of funding to subsidize the soaring salaries of players in various professional sports. This situation is breaking down, and teams and leagues are looking for new revenue options.
Television rights deals signed by 14 MLB teams are at risk of not receiving agreed payments after Diamond Sports Group, owner of Bally Sports Networks, filed for bankruptcy in March. There is. The Diamondbacks and Padres were the first two teams to lose contracts when MLB took over broadcasting. The Minnesota Twins’ contract with DSG expires at the end of the season and they will not have a network. Based on further bankruptcy court rulings, the Cleveland Guardians and World Series champion Texas Rangers could lose their television contracts in the coming months.
The league has promised to recoup up to 80% of the money teams were scheduled to receive from Diamond Sports, but the reduced revenue still forces teams to cut payroll costs.
As a result, the Padres plan to cut their ballooning payroll by $40 million to $50 million, which is why they traded star player Juan Soto to the New York Yankees last week.
The Rangers have said they won’t add a significant contract to their hefty salary, and the Guardians are looking to reduce their salary by trading All-Star closer Emmanuel Clase and starting pitcher Shane Bieber.
The Twins are looking to cut their $154 million payroll by $20 million to $25 million this offseason.
“It’s certainly had an impact,” Twins general manager Derek Falvey said during the recent winter meetings. “We’re in a situation where our contract expired last year, so ultimately there’s uncertainty about what’s going to happen. That’s just a fact. That’s the reality of our business. We’ve been focusing on the payroll area. We’ve set team records in the last two cycles. We knew there would be some ups and downs, but ultimately we were impacted by revenue uncertainty. It will be.”