March 22, 2012

Too Long Too Soon

McCovey Chronicles notes that the Giants are entering an era in which large cable TV contracts for their rival puts San Francisco at a disadvantage:

The Giants, however, sold their rights back in 2007, and sold them for 25 years. Although they scored big in 2007, looking at the deal in hindsight, it seems the Giants missed out on the recent boom in TV and cable deals for baseball teams: I couldn’t find numbers on the yearly fees, but if they sold them for 25 years, they lose negotiating leverage for the next 20 years.

Why does that matter when they only negotiated the contract 5 years ago? Because cable television deals for sports have skyrocketed in the past 3-4 years.

The Giants do own 25% of CSN Bay Area. Nivra, the author of the post, believes this just provides equity to the team. Equity, however, can bet turned into cash, either through loans, selling of shares, or getting CSN to share profits. CSN Bay Area, due to their sweet deal with the Giants, should be making a lot of money. A winning Giants team is important to the profit, however, so I suspect the team and he broadcast will find a way to get some of that money to the team.

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