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K.C. NEEL
Rogers Communications is poised to join a growing number of MSOs that are buying up sports teams in an effort to control the spiraling sports rights fees they are paying.
Rogers has bid to buy the Toronto Blue Jays baseball team from Interbrew SA for between $C110 million ($U.S.674 million) and $C150 million.
The team is only part of the deal, however. Rogers expects to buy CTV Sportsnet as well as the Toronto sports arena SkyDome for an additional $C90 million.
Cablevision Systems started the trend by acquiring the N.Y. Knicks NBA and Rangers NHL teams, as well as Madison Square Garden arena and network about five years ago. The idea: own the teams, the network and arena to control license fee costs.
Comcast did the same thing in Philadelphia by acquiring the NHL's Philadelphia Flyers and the NBA 76ers, as well as the arena there.
The deal essentially put PRISM and the Philadelphia SportsChannel out of business because Comcast signed those teams to its own regional sports network.
Owning a team can be profitable. According to Total Baseball, by 1990, 26 teams split $27.5 million in national rights revenues. Last year, each team bagged $15 million. However, local revenues can dwarf the revenues derived from national rights. In 1999, the Yankees earned $58 million from their local contract; the Chicago Cubs earned $56 million; and the Atlanta Braves took home $51 million in local revenues.
Not everyone wants a sports team. Liberty Media bought the Colorado Avalanche hockey team, Denver Nuggets basketball team and the Pepsi Center arena last year as part of a larger deal that also included On Command, a PPV service aimed at the hotel industry. The company immediately sold off the sports assets.
"That business is hard to operate," says one insider close to the company. "It's an ego-driven business and emotional one. That's definitely not Liberty."
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