Inside sports business
These critical games played by the Mariners down the stretch are having the positive impact you’d expect on the team’s local television numbers.
Sources indicate the team’s Nielsen ratings in the 1.8-million-household Seattle designated market area (DMA) are up about 20 percent in 2014. Numbers were relatively even with last year early on, but have picked up in the second half and should see the Mariners finish with roughly a 5.0 share.
One ratings point in the Seattle DMA is worth 18,000 households, so the team will finish with an average of 90,000 households watching within the city’s greater metropolitan area at any given time. A 20 percent hike isn’t off the charts, but the Mariners already enjoyed solid TV numbers beforehand despite poor on-field play since their last winning season in 2009.
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Seattle is one of those baseball markets, just like Pittsburgh, known for “overperforming’’ in ratings through both thick and most usually thin on-field performances. Even a modest increase will help the Mariners’ bottom line, especially with them now controlling a reported 71 percent of the ROOT Sports NW regional sports network (RSN).
The Mariners now have more direct access to TV ad revenue. But that doesn’t mean they can suddenly jack up ad rates and rake in cash from existing buyers because of their ratings spike.
Nielsen ratings are notoriously incomplete and there is no direct correlation between higher numbers and what can be charged advertisers. But unlike more-exact, closely-guarded in-house numbers accumulated directly off TV receivers by cable and satellite companies, Nielsen ratings are the only ones available to all sides and that means advertisers still base payments largely off those rough guesstimates.
If, say, a company’s negotiations last winter with ROOT Sports NW called for the Mariners to match the 4.0 rating of last year, then that’s the team’s minimum goal. If ratings hit 5.0 like this year, the advertiser comes out nicely ahead at no extra cost.
Where the network takes a one-way hit is if the team fails to reach the agreed-to ratings. Then, the companies that paid for advertising can come back and ask for a partial reimbursement.
And that, folks, is one of the few times sports teams aren’t completely covered in the business world.
It isn’t like fans buying a full-priced ticket to a game in Anaheim last week and getting stuck after the Los Angeles Angels put Class AAA scrubs on the field after they’d clinched a division title.
If you charge for quality TV ratings, you can’t deliver less.
But anyway, the Mariners delivered this time and can now try to profit when ad contracts come up for renewal. ROOT Sports NW can tell advertisers with a straight face that the team is really worth a 5.0 share and ask for higher rates.
But remember, if they convince companies to pay more – and that isn’t always guaranteed – they had best deliver that 5.0 rating. No excuses next year if the Texas Rangers and Tampa Bay Rays aren’t decimated by injury and suddenly drive the Mariners from a wild-card contender back to being just another third- or fourth-place team.
So, that’s the risk. You have to deliver the goods.
Also, it’s worth remembering the biggest money in local TV sports isn’t from advertising, but through the carriage fees networks charge distributors. For all the territory covered by ROOT Sports NW through its partnership with DirecTV, there are smaller cable and satellite distributors that want to offer games to their viewers as well.
The more distributors an RSN has, the more money it makes. Where the Houston Astros ran into big trouble is they couldn’t get rival distributors to pay the high costs their team-owned RSN was charging.
A big reason? The team was terrible.
So, a winning season helps. In the Mariners’ case, they stagger their TV deals with distributors so a handful get renewed every winter and some will come due shortly, right after that spanking new 5.0 market share turned in by the team.
Now, remember, nothing is automatic. Distributors are becoming crankier by the week with the higher-than-ever rates various RSN entities are charging for rights to show their games. If anything, the competitive season turned in by the Mariners and the resulting higher ratings will at least help them justify what they already were charging.
It isn’t an automatic pot of gold. But every little bit helps. You’d have to imagine a winning year on the field and on TV does give the Mariners extra pocket change to go after another premium bat or two next winter, right? Especially with the offense — Robinson Cano addition and all — poised to score only a dozen or so runs more than last year, right?
Well, let’s leave that one for another week.