Not even coming back with a counter-offer is a poor move. What they're doing can hardly be considered negotiating.
Huh? An a la carte model in the home market, which is what you're suggesting, is NEVER going to happen. Ever. And there's nothing wrong with the Astros/Rockets network for their position on that. There isn't a single RSN in the entire United States that isn't on the extended basic tier in the team's home market. To agree to that would put the Astros and Rockets at an enormous financial disadvantage compared with the teams they're competing with. The "sports tier" concept would kill any championship aspirations for either franchise for at least the next 20 years, probably more. Maybe some of you are willing to make that sacrifice to see them on TV, but I think there's common ground that can be found before resorting to that. That AT&T statement isn't straight forward at all and is EXACTLY why a public meeting needs to happen. It's the typical vague bull****. (The CSN side isn't any better, of course.) For ATT: what is the proposed cost? Why isn't it fair? What is the historical lack of viewership? It's no different than Crane/CSN saying the price they're asking for is comparable to the deals already made by providers for Dallas teams. Anyone can make vague, blanket assertions. Try actually showing us with hard evidence. The sooner actual information is out in the public, the sooner folks like Parker can figure out exactly what the issues are and potentially apply pressure to the appropriate people. Right now, we're all guessing.
It's not. Comcast/NBC Sports Group will negotiate a lower figure to give to the Astros/Rockets if they're not getting the projected advertising revenues. The Rangers are getting $80 million/year from their TV deal for the next 18 years, plus an additional $100 million payout up front. If the Astros relented to the "sports tier" in their home market, their audience would be roughly 5% to 10% of the Rangers, and their contract would fall accordingly. The team would have nowhere near the money necessary to field a competitive payroll. You'd basically be the Oakland A's -- maybe once every few years the stars would align, and that's if you had a brilliant GM, but any realistic shot at building and holding a contender is gone. http://www.forbes.com/sites/christinasettimi/2012/03/21/baseballs-biggest-cable-deals/
it's not hyperbole.. if anything it is understated. The Astros are the highest leveraged team in baseball. It was a large portion of the reason that the sale took so long to complete. Baseball itself had to vet the financial numbers to make sure the team would be profitable. Guess what was in those financial numbers guys????? I'll give you a hint - it starts with C and end's with N If Crane doesn't get fair compensation, the Astros could go bankrupt. Period.
agreed. the truth always lies somewhere in the middle. neither side is going to be completely open and honest with the public, nor are they both innocent in this.
If what you say is true, I hope the jerkhead doesn't get "fair compensation" and the Astros go belly-up. Doesn't Crane end with E and not N?
Uncle Drayton drummed up the concept to increase the value of his franchise. Crane didn't. Haters gonna hate
And I was indicating that CSN compensation models that had to be heavily vetted in order to pass approval of Major League Baseball
The basic tier model is a great idea, if you are game-watching fan of the Rockets/Astros. If you are not, this is just an extra charge being added to your cable bill for what value added? Ziltch, zero, nada. Most people are really starting to get pissed off at the constant increases in their cable TV bills. And what drives those? When the content providers - in this case the Rockets and the Astros - insist on charging more per customer, with the alternative being to cut off their channel if the cable provider does not agree. And when the channel is cut off, the true dumb-asses in our community lurch out and angrily insist that the programming be reinstated immediately, damn the cost. This attitude they patiently maintain for a while, at least until their cable bills are increased, yet again. At which time the same dumb-asses mentioned above become agitated about their rising cable rates, which of course they themselves caused to increase with their protesting against their cable company when they attempted to hold the line against the content providers (Rockets/Astros). Of course all of this is bad enough when you want the programming in question. But when you have no interest in the programming and your rates are jacked up for that anyway, that is really not just irritating, it is patently unfair. As I expect Mayor Parker will rightfully agree.
I don't have a problem with the concept, which is being done all over the country. The issue is none of the other major Houston providers are buying the price Jim Crane is selling. This has denied the majority of Rockets fans an entire season of watching their team and I hope he suffers severe, long-term financial consequences as a result. Using your words, if the CSN compensation model provided to MLB by Crane proves to be unrealistic, so be it. I wish him the worst.
That's all fine and good, as long as that logic is consistent on the part of the providers. It's not. They've agreed to numerous deals under the new RSN pricing structure, and not just in New York and Los Angeles. Crane says the figure the Astros are looking for is comparable to what FSSW and the Rangers got in Dallas. Why draw the line in Houston when you're willing to pay the price elsewhere? I expect Mayor Parker is also very intrigued by that question. Crane says the figure they're looking for is based on precedents set elsewhere -- precedents that the providers themselves agreed to. If the providers successfully hold the line in Houston but not Dallas, then the Astros will be at a massive financial disadvantage relative to the Rangers for the next 20 years, all because the providers weren't willing to make that same principled stand in Dallas. Now, can I prove that CSN's asking price is indeed equivalent to the Dallas agreement? Not yet. But that's why these negotiations need to go public. Both sides are just throwing out vague, made-for-good-PR soundbites. CSN needs to show us the specific precedents they're using to calculate their asking price. The providers need to tell us what an acceptable deal is to them and show evidence of what a typical Houston ratings market goes for. There's entirely too much on both sides that we simply don't know, and rectifying that should be the first priority for Mayor Parker.
I wouldn't be so sure about that. As technology inevitably emerges, in this case faster, cheaper internet and streaming devices, more people are going to seriously consider ditching cable and going through streaming services. Cable companies will eventually have to do something to counter this, and lowering the base price and adding a-la-carte options is a good way to do that. Also, it doens't have to be "a la carte". For example, ATT could lump it in with a regional sports package or the HD premium tier (same package that NFL redzone and some outside FSN stations are on). Fair enough, but there's got to be some compromise. The reality is that the Astros and Rockets have not created a lot of demand in this city - they're not going to get what YES or CSN Philly gets in those markets, or even what the FSSW got in Dallas with the Rangers/Mavs (having been to two recent World Series' and with an NBA title). It's just not comparable. Even with the Rockets current growth, it's going to take another year or two of good basketball before the casual fan starts wanting to watch many games. And don't even get me started on the Astros. They have no right to demand what national RSNs get because they haven't put out a product that the casual fan wants to watch. I want our teams to be successful as much as anyone but I'm not going to side with CSN if they are indeed asking too much for what their product is actually worth. True, but ATT was much more to the point in that statement than Crane/CSN have been in their whole "I want my CSN campaign". They are trying to get fans to b**** and moan in order to get what they want.
I was lumping in "sports tier" with the a la carte theme. Either way, the audience would drop dramatically and only the true diehards would pay. I don't think that day is coming any time soon, since no RSN in the country has gone to that in its home market. These are incredibly long-term contracts. Most are 15- to 20-year agreements (though there are limited opt-outs). You can't look at demand merely in the past year or so and act as if that's an accurate representation. These things are cyclical. Seven years ago, the Astros were coming off a World Series and the Rangers were a laughingstock. You have to look at demand in the good times and the bad to get an idea of what a fair rate might be for the overall 20-year period. On the whole, the Astros/Rockets should get a similar per subscriber fee to what the Rangers/Mavs command in Dallas. That cuts both ways. Generally, the longer one side has to express their viewpoint in something like this, the more likely we are to want to slap them. So if you're comparing the 30-second "I want my CSN" campaigns to a one-line statement from a professional spokesperson, it's no surprise which will be more agreeable. That said, when the providers have spoken at length, there's plenty to pick apart there, too. Most notably, they're trying to get customers to believe they're fighting for the little guy across the board when instead they're picking and choosing the most convenient battles. Personally, it ialso is infuriating that they're trying to sell me on this "people shouldn't have to pay for what they don't want" logic while I have about 25 channels (HGTV, Oxygen, etc.) that I've never watched and combined cost much more than CSN Houston. But I have no recourse to get out of them. What gives? The bottom line is that both sides have holes you can pick in their arguments, and we need to know the particulars before knowing where to place blame.
why is it so hard to believe that the providers are holding out in unison because the demand for the Houston product isn't strong enough and they look at this as a perfect battle ground? They held out in unison in NY and LA. The demand in NY only became large enough because of Linsanity. The demand in LA was strong enough such that they got it immediately. Remember when Viacom held out? Everyone was pissed then. Providers got all the blame. Portlands demand is weak. And our bandwaggoning ass town only supports a winner - and without seeing the rockets, they don't even know that's what they are.
The New York and LA Markets are the largest in the country and probably are not the best comparison to ours. However, your comment about the situation with Viacom is noteworthy. Everybody was pissed and the providers got all the blame. It clearly appears that the people in this market are behaving somewhat more thoughtfully and in a more sophisticated manner than the people did in the example you noted. Just lurching out and blaming the providers is the how ignorant dumb-asses behave. Follow the money. Who is the primary beneficiary here? Why the sports teams, of course. Of course the cable companies are, given the opportunity, every bit as greedy as these sports teams are, with Comcast currently leading the way on that score in the Houston market. However, AT&T is gaining quickly, apparently with a view towards becoming the market leader in cable TV greed (based on excessive rate increases to their customers, especially from add-on fees like mandatory equipment rentals) as soon as possible. At some point if consumers want to reign in their costs, they have to identify the source of the problem and solve that, rather than just yowling about the symptoms of the problem, which in this case is the Rockets/Astros being off of the air. Between the ridiculous costs to go see a game, especially with regards to concession costs, and the television rates that they insist on imposing on everyone, regardless of their interest in this programming, this has gotten well out of hand. Finally, there is at least a little bit of push-back beginning to take place here in Houston. And not a moment too soon.
It's all capitalism. Everyone is trying to make the most they can and the consumer covers the burden up until the point that the cost outweighs the benefit. It has been throroughly noted that the paradigm in the cable industry is shifting and that is whey there is continual pushback from providers at every new contract negotiation. Viacom and RSN's are noteworthy and comparative because the two groups actually both have very strong followings for their products and are therefore some of the primary reasons that people subscribe to a provider in the first place. As such, they are able to charge a premium. The point I continually try to make has to do with the sale of the Astros. Had that event not taken place, I would probably be more inclined to side with the providers and say the price being asked is exhorbitant. However, given that the Astros are so highly leveraged - and that approval and ultimate sales price had to be so thoroughly vetted, I am under the belief that the potential revenue streams from the network had to be vetted thoroughly as well. If this is the case, that would indicate that they are in line with market current market prices. Given the size of our market and ignoring the current product on the field/court (which is necessary given the length of the contracts - as teams will surely rise and fall over the duration), why wouldn't houston be able to attain FMV. We aren't Portland... or Milwaukee... or even St Louis for that matter.
