With pitchers and catchers expected to report to spring training in just two months, uncertainty surrounding one of the Seattle Mariners’ primary sources of revenue – local television broadcasts – has led to a still more careful in the team’s financial dealings this offseason.
The financial outlook of the organization, already a hot topic for a fan base increasingly frustrated by the team’s lack of spending, will become even more clouded on Jan. 1 when the Mariners’ ownership group takes complete control of its regional sports network, ROOT Sports Northwest.
John Stanton, president and managing partner of the Mariners, wanted to be clear: Mariners fans will still be able to watch games through their cable provider the same way they always have.
“Our top priority is to ensure that all Mariners fans have access to Mariners games from home every night,” Stanton told the Seattle Times on Friday.
Which media entity will ultimately produce Mariners games — and who will foot the bill for operational costs — remains an open question for Stanton and the Mariners ownership group.
Since 2013, Mariners’ First Avenue Entertainment has owned a majority stake – 71% – of ROOT Sports NW. FAE had worked in partnership with Warner Bros. Discovery, a minority stakeholder who provided full operational support to produce the Mariners games.
Warner Bros. Discovery, however, is pulling out of all of its local sports television operations, meaning the Mariners’ owners will enter the new year with a 100% stake in ROOT Sports NW at a time when the regional sports network model is losing ground. collapses nationally. .
In the decade since FAE took control of ROOT Sports, Comcast subscriptions have fallen 65% in the local market – from 3.4 million in 2013 to about 1.2 million today. today – according to an industry source with direct knowledge of the situation.
“The financial impact is real,” another industry source told the Times. “ROOT Sports feels it, and the Mariners feel it.”
These financial fallouts plunged the Mariners into an unexpected quagmire.
Stanton met with ROOT Sports staff Tuesday to discuss the station’s future, four industry sources told the Times.
Stanton promised a decision on the organization’s next steps by mid-January, but could not promise all staff members they would keep their jobs, sources said.
The uncertainty surrounding ROOT Sports follows Comcast Xfinity announcement On October 10, it nearly doubled the price of a subscription to the regional sports network, or RSN. This is expected to significantly reduce viewership of Mariners games next season, and the team will not receive an increased cut from Comcast’s rate hike.
Since Comcast’s announcement, the Mariners have lost some $44 million in player salary commitments. In particular, they traded popular third baseman Eugenio Suarez to the Arizona Diamondbacks then included Former top prospect Jarred Kelenic in trade with Atlanta Braves to get rid of the contracts owed to Marco Gonzales and Evan White.
The Mariners’ payroll was about $140 million last year, which ranked 18th among 30 MLB teams according to USA Today, and was expected to gradually increase in 2024.
Stanton and the Mariners ownership group are considering two options with ROOT Sports NW, industry sources have pointed out.
1. The Mariners could absorb the operational costs of producing live games and maintain the status quo in 2024. The exact cost of producing games is unclear, but it would be a significant new investment. In the short term, that appears to be the Mariners’ most likely move, a source said.
2. The Mariners could partner with Major League Baseball, which is “aggressively pursuing” teams to join its new broadcast division. MLB took over local broadcasts of the Diamondbacks and San Diego Padres midway through the 2023 season when those teams’ RSNs deteriorated.
MLB said it had the capacity broadcast local matches for 17 teams. It’s unclear when and how MLB’s centralized model will become profitable, and the Mariners may take a wait-and-see approach with MLB.
Each option has advantages and disadvantages, just as there are advantages and disadvantages to seafarers owning their RSN.
“They are in control of their own destiny right now, and that’s a good thing,” a source said. “The downside is…you also take on the risk. »
ROOT Sports also owns local media rights to the NHL’s Seattle Kraken and the NBA’s Portland Trail Blazers, adding two layers of uncertainty to the RSN’s future.
The Kraken have a multi-year contract with ROOT Sports with annual television rights that would be in the standard $15 million to $30 million range for NHL teams. Warner Bros. Discovery, as it did with Mariners games, led operations to produce live Kraken games (including pre-game and post-game shows).
The Blazers signed a four-year broadcast rights deal with ROOT for an undisclosed amount in June 2021, which is expected to extend through the 2024-25 season. The Blazers have their own internal operations for broadcasting games.
The Mariners are hardly alone preparing for an uncertain future with their broadcast media rights. The viability of the RSN model has collapsed in recent years as cable TV subscriptions plummeted.
For many years, TV rights packages have been a major source of subsidizing growing player salaries in various professional sports. This landscape is collapsing, leaving teams and leagues searching for new revenue options.
With Diamond Sports Group, owner of Bally Sports Networks, filing for bankruptcy in March, television rights deals signed by 14 MLB teams were at risk of not receiving the agreed payment. The Diamondbacks and Padres were the first two franchises to lose their contracts, with MLB taking over their broadcasts. The Minnesota Twins’ deal with DSG expired after the season and they are without a network. The Cleveland Guardians and World Series champion Texas Rangers could lose their television contracts in the coming months due to new bankruptcy court rulings.
Although the league has promised to recoup up to 80% of the money teams were supposed to receive from Diamond Sports, the loss of revenue is still forcing teams to cut payroll.
As a result, the Padres plan to reduce their bloated payroll by $40 million to $50 million, which is why they traded star Juan Soto to the New York Yankees last week.
The Rangers have said they will not add significant contracts to their large payroll, and the Guardians are attempting to trade All-Star Emmanuel Clase and starting pitcher Shane Bieber to reduce their payroll.
The Twins are trying to cut a $154 million payroll by $20 million to $25 million this offseason.
“It definitely has an impact,” Twins general manager Derek Falvey said during the recent winter meetings. “We’re in a position where our deal expired last year, and so ultimately there’s some uncertainty going forward. It’s just a fact. This is a reality of our company. We have been pushing on the payroll front in recent years. We have set team records over the last two cycles. We knew there would be ebbs and flows, and that is ultimately affected by revenue uncertainty.
