Sources: Royals nearing new TV deal with FSKC
CLEVELAND -- The Royals and FOX Sports Kansas City continue to negotiate toward a new TV contract, and sources indicate a deal could reach fruition by the regular season’s end.
An offer from FSKC was presented in May, according to sources. A new deal, likely in the 10- to 15-year range, is expected to bring the Royals somewhere near the $48-52 million range per year in rights fees.
The Royals’ present 11-year deal with FSKC, which expires after this season, was backloaded and will bring the Royals about $25 million this season, though its average annually was closer to $20 million.
That TV deal with FSKC was signed in 2008 and, though now often regarded as financially inadequate, was welcomed at the time. It replaced the ill-fated in-house Royals Sports Television Network, which struggled mightily trying to distribute games to area cable and satellite companies, often leaving tens of thousands of fans without coverage.
Negotiations for a new deal between the Royals and FSKC have been slowed this year by outside factors, namely Sinclair’s pending deal to purchase all the Regional Sports Networks (including FSKC) from Disney, which is acquiring numerous 21st Century Fox assets. That deal was reportedly finally completed late Friday. The Department of Justice had mandated that Disney, which also owns ESPN, sell off the RSNs to avoid a sports monopoly.
Fox also is in the midst of negotiations with Dish Network over an expiring carriage deal, which has slowed Royals-FSKC negotiations as well.
A new TV deal won’t necessarily be a financial game-changer for the small-market Royals, who would still have one of the lowest TV revenue deals in baseball. But the new deal would be on par with Kansas City’s market size.
While the Royals enjoyed a ratings boost during their back-to-back World Series years in 2014-15 -- their 12.3 average rating in 2015 was the highest in MLB in 13 years – and viewership remains strong even in the recent downswing, ratings themselves are mostly irrelevant when negotiating TV contracts. Market size, available TV homes, and television footprints are the No. 1 factors.
According to Nielsen, here are MLB’s bottom three in terms of television households/DMA (designated market area):
28. Kansas City 909,420
29. Cincinnati 850,030
30. Milwaukee 848,420
Cincinnati’s TV deal with FOX Sports Ohio had been paying the Reds about $30 million a season in rights fees before a 2016 extension for 15 years bumped that annual figure to somewhere in the $55-60 million range, it is believed.
But while Cincinnati’s DMA is a tick below Kansas City’s -- and DMA is the most significant negotiating element -- the Reds’ TV footprint in the region is substantial, covering Dayton (463,430 TV homes), Columbus (889,600 and shared with the Indians) and Lexington, Ky. (464,340).
Kansas City’s TV footprint includes Omaha, Neb. (405,260), Topeka, Kan. (151,860) and the Wichita/Hutchinson surrounding area (382,780).
Milwaukee, the smallest TV market but just over 60,000 DMA households fewer than Kansas City, is somewhat cornered in its TV footprint, blocked by the Cubs and White Sox to the south, and Lake Michigan to the east. The Brewers’ TV footprint includes Madison (338,240) to the west and Green Bay/Fox Valley (421,480) to the north.
Comparatively, the Royals’ TV footprint likely more resembles the Brewers’, whose TV deal also is set to expire with FOX Sports Wisconsin after this season. The Brewers’ TV deal with FOX Sports Wisconsin paid them $12 million in rights fees in 2012, and that figure bumped to about $21 million after an extension in 2013.