We Go’n’ Be on TV?!: Why There Will Be a Fight

By:
Published: February 7, 2012

The Hornets broadcast rights are up for grabs, and two familiar faces should be competing for them.

On October 30th, 2002, Cox Sports Television (CST), broadcast the very first New Orleans Hornets regular season game. The Hornets, New Orleans’ new NBA team, defeated the Utah Jazz, New Orleans’ old NBA team, 100-75 thanks in large part to a 32-11 fourth quarter.

On April 26th, 2012, CST will broadcast a game between the Hornets and the Houston Rockets, and that could be the last. No, neither the last Hornets game nor the last Rockets game. It could be the end of CST’s right to broadcast Hornets games.

It is also cruelly fitting.

Perhaps.

Cox created CST in October 2002 so it could enter the regional sports network business. Here is what Cox said about the move:

Cox VP/Public & Government Affairs Steve Sawyer said that the cable operator “wanted to beat other regional networks — like Fox Sports — to the punch” in acquiring broadcast rights to the Hornets. Sawyer: “We could either pay someone else to carry the service that was going to be in our back yard, or we could get out of the box in carrying it.” The HOLLYWOOD REPORTER’s Andrew Grossman wrote that launching its own RSN “carries several advantages for Cox.” Under federal law, Cox “does not have to sell the programming to satellite companies because Cox will distribute the service terrestrially rather than via satellite.” Cox “also can control its costs because it does not have to worry about paying license fees to a third-party programmer like Fox.” Sawyer declined to disclose the rights fee CST is paying the Hornets, but sources said that Fox “balked because it considered the price for the Hornets too hefty.” Sawyer said CST will reach over 500,000 HHs upon launch.”

— Hollywood Reporter, via Sports Business Daily

So there it is.

There what is?

It.

What is it?

It’s it.

What is it?

1) Fox was in the conversation for the first TV contract but was outbid by Cox (Fox “balked because it considered the price for the Hornets too hefty.”)

2) Cox is trying to grow into adjacent industries with CST (the cable operator “wanted to beat other regional networks — like Fox Sports — to the punch” in acquiring broadcast rights to the Hornets.)

3) CST exists essentially because of the Hornets (We could either pay someone else to carry the service that was going to be in our back yard, or we could get out of the box in carrying it.)

4) The current business model is critical to Cox’s profitability in this venture (Cox “also can control its costs because it does not have to worry about paying license fees to a third-party programmer like Fox.”)

5) Cox is using CST in its battle vs. satellite carriers (Under federal law, Cox “does not have to sell the programming to satellite companies because Cox will distribute the service terrestrially rather than via satellite.”)

The above tells me that one article on this just won’t cut the multi-million dollar mustard, so we’re going to bring you a series covering this very important piece of the Hornets puzzle both for the franchise and the fans.

For the team, having already improved its bottom line due to efforts and success on many fronts, perhaps most importantly in the business community, they can return better returns on their investments in the team by getting the team shown in more households potentially. More basically, this deal will be worth millions more per year directly to the team, if not more than ten million.

For the fans, it could help them a little by helping the team and a lot by getting the team’s games in wider distribution. This can include more carriers, more markets, more games per season, and more auxiliary programming.

The above is just a summary of what’s at stake, but the title implies a fight. Between whom? CST and . . .

Remember the cruelly fitting comment above?

Here’s why it is cruelly fitting . . .

At the conclusion of the 2011-2012 season, the Hoston Rockets are ending their relationship with Fox Sports Houston in favor of a new regional sports network, Comcast SportsNet Houston, of which they and the Houston Astros will own around 80%.

This leaves a regional sports network that is available on Cox, Charter, DISH Network, and DirecTV in Louisiana at lower levels of service without one of its anchor teams, the Houston Rockets, at the exact same time that the Louisiana team in that sports League, the NBA’s New Orleans Hornets, is re-examining their broadcast rights deal for the first time since the original deal was signed.

On the surface, this seems like a simple solution to a number of problems for the Hornets and Fox Sports. Fox Sports can use at least some of its infrastructure for covering the Rockets to cover the Hornets while expanding it’s reach more firmly and naturally into Louisiana and beyond. For the Hornets, the immediately increase their coverage while partnering with a national brand.

Additionally, Fox, or its parent corporation, News Corporation, has other connections to the team.

First, the Hornets are broadcast locally on 106.1 FM, which recently converted formats, from Oldies to Fox Sports Radio. Fox Sports Radio is only loosely affiliated with Fox Sports, but there is a degree of cooperation.

Second, the owner of the local Fox affiliate, Tom Benson, is also reportedly interesting in buying the Hornets. He already owns the New Orleans Saints and is heavily invested in Champions Square, the budding sports and entertainment district being developed by the Superdome and the Arena. Again, the national Fox network and the regional sports networks are only loosely affiliated.

With the ownership situation expected to be resolved prior to the TV deal being settled, a Benson victory could help the bargaining posture of the Hornets at the table with the networks if they fear losing, or desire gaining, depending, the Saints regional sports network coverage. Conversely, these possibilities could affect Benson’s bid.

But we aren’t there yet.

In the coming weeks, we’ll bring you analysis of events as they unfold, plus articles on the combatants, how carriers make money from networks, how networks make money from advertisers, how teams make money in that morass, and more. In other words, we are going to cover what is going to go into the Hornets’ decision.

It’s a complicated issue . . . stick with us . . . Film at 11 . . .

Carry on.

We Go’n’ Be on TV?! is Hornets247 series dedicated to discussing the Hornets broadcast rights contract. The series to date can be see here.

8 comments
da ThRONe
da ThRONe

As a die hard fan of New Orleans sports and a loyal Directv customer those two just don't match. It's actually better now that I live in L.A. games aren't blackout as much. Still our tv deal is awful for the region. Hopefully we sign a tv deal with FOX sports.

sergio
sergio

dafuc!!! You us citizens have a great problem with so many tv´s.... here in Portugal, we have only 1 channel that show all sports. lol. Let´s go hornets, the last place can be ours, so as the first pick!!!

NolaHog
NolaHog

This would be HUGE. Even if Fox Sports offers less money than our current deal, the Hornets should take it, because at this point universal exposure is more valuable to us than the upfront money. We need to be thinking big picture here. The only Cox deal that should be considered would be a nice payoff PLUS guarantees that the games would also be broadcast over the internet for Cox internet customers.

J
J

Perfect timing with new ownership on the horizon and a new cable deal with Fox SW or South now everyone can be able to watch the Hornets next season get it don Geaux Hornets!!!!!

Jason Calmes
Jason Calmes

These guys, along with V, Sean, etc. work for the team. They may also have deals with the radio, CST, etc., but they work the games for the team. They would be assumed to move if the deal changed, unless they or the team decided to move along.

Jason Calmes
Jason Calmes

Nice thought. I'll research it. Call / Email / Tweet / whatever the team. Tell people to do the same. I wouldn't mind a movement springing up.

Trackbacks

  1. […] TV deal will be a key source of revenue for the new owner. The Hornets’ current TV deal expires after this season. It is worth around $10m per year, which is likely the worst in the NBA. TV deals have been […]

  2. […] here, but suffice it to say that this should mean nothing but good things for the Hornets; in fact, it is a move we speculated on back in February. The report states that Hornets games were accessible to only 37% of the New Orleans market, a […]

  3. […] Hornets fans are well-aware the not all broadcasters are created equally, so we have kept an eye on this for a long while. […]