Adam Klein has the latest with the business of sports on CTL
Sports has grown at the the big business the one of the guys who has made some of the biggest deals in the game joins us now. He's a local turning it cat mutual -- -- thank you for covenant considered part let's talk about some of the money that is impacting sports because TV deals are setting records -- Major League Baseball has doubled the amount of revenue in the recent deals that they just did how does that impact the game do you see that trend continuing. But I think I did the trend will continue Dave. Right now the value of a lot of the sports teams is in and of itself driven by the value of their media rights. And whereas back in the day -- we thought of media rights we were thinking of oh well we watched the game on television. You pull up your local broadcast Libyan national broadcast on TV. Nowadays with technology improving and developing you know every. Every day -- if you will. There are so many other opportunities -- ways to view and to access. Sports programming that those rights whether they're held by the team. Whether -- held by the applicable Li can become more and more valuable. And the truth of the matter is and I think the deals that have been done indicate this. That sports is still that true reality TV that people want to see life yes you can DVR it. Watch the game when you get home if you happen to not be around sure you can also get your tablet or your laptop and watched the game live or otherwise delayed basis. Condensed versions full package but the truth of the matter is people want to see the game live it's hard not to know what's going on because we have access to so many ways to hear about. The score or any particular play and that's whether you happen to be in front of a screen -- are so many screens now around as I just said laptops tablets Smartphones. Or because you the radios on the Internet -- a friend's gonna say something a spouse inadvertently. We're purposely and so people wanna see it happen you wanna be there when it happens and again I also think while the pipe may change -- in the way in which the program and comes and -- I still think people wanna sit in front of their -- TV the comfort of their home they're not at the game. Clearer picture now especially with -- HD and -- digital the ability to stop pause to get a drink come back pause rewind see the play again. It's it's just the way people tend to want to watch sports I think ten years from now will be talking about the same thing in the -- may be different in the way comes into the house. Wireless. Y five. Different technologies. But they're still gonna wanna watch on the most extreme. Get to that extent -- -- you know Roger Goodell cousins talked a lot about. Trying to improve the in stadium experience for fans because of what you said that it is so. Are comparable for fans to sit at home and have an extreme. Television. It is that how important is that financially for. The a league like the NFL to to be able to enhance -- in stadium experience certain herbs are they okay. Basically with the with the TV rights and who can -- -- to have. Well I think there there a couple of related items -- number one. What I would say is that they go a bit hand in here on the TV stations that are pet there's there's TV networks that are paying the big money. They don't -- panned the crowd and see empty seats and that's good for their ratings because it just it gives off the impression that the game is not. Either that popular or that there's an issue that fans don't wanna be there it doesn't look good and for example Major League soccer as it has become more popular and it was able to get national TV rights deals will be ESPN. Fox soccer and other stations. That issue they would hear when they were in games are being shown this week we will give you that time slot on Thursday. And now you've got the audience you gotta fill the stadiums I can't be -- the stadium and not show people in the seats because people then start to wonder psychologically or otherwise. You know what why are there people there watching the game what's wrong what's wrong with this team the skate. So you have that factor plus so it's a bottom line is there a way that the main ways that a team makes money. Are the value of its TV rights is a big one but also it's by getting people. In the seats and that tries a definition ticket revenue to also big factor the gate. It drives. Per caps on concessions those people park they eat they drink beer. And then in addition having them at the stadium as -- drive sponsorships it's all about. -- -- pockets of people who attend games definition they have the eyeballs. They have the pockets usually and that's what drives. The experience of sponsors want to be associated with a team so a lot of this goes in somewhat of a circle and is related Aaron do you see a day where every. Professional team maybe has their own channel I mean we getting to that point we saw that with the Yankees now with. Conferences and it's really changed college sports all the -- Christine just. Trying to find someone to link up with so they can have that TV -- that it is there going to be a point where every protein has owned channel play it depends -- not on the one hand. The teams sit there and they say. Well there's value in the programming and then I'm contributing. And -- in large part I'm getting a rights -- and usually a healthy one. And I'm seeing and realizing upon the value on the other hand if I can get involved with Comcast sports net Chicago. Or other regional sports networks and have an ownership stake have an ownership stake. Isn't there value maybe I'm going to be on the table because as an equity owner then I can realize value from. Subscriber fees that the network gets the advertising. I also have a little more and -- control over the broadcast remember. The dollars are important don't get me wrong for the teams but let's not also downplayed the fact that broadcasting the games go get your point but also with some of the people rather would sit home movie than go to the game the game itself for various reasons. That's how the young people get associated with the game at the beginning that's how -- brand gets out there so having more control over that has some importance as well. But you know in the end that the the really the question becomes if you're gonna do your own network. Especially if you don't wake up maybe with a Comcast and also controls. The distributor side right not just the content side but also they are the main cable carrier here in Chicago. You need to be prepared to deal with them as a distributor and whether or not though going to be willing to pay the price that justifies. Economically. You having that are sending getting on the station you see it out in San Diego as an example. San Diego the Padres -- their regional sports network. I'm with fox. They had an opportunity to maybe do a deal with Time Warner Cable which is. Gone out and to the West Coast and on the number of deals they recently launched October 1 Time Warner Cable sports net and another Spanish station with the Lakers. And the Galaxy. But the Padres may have downplayed the fact where they took it into account and took the risk. That they have to -- carriage on Time Warner Cable is the distributor. I'm as we sit here today that's station has not carried by Time Warner Cable. I don't know the exact numbers but I suspect that 50% of the people in that area cannot get the games because their Time Warner Cable. Distributor so he's. It -- again I bring up a circle all these things are related you just have to like any business you're taking into account. Parts of Tom rickets pays 845 million closes the deal October 32009. Here we sit almost three years to the day if you put the Cubs on the market today. How much could sell for. Here's what I take it and I'm not sure the exact number -- -- that people smarter than I in supply and demand and I also remember we're talking about sports which there there's an emotional. Aspect of this that is very different than just buying a widget manufacturer. And you can never downplayed that since -- people talk up tossed around more pejorative terms like ego vanity purchases I'm not sure that's the way to look at it. But I do think there's this emotional connection also when you're in an auction like in any business. You're subject to your competitors doing so you're always you know and if there if they're someone else is very entrusted. You may be subject -- smartest or here comes competitor who's betting on this I'm not that's tomorrow and are you saying how underlying because they know you're probably Smart and everyone up here. Thank you maybe don't pay for the to know what what I was to where I was going with a tennis he he would get more. Today if you sold -- not to I'll tell you right. Number one don't downplay the emotional part of it there's other people would come along. They see what he paid the wanna get it he's only he's not gonna accept less than he paid break that they would have they would pay more how much more I don't know but take into account several things. Number number one although it's benefit from rising tide the dodger deal. The Padre deal the Texas ranger deal all deals that were done since then all at levels that in the Dodgers case above. But he paid for -- levels that. In relation in relative to the size of the market would indicate what he's got -- worth more for its number one number two. You're buying into the league the league itself is done quite well even in those couple of years. And you're buying into the growth strategy of that including president -- -- and -- Internet strategy the MLB TV network where you get -- 11. You're fractional piece of that is being a member of the league. Market size you. Big market teams don't come along very often -- part that's of a part of the reason the Dodgers would for what they went for her and even the Rangers. And this is a big market. There and you know you can't downplay that people will pay. An amount that's commiserate with the size of the market -- sponsors more fans. And then it's the TV deal on. TV rights are or will free up I believe for the Cubs over the next couple years whether he's in the WGN. Where he's at the Comcast sports net Chicago. And those are going to be worth a lot and just like the Dodgers are doing where they are capitalizing on the value of what that's going to be. I think the Cubs have a very valuable. So if Tom -- said to you OK I could start the Cubs network or I can come here with -- all the games I can leave it like I have. WGA and some games Comcast sports that -- he has an ownership stake in the station what would you stadium is the best way to go for a team of that says like the Yankees it. For whatever my opinions were -- I would say is I believe that together. The four teams the Bulls White Sox the Blackhawks and the Cubs are stronger than any individual team I think together. They get each of them a better deal than being a part that's my own opinion. In addition I don't know enough as to whether or not you can say the Cubs in the same breath as the Yankees and their network. That the Yankees have. And yes the Cubs have a certain aura with them. But the Yankees have such a mystique such an -- such a following that quite frankly that network has followed outside of the number region as well -- up there in a refugee yankees that that network has picked up and that's very good day I picked up programming for that I mean. You -- beloved yankees I'm from New York but. And mid February you really don't wanna watch another of sixty minutes on the Garrett competitively you wanna watch some kind of a live event and that's we've talked about how important those -- pencil and I agree with -- -- and I sometimes all I'll say the people well over regional sports network like the Cubs network for them. To me that's almost not a regionals -- -- were told to just what you need to you need a spring. -- -- winter or fall sport in my mind to keep that interest I mean how much of this ancillary programming to your point can you watch again the repeat of a classic game. You know shoulder programming that consists. You know a day in the life of pick your favorite player and so. I think you do need more than one team that that is just that's -- if there's an open. -- burgeoning sport that can -- -- the meat and potatoes interests of Americans. Football baseball and basketball is here and we look at a soccer matches at Soldier Field stadiums filled up. And -- we don't get a sense that there's that. Kind actresses and other sports I think soccer has spread the best chance. Again I think. Several years ago people were sitting around the table -- Major League soccer and they were saying are we gonna be here next year I don't think they have that discussion anymore including because. Their owners are of a certain caliber. That these are very wealthy. And respected individuals and they're not gonna let these teams in this league flounder so that plus getting traction getting national TV deals. I don't have the answers to why it hasn't. -- and like some of these other sports given especially. As the father of two young daughters the popularity -- A soccer in the suburbs. Especially. With the kids at some point the other sports take their interest and people have their theories about is there an American superstar and I think Obama team that they haven't been able to. Closest we've had -- win dominantly the last several years. People have also talked about the caliber of play here compared to Europe if people really interest you don't wanna watch that though I'm not sure that's fair especially as foreign players have migrated here as well we have a lot of development academy so. I think soccer you know can be I'm on the cusp of that and keep in mind you go out to Seattle the Seattle -- -- you go out to Portland Timbers. They're field and 50000 fans in the stadium and some of that stuff is regional right. Here there's a lot of sports inventory in this town and a lot of stadiums not so much out there she.
Local attorney Adam Klein has helped make some of the biggest deals on the business side of Chicago sports and talks about how they work with Jerry Reinsdorf, Tom Ricketts and more - 10/9