DENVER (KDVR) — Even with a value of $1.37 billion, a $40-$50 million rights fee hit will take a toll on the Colorado Rockies.
The Rockies are part of AT&T SportsNet, and as of early this year, the broadcaster announced its intention to get out of the regional sports network business.
“It’s a big chunk of their revenue,” said Kurt Badenhausen, Sportico’s sports valuations reporter. “It just disappeared.”
According to Sportico, the Rockies’ valuation for 2023 has dropped by 4%, or about $55 million. Now, it’s a value that will be eventually recuperated, but replacing the revenue stream will take time.
“They’re not going to be able to replace it in the short term,” Badenhausen said. “These clubs are going to take a haircut because what has happened in the current RSN (regional sports network) model. You have a lot of people who don’t watch Rockies games who are paying the cable operators to support these large media rights deals. Once we take this programming off the air, the Rockies will no longer be collecting money from those non-baseball fans.”
‘I think this is a home run for baseball’
A lot will depend on how quickly Major League Baseball can facilitate the distribution of their games to various platforms — be it on cable, over-the-air broadcast or online.
“Eventually, you’re gonna be able to watch games from wherever you want on multiple different platforms,” Badenhausen said. “And long term, I think this is a home run for baseball, but now you have to work through these legacy contracts.”
MLB doesn’t have a revenue-sharing process like the National Football League, so the disparity between the haves and have-nots in baseball is very lopsided. But all of this, while inconvenient for the Rockies and MLB, may help grow the game values for the individual franchises.
“MLB insists that they will take over programming and distribution to get it out to fans as this sorts itself out,” Badenhausen said. “More fans will have better access to watch the games, and baseball thinks this will be beneficial in due time.”
AT&T will continue to broadcast Rockies games this season. Afterward, it’s a call at the plate.