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February 12, 2007

The Ledger Domain

A Deeper Look at the Exclusive Extra Innings to DirecTV Deal

by Maury Brown

Back in 2003, when I really started rolling up my sleeves and working directly in the business of baseball, I was fortunate enough to be working with David Kahn, the former General Manager of the Indiana Pacers, and now the owner of four NBA D-League teams in the southwest. Kahn was the head of the Oregon Stadium Campaign during the Expos relocation derby, and I was working on research for the material that would eventually be the final submission making Portland’s case to MLB. In the midst of that roller-coaster process, David was always keen to mention in the press—and to those of us working on the effort—the need to be level-headed. “Remain dispassionate, if you can at all help it,” Kahn would say. “This is business, and therefore, you have to try to remove your emotions so that it doesn’t get in the way of making proper decisions.” He was right, of course, but that didn’t mean that emotions didn’t enter the picture. In the span of two days, we saw state funding legislation die in the Legislature, prompting depression, only to see the bill resurrected the following day and passed, causing jubilation.

I bring all of this up now because for the better part of a month I have been immersed in research and correspondence with those who will be impacted by MLB’s decision to make Extra Innings available only on DirecTV, and also discussing MLB's move with those that work in sports business or cover it from an analysis perspective. With the exception of three emails received, the fans that contacted me are flaming mad with the deal, and wish to still get out-of-market games through the existing carriers like cable and Echo Star’s Dish Network, which will be dropped in America when the new deal is announced. (I will get to Canada shortly.)

Core Fans Most Upset

Understandably, the ones that would have the most interest in a package such as MLB Extra Innings are baseball’s core constituency—their most loyal and dedicated fans. As noted in more than one correspondence, these were the fans that stuck with MLB when the ’94 strike hit. With that in mind, how easy would it be for MLB to simply say, “This will blow over. The game has seen storms bigger than this, and will weather it.” Many simply believe that MLB sees this as a money grab, given DirectTV’s willingness to offer up $100 million over seven years when compared to a reported $70 million a year by the cable industry. As I will get to shortly, this is an oversimplification.

As for the fans, since space doesn’t allow for all the emails that I have received to be displayed, below represent two examples from my in-box on the upcoming deal.

Keith Kudrycki of Washington, D.C. writes of the proposed deal: