TV Contracts At Heart of the Matter in Rangers, Stars Sales

On one side of the camera you have the athletes. On the other side, the broadcasters and journalists. The media is there to report the facts. To tell the story, not be the story. The longer the sales of the Texas Rangers and Dallas Stars drag on, however, the more that line is blurred and the media (tv) is becoming the story.

That line is in danger of being completely obliterated in the coming weeks if News Corp. succeeds in purchasing either the Texas Rangers or Dallas Stars, and perhaps both. Various reports of the media entity's intentions reference wanting to "control the product" [on FSN]; Ominous words from an ominously large media corporation. A quick check of their Wikipedia page will show you that they own half of the western hemisphere and it's doubtful that there are many entities on the planet that have more money other than Disney, a few Saudi Arabian Princes, and, I don't know...maybe China.

The Wall Street Journal reported last night that Fox is currently trying to extend the Rangers tv deal that expires in 2014 along with the Stars deal. According to this report, News Corp's pending bids are contingent upon not getting extensions for their network, which is to say that "If you don't extend your current deal with us, we're just going to buy you and then extend it ourselves."

The biggest threat to Fox would appear to be Mark Cuban (above), who also owns the NBA's Dallas Mavericks and would theoretically have the easiest time starting a regional network if he bids successfully for the Rangers. But Mr. Cuban said in an email Sunday that he doubts he would start his own regional network if he won the bid for the team.

If Fox's negotiations for a new broadcast deal go sour, the people involved said News Corp. has a plan of last resort—bidding for the team, which is expected to sell for more than $500 million. David Hill, chairman of Fox Sports, declined to comment. [WSJ]

What no one is talking about in any of this mess is the fact that the Stars and Rangers have been linked in any future television contracts, according to the terms of the initial sales agreement of the Rangers to the Chuck Greenberg group.

This is from the Sports Business Journal on June 28th, 2010:

The future buyers of the Dallas Stars and Texas Rangers are obligated to pursue a joint media venture after the expiration of their current TV deals, according to terms of the Texas Rangers sale agreement that was made public recently as part of the club’s bankruptcy proceedings.

That came out during the draft weekend, and I was saving it for what I thought would be an interesting, though inconsequential discussion in the dog days of the off-season, but now it's at the heart of proceedings that will affect Stars and Ranger fans for years and years to come.

It's unclear whether or not this agreement will be included when the terms of the Rangers sale are re-released pending this weeks auction...

The deal was a drag-along tactic that favored the Stars heavily, and it's not clear what "join media venture" means. Does it mean starting a new network? Renewing the FSN contract together? We're not sure at this point.

Dallas Stars television ratings, while up last season, were still low enough that when the club tried to secure a broadcast home for a Sunday afternoon game against the Avalanche last March, they were (someone told me in the press box) told "no thank you" by local broadcasters. Their television deal is not congruent with other markets of similar hockey interest. We take it for granted. Ever look at the Carolina Hurricane tv schedule? Imagine the Stars going on a road trip and not having any way to see the game.

That News Corp would enter the bidding to retain the Stars is a bit of a compliment, but it doesn't make it any easier to swallow. That provision in the Rangers sale was a mere afterthought two months ago, but now the television contracts are front and center and that clause is likely to be revisited, possibly deleted, leaving the Stars to fend for themselves in the tv market.

So the situation is like this: If Mark Cuban doesn't get the Rangers, he might go create a Dallas-based tv network and steal them from Fox Sports Southwest. The Stars, depending on the terms of the Rangers sale, might be obligated (or lucky) to come with them to Cubes' new network. If Cuban did get the team, he says he wouldn't be as inclined to start this media venture. As a Rangers fan, I don't want to see Cuban get the team. As a Stars fan, I do, because it would mean News Corp wouldn't have the same motivation to bid on the Stars. This must be the spot between the rock and the hard place I've heard so much about.

What if News Corp did buy the Stars?

They would likely hand management of the club to Fox Sports Enterprises, which is a smaller part of FCN (Fox Cable Networks) which is a part of News Corp. Are you confused yet? Here's some information from the News Corp web site:

Fox Cable Networks (FCN) includes 36 domestic programming services in which News Corporation holds interests. Together, these networks reach more than 550 million subscribing television homes and represent one of the media industry’s largest and most diverse programming groups. Fox Cable Networks span FX, FX HD, National Geographic Channel, National Geographic Channel HD, Fox Reality Channel, Fox Movie Channel, Fuel TV, FSN and 19 regional cable sports networks, SPEED, SPEED HD, Fox Soccer Channel, Fox College Sports, Fox Sports en Espanol and the Big Ten Network and Big Ten Network HD (co-venture with the Big Ten Conference). FCN also includes Fox Sports Enterprises, which manages interests in sports franchises and leading statistical information provider STATS, LLC.

Their existing sports franchise interests include a 15% share of the Colorado Rockies, if you believe everything you read on the internet. I know I always do.

If all of this is starting to make you feel like the Stars would be owned by a faceless, heartless business machine, I think your point of view very closely matches ours at DBD. The irony of course is that we want an owner with deep pockets. Who has deeper pockets than News Corp.?

Tom Hicks said in February that he believes hockey in the south is a losing proposition, monetarily speaking. If there's someone (some thing?) that can figure out how to walk the fine line of making money off the Stars, you'd think a big money making machine like News Corp would be it. But don't kid yourself. Such a line would be froth with "business decisions" and a distinct lack of "opening the flood gates" or "spending to the cap." Deep pockets wouldn't mean much at all.

Brandon said it best on Saturday. What the Stars need is a passionate individual. A face. More importantly (in the short term), they need someone who can afford (and is willing) to lose a few bucks on the Stars for a couple of years and cover it with other business ventures while he builds a winner. News Corp, or Fox Cable Networks or Fox Sports Enterprises or whoever, is unlikely to take that approach.

So how much does Bill Gallacher want the Stars? His pockets aren't too shabby themselves. It's probably too late to start a letter writing campaign, but I will offer to cook Mr. Gallacher dinner once a week if he buys the team, and I'm currently organizing a group of local celebrities to record a song inviting him to Dallas. That worked for those folks in Cleveland with Lebron James, right? Hello?

News Corp would mean mediocrity, in my opinion. News Corp would mean more Hicks-like decisions. News Corp would mean more "internal caps" and budgetary concerns. News Corp would seemingly mean faceless, corporate detachment. It would mean "catching lightning in a bottle" one season as the best road to a cup.

It might even mean Stars fans reminiscing about the good old Tom Hicks days.

So say a sports prayer to the hockey gods and the baseball gods this week, people. It's a big week, and a big couple of months we have coming up. Until we know for sure, I find myself wondering just how the hell television, instead of telling the story, became such a large part of why we won't be able to get some damned defense in here.

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