Success argues against an easy deal with the Padres
Channel 4 San Diego’s Postgame crew(from left), Bob Scanlan, Jenny Cavnar and John Weisbarth, at the DiamondView Tower overlooking Petco Park.
As the San Diego Padres gear up for Major League Baseball’s post-season, executives at Cox Communications must have mixed feelings. They no doubt are stoked that the Padres have a legit shot to make it to this year’s World Series. But the Pads’ success on the diamond may make it that much more difficult to persuade the team’s ownership to renew its broadcast contract with Cox.
The Padres are in the penultimate season of a 10-year deal — inked by the team’s previous ownership — that earns them a reported $16 million a season. Cox has had an offer on the table since at least the start of the year that, sources say, would proffer the Padres about the same broadcast rights fees as the current deal. But the Padres are holding out for a better one.
“There’s a great opportunity for us in 2012,” says Laura Broderick, the team’s senior vice president. They want both wider distribution for Padres telecasts, which currently reaches about 80 percent of households in greater San Diego, and considerably higher rights fees than Cox has offered so far.
Cox announced in June that it was willing to license Padres games to AT&T, DirecTV and Dish Network, after previously refusing to allow its competitors to offer Padres games to their subscribers. This concession addressed the team’s interest in reaching more households and, more importantly, concurred with an FCC ruling that struck down a provision of federal cable law that had previously enabled Cox to monopolize Padres broadcasts. “We saw the writing on the wall,” acknowledges Craig Nichols, Channel 4 San Diego’s general manager.
The issue of fees might prove more difficult to overcome. A source close to negotiations says Padres owner Jeff Moorad is looking for a deal from Cox comparable to the 10-year, $500 million deal Fox Sports Net made with Artie Moreno, owner of the Los Angeles Angels, up the road in Anaheim.
While he doesn’t come right out and say it, Nichols leaves little doubt Cox won’t agree to anything close to $500 million a year for Padres broadcast rights. “San Diego is a different market,” he says. “It’s not Los Angeles.”
For one thing, he says, San Diego is only the nation’s 28th largest television market. And San Diego has certain geographical restrictions — the Pacific Ocean to the west, the mountains to the east, the Mexico border to the south, the Angels and Dodgers and their territorial rights to the north. Those restrictions prevent Cox from enlarging its viewing audience, says Nichols, thereby limiting the revenue stream it can generate from Padres broadcasts.
If negotiations fail between Padres ownership and Cox over fees, the baseball club can seek offers from other prospective suitors, like the Fox Sports Network, which already boasts high-dollar deals with several other MLB teams and would welcome an opportunity to secure broadcast rights in San Diego. “We would consider all options,” says Broderick.
For Cox, the failure to renew its Padres contract would be a game-changer for San Diego’s largest cable provider. The company has invested more than $100 million in Channel 4 San Diego since it launched the station in 1997 to broadcast Padres games, with an emphasis on local personalities and community relationships. Tony Gwynn calls a few dozen games each season, and commentator Mark Grant’s knucklehead antics and anecdotes about his days as a major-league pitcher add color and comic relief to Dick Enberg’s play-by-play in the announcer booth. Cox also produces shows like One on One with Jane Mitchell, profiling the Padres’ lives and charitable endeavors off the field.
If the Padres ultimately decide not to play ball with Cox, much of Channel 4’s raison d’etre would go away. While the station offers some non-baseball programming — including the popular Sam the Cooking Guy, community affairs specials and a newsmagazine show — it is largely viewed as filler for when the Padres are not on the air.
Several months before the start of the current baseball season, Padres owner Moorad told the North County Times that “a new [television] deal is critical” for his club. Now at the close of that season — a dream run for the Pads that no one could have predicted — the clock ticks on.