Fox Sports Ohio is close to acquiring SportsTime Ohio, the cable network airing Indians games, as reported by The Plain Dealer‘s Paul Hoynes, and the two sides are trying to get a deal done before the end of the year. Seeing as STO is owned by Cleveland Indians owners Larry Dolan and his family and also broadcasts Indians games, this should automatically be of interest to Indians fans. But when you start to look around the league as team after team begin to land big TV rights agreements (including a potentially massive sale of the LA Dodgers’ TV rights), the sale of STO gains even more intrigue.
Why? STO, which began airing Indians games in 2006, pays the Indians around $30 million per year for the rights to air Indians games, and though STO is also owned by Larry Dolan and his family, it is a separate business venture from the Cleveland Indians, with a separate staff, budget, books, etc. While both companies (obviously) work closely together, they’re separate entities. I’m pretty sure STO doesn’t operate at a loss, but the company’s revenue doesn’t really help the Indians organization financially, especially when you consider the Dolans are paying for both.
Hoynes, who states the two sides are trying to finish the deal before 2013 to avoid new tax ramifications, also reports that the sale of STO could be for anywhere between $200-250 million, and would increase the costs of the rights to air Indians games to an estimated $40 million. There is no way you can spin an extra $10 million as chump change, but according to Indians President and former GM Mark Shapiro, in today’s MLB, it’s worth only about a win in free agency. Don’t get the wrong idea—that win could absolutely mean the difference for a team that finished a game out of the playoffs. But the 2012 Indians weren’t that team, and $10 million isn’t enough to get crazy with the payroll. Honestly, this is probably just enough for the Dolans to recoup what they’ve put in to STO, as well as erase some of the losses they have suffered from investing in the Indians (Shapiro also refutes the oft-quoted Forbes “Business of Baseball” figure stating the Indians had a $30.1 million income in that same interview).
So don’t expect the team to go on a Dodgers-like spending spree. Although this could potentially lead to some flexibility in regards to player extensions or acquiring an already-signed player through trade, it’s not going to be enough to bring in a big-time free agent. However, since Dolan no longer has to operate both the Indians and STO, perhaps this will eventually help increase the baseball operations department’s finances. Hey, an extra $10 million a year sure can’t hurt.
Hoynes mentions in his article that STO employs Indians TV broadcasters Rick Manning, Matt Underwood, and Al Pawlowski (among many other individuals), and that it’s uncertain how Fox Sports Ohio’s acquisition of STO would affect them. It’s unknown to anyone outside of Fox Sports Ohio how the network would use or integrate STO into its current network. Hopefully an agreement can be made to allow most, if not all STO employees to remain employed, but that’s going to be up to Fox Sports Ohio in the end.
I truly feel for anyone whose job or career may be affected by the sale of SportsTime Ohio, but the sale of the network could end up being a boon to the Indians baseball organization. For a cash-concerned organization, trying to squeeze the maximum value they can from the TV rights deal is an absolute necessity to survive in modern baseball. And hopefully, the extra money gained can be turned into a meaningful win.