The Royals are enjoying some of the greatest revenues ever due to record attendance this season and national television deals that gives all 30 teams more money than they know what to do with. However the one revenue stream that seems to keep them behind most of their opponents is their local television deal.
In 2008, the Royals signed an eleven-year deal with Fox Sports Networks to create "Fox Sports Kansas City", the exclusive cable home of Royals baseball. That deal came after the ill-fated "Royals Sports Television Network", a channel produced by the Royals organization that was really just a sub-feed on Fox Sports Midwest, airing Royals games around St. Louis-based programming. The deal was signed while the team was coming off a 93-loss season, their sixth season out of the last seven with 90+ losses. As such, the franchise had little leverage, and signed a deal that would pay them a reported $20 million per season through 2019.
Since then, baseball has seen an explosion in revenue from local television deals. In the past few years, the Rangers, Angels, Dodgers, Astros, Braves, and Cardinals have all signed massive deals, in some cases exceeding a billion dollars. Sports has become a prized commodity for cable carriers, as it is one of the few programming events left that viewers will not record and fast-forward past commercials. Cable carriers can charge higher advertising rates, and use sports events as a platform to promote other programming.
The Royals are locked into their current television deal for four more seasons, but it is not unheard of for teams to negotiate new deals before the current contract expires. The Cardinals, also mired in a low-paying deal, recently negotiated a signed a billion dollar deal that will begin in 2018. The Atlanta Braves were also caught in an awful long-term deal, and were able to renegotiate the deal to add an additional $500 million in revenues.
Let's see just how far behind the Royals are in local television revenue. Below is a chart listing each teams' local cable channel, whether or not the team has an equity stake in the channel, and how many homes the channel is broadcast into. The "DMA" refers to "Designated Market Area" by the Nielsen Corporation to give an idea of how many television viewers are in each metro area. Finally, the chart includes the estimated revenue each team will receive in 2016 based on media reports, and when the current television contract was signed.
|Team||Channel||Own stake?||Homes||DMA||2016 revenue||Deal signed|
|Yankees||YES||Yes, 20%||9,000,000||7,368,320||$103 million||2012|
|Mets||SNY||Yes, 65%||8,700,000||7,368,320||$52 million||2006|
|Dodgers||TWC Sportsnet LA||Yes||2,300,000||5,489,810||$200 million||2013|
|Angels||Fox Sports West||Yes, 25%||6,800,000||5,489,510||$150 million||2011|
|Cubs||CSN Chicago*||Yes, 25%||4,700,000||3,475,220||$60 million||2015|
|White Sox||CSN Chicago*||Yes, 40%||4,700,000||3,475,220||$45.5 million||?|
|Phillies||CSN Philadelphia||Yes, 25%||3,000,000||2,917,920||$100 million||2014|
|Rangers||Fox Sports Southwest||Yes, 10%||10,000,000||2,646,370||$80 million||2010|
|Giants||CSN Bay Area||Yes, 30%||3,800,000||2,484,690||$65 million||2008|
|Athletics||CSN California||No||3,800,000||2,484,690||$48 million||2009|
|Nationals||MASN||Yes, 14%||?||2,443,640||$29 million||2006|
|Red Sox||NESN||Yes, 80%||4,100,000||2,411,250||$60 million||?|
|Braves||Fox Sports South/Southeast||No||13,000,000||2,385,730||$50 million||2013|
|Astros||ROOT Sports Southwest||Yes, 45%||4,000,000||2,373,700||$80 million||2015|
|Diamondbacks||Fox Sports Arizona||Yes||2,500,000||1,848,850||$80 million||2015|
|Tigers||Fox Sports Detroit||No||3,200,000||1,828,230||$40 million||2008|
|Mariners||ROOT Sports Northwest||Yes, 71%||3,200,000||1,766,070||$103 million||2013|
|Twins||Fox Sports North||No||2,000,000||1,723,210||$29 million||2011|
|Marlins||Fox Sports Florida||No||6,500,000||1,660,020||$18 million||2006|
|Rockies||ROOT Sports Rocky Mountain||No||2,500,000||1,576,090||$20 million||2010|
|Indians||SportsTime Ohio||No||2,800,000||1,493,160||$40 million||2013|
|Cardinals||Fox Sports Midwest||No||4,000,000||1,217,370||$28 million||2008|
|Pirates||ROOT Sports Pittsburgh||No||2,400,000||1,154,550||$20 million||2010|
|Orioles||MASN||Yes, 86%||?||1,099,890||$29 million||2006|
|Padres||Fox Sports San Diego||Yes, 20%||2,400,000||1,055,030||$50 million||2012|
|Royals||Fox Sports Kansas City||No||1,600,000||899,020||$20 million||2008|
|Brewers||Fox Sports Wisconsin||No||1,700,000||882,210||$21 million||2009|
|Reds||Fox Sports Ohio||No||5,000,000||868,900||$30 million||2007|
*-the White Sox and Cubs both have deals with over-the-air channels as well
The Toronto Blue Jays were excluded since their market is a non-American market not counted by Nielsen, and they are owned by the station that owns their broadcast right - Rogers Communication - making it difficult to determine television revenues.
The Royals have been a ratings hit, getting the highest local television ratings by any baseball market in over a decade. However ratings are a percentage of the overall market, and the Kansas City market is tiny by baseball standards. Prime time ratings for the Royals this summer drew a rating of 13.0, roughly 113,000 television viewers in the Kansas City metro area. If the Yankees drew that many viewers, it would be about a 1.5 rating, about what the lowest-rated prime time network shows will receive. Yes, the Royals draw from a geographically large area in the Midwest, but Fox Sports Kansas City is only broadcast in 1.6 million homes, the fewest by any channel in baseball.
Many of the smaller market clubs have not gotten a chance to work out new deals during the recent boom. If the Royals were able to renegotiate a new television contract, the best comps for the Royals would probably be the deals signed in Cleveland and San Diego. Both clubs play in markets a bit larger, but in the same ballpark as Kansas City, and signed with Fox Networks affiliates (SportsTime Ohio is owned by Fox Sports Networks). The Padres even got an equity stake in their deal, which adds even more revenue, and can help clubs hide operational debts. The Royals could probably expect a deal that would come close to doubling their current annual revenue amount to about $30-40 million per year.
Of course, this assumes the Royals would be able to land a new TV deal before the sports local TV bubble bursts. Would an additional $20 million make the difference between signing top tier free agents? Almost certainly not. But every bit helps, and additional revenues can help keep the team maintain competitive payrolls. The Royals will likely always be near the bottom in television revenue due to the market size of Kansas City, but re-working a new deal is essential in keeping up with the rest of the league.