The Secrecy of the 2017 Toronto Blue Jays Media Contract

For the second consecutive year, the Toronto Blue Jays are leading the American League. Not in the standings, of course, the Toronto Blue Jays are 51-and-57 which is good for fifth in their division. The Toronto Blue Jays are leading the American League in a statistic that doesn’t count for anything, but simultaneously counts for everything.

That statistic is attendance and after averaging 41,880 fans per game in 2016, the Jays again lead the American League with 40,123 fans per game in 2017.

In addition, the Toronto Blue Jays lay claim to an enormous market. In terms of metro-area, Toronto ranks only behind New York, Los Angeles, Chicago, Dallas, and Houston. Most of the cities ahead of Toronto have the population-base to support multiple teams. Toronto doesn’t have multiple teams; in fact, the Toronto Blue Jays are the only team in all of Canada. Canada, for the uninitiated, has a population of around 36M and about 80% of those people still have a television with cable or satellite. A similar percentage has either wired internet or wireless internet.

The Toronto Blue Jays have an astonishingly large market and the infrastructure to reach that market. One way to illustrate the sheer size and availability of their media market is through twitter followers. The Jays currently have 2.037M and trail only the New York Yankees. That’s ahead of perennially large spenders such as the Red Sox, Dodgers, and Cubs.

The Toronto Blue Jays are a large market team with a massive reach, so why hasn’t it translated into one of the Regional Sports Network mega deals?

From Fangraphs, here’s the latest television numbers:

Team 2016 Revenue Deal Deal Start Deal End Ownership More Info
Dodgers $204 M 25/$8.35 B 2014 2038 100% LINK
Angels $118 M 20/$3 B 2012 2031 25% LINK
Yankees $98 M 30/$5.7 B 2013 2042 20% LINK
Red Sox $80 M 2006 80% LINK
Mariners $76 M 18/$1.8 B 2014 2031 71% LINK
Cubs $65 M 2004 2019 20% LINK
Phillies $60 M 25/$2.5 B 2016 2040 25% LINK
Astros $60 M 20/$1.6 B 2013 2032 No LINK
Rangers $56 M 20/$1.6 B 2015 2034 10% LINK
Tigers $55 M 10/$500 M 2009 2018 No LINK
Giants $54 M 25/$1.75 B 2008 2032 30% LINK
White Sox $51 M 2004 2019 20% LINK
Diamondbacks $50 M 20/$1.5 B 2016 2035 Yes LINK
Mets $46 M 25/$1.3 B 2006 2030 65% LINK
Nationals $46 M Arbitration 2006 2028 18% LINK
Orioles $46 M 2006 2028 82% LINK
A’s $41 M 21/$1 B 2009 2029 No LINK
Indians $40 M 10/$400 M 2013 2022 No LINK
Padres $39 M 20/$1 B 2012 2031 20% LINK
Twins $37 M 12/$480 M 2012 2023 No LINK
Braves $35 M 2008 2027 No LINK
Cardinals $33 M 15/$1 B 2008, 2018 2017, 2032 30% LINK
Reds $30 M 2007 2016 No LINK
Pirates $25 M 2010 2019 No LINK
Brewers $24 M 2013 2019 No LINK
Royals $22 M 12/$240 M 2008 2019 No LINK
Marlins $20 M 15/$270 M 2006 2020 No LINK
Rockies $20 M 10/$200 M 2011 2020 No LINK
Rays $20 M 2009 2018 No LINK
Blue Jays 100% LINK

The Blue Jays, as you’ll notice, are conspicuously absent from the table. That’s because the numbers haven’t been made public. At last check, the Jays were bringing in 36M per year a few years ago before signing a self-professed, Multi, Multi-million dollar 8-year deal.

As there’s no real source for television deal information, we’re left doing napkin math using Forbes’ revenue chart. The Jays fall in the range of the Tigers, Braves, Mariners and Rangers. Yet, the Jays average about 15M more than those teams in just gate receipts. The Tigers and Rangers are each at around 75M in gate receipts or about 10M less than the Toronto Blue Jays. These teams average 55M per year on television (despite the Braves broken TV deal) – This would put the Jays television deal (very roughly) in the 40-45M dollar range, a range with the Nationals, Orioles ( deal signed in 2006), Indians (2013), Athletics (2009) and Mets (2006). Right around the number you’d expect Toronto to be at in order to skirt the revenue sharing rules of Major League Baseball.

This is an incredibly rough estimate, but it exposes the anti-trust issues at hand. For the unfamiliar: Rogers is a media company that owns all three facets that make watching the Blue Jays possible. To watch the game, you obviously need a product: Rogers owns both the Blue Jays and their stadium. Furthermore, you need a channel to tune into and Rogers owns that as well. Finally, you need a cable company or provider and Rogers also owns that.

In a sane universe, local sports networks would bid against each other for the Blue Jays television rights. They’d then collect money on advertising, and then pass some costs onto various cable companies via carriage fees. The cable companies would then include that channel in a package and the consumer would pay their $80 per month.

This doesn’t happen for very obvious reasons, though. Third-party cable networks can never match the bid of Rogers because they’re not privy to the same knowledge as Rogers. If the third-party network bids on the Blue Jays, Rogers (acting as the owner of the Jays in this case) really has no incentive to put together a highly competitive team. There’s no guarantee that the Blue Jays will not return to the Blue Jays of the aughts. If TSN (Rogers’ competition) bids on the Toronto Blue Jays broadcasts, then we’ll get a 80-win team whereas if SportsNet (Rogers) bids on the broadcasts, we get a competitive team. Unsurprisingly, after Rogers purchased the Toronto Blue Jays, they slowly increased the number of games that they broadcast until they owned the entire schedule.

Funnelling the least amount of money into the Blue Jays makes the most sense for Rogers given that it’s all going into the same pot. In a situation where the Blue Jays received a market value contract of 100M per year, one third of that would be siphoned into the revenue sharing program and an additional 14% would be channelled into the supplemental sharing pool. The MLB revenue sharing mechanism cannot touch the money from the Regional Sports Network (RSN,) even if it is wholly owned by the same organisation. Thus, the difference between the actual value of the contract and the market value of the contract is 100% profit for Rogers. This isn’t unique to the Blue Jays but it is the most egregious case. Other teams received stock in the RSN as part of their media deal whereas Rogers owned everything from the get-go.

This article isn’t meant to be a hot take-down of Rogers, but rather a reference for future posts. When every aspect of a ball club is owned by the same corporation, monopolistic effects are bound to show up in the worst places. I’ll examine (and by examine I mean thoroughly complain about) those facets in later posts.

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