Mariners purchase majority stake of ROOT sports, and why that matters

The Mariners announced Tuesday a new partnership with TV rights holder DIRECTV Sports Networks (which owns ROOT Sports) that will give the Mariners the majority stake in a regional sports network partnership.

You can read the entire release below, but first a couple of notes. For starters, the new agreement runs through 2030, and the network will continue to operate under the existing ROOT Sports brand. If you currently watch the Mariners on ROOT as part of your cable package, you’ll be able to do so in the future.

So if your ability to watch the Mariners at home doesn’t change, why should you care about this? Well this is the first step for the Mariners in potentially making a lot of money on its TV rights, which one would hope would lead to a better product on the field. Teams controlling their own TV rights and running regional sports networks has become the new cash cow in professional sports, where TV money is now much more important that ticket revenue. The Dodgers recently sold for more than $2 billion not because the new ownership group thinks it can make that money back in ticket sales and concessions, but because they expect to make billions in TV money. In Texas, the Rangers and Fox Sport Southwest recently agreed to a deal reportedly worth $3 billion. L.A. is obviously a much bigger TV market than Seattle, as is Dallas/Fort-Worth, but the Mariners still stand to make a lot of money when they can opt out of their current deal in 2015.

What will be interesting to watch now is what happens if the NBA and/or NHL come to Seattle. In many cities, multiple sports teams have partnered on regional sports networks. Would the Mariners, a team that has fought Chris Hansen’s SoDo arena plan, end up trying to team up with the Sonics to maximize revenue? Or would Hansen be willing to work with the Mariners despite their efforts to keep an arena out of their back yard? All of that remains to be seen, but what we do know is that Monday’s news should be good for the Mariners down the road.

Here is the press release from the Mariners:

The Seattle Mariners and its long-standing TV rights holder, DIRECTV Sports Networks (DTVSN), today announced a new regional sports network partnership in the Pacific Northwest. The Mariners hold a majority stake in the new venture. DIRECTV Sports Networks, which owns and operates two other regional sports networks based in Denver and Pittsburgh, assumes a minority position and will continue to oversee the day to day management of the Northwest network.

As part of this new agreement, the network will televise Mariners baseball through the conclusion of the 2030 Major League Baseball season. DIRECTV Sports Network’s current ROOT SPORTS™ Northwest entity and related assets will be contributed into a new jointly owned entity, which will operate under the existing ROOT SPORTS brand.

In addition to the Mariners, the network will provide other professional, collegiate and high school sports programming year-round.

Mariners Executive Vice President of Business Operations Bob Aylward explained, “This is great news for the Mariners and for sports fans in the Northwest. We are excited to continue our partnership with DIRECTV Sports Networks in this new way. We are investing to own a majority share of the new venture, and committing our rights well into the future, confident that this will maximize the value of our television rights and, more importantly, provide the resources to remain competitive on the field for many years to come.”

DIRECTV Sports Networks President Patrick Crumb said, “This is an opportunity to strengthen and extend our relationship with the Mariners for decades while continuing to leverage DIRECTV Sports Networks’ overall resources and expertise for the benefit of our new partnership with the Mariners in the Northwest region. This new structure will truly align our interests and allow us to work together to maximize the potential for the network and our coverage of Northwest sports.”

New York investment bank Allen &Company advised the Mariners on this transaction, guiding the club through the development and creation of this new venture. The Allen &Company team, led by Steve Greenberg, has extensive experience in the sports television industry, having negotiated television agreements for many professional sports franchises.

Greenberg said, “With the formation of this new regional sports network partnership, the Mariners have taken a significant step forward. MLB clubs that own a substantial stake in their own RSN’s tend to be among the strongest and most stable franchises in the league.”

Since its original incarnation as Prime Sports Northwest in 1994, ROOT SPORTS Northwest has increased the number of Mariners games it provides each season to this season’s high of 159 and added production innovations and interactivity to boost fans’ in-home experience of the team. ROOT SPORTS Northwest currently reaches approximately 3.2 million homes and that extended reach has helped the Mariners to become the Northwest’s Team.

About DIRECTV Sports Networks: Seattle-based DIRECTV Sports Networks is a wholly owned subsidiary of DIRECTV and operates three regional sports networks branded as ROOT SPORTS. The three networks (based in Bellevue, WA, Denver and Pittsburgh) are distributed across 18 states and hold exclusive regional telecast rights to more than two dozen professional and collegiate teams including the Seattle Mariners, Colorado Rockies, Pittsburgh Pirates, Pittsburgh Penguins, Utah Jazz, Seattle Sounders FC, Portland Timbers and Gonzaga University. The ROOT SPORTS Networks also provide Big Sky, Mountain West, Pac-12, Big 12, Conference USA and other collegiate football, basketball and other events.

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