When the NBA returns, it’ll be without Bezos

Maybe Jeff Bezos will become an NFL owner after all. Since it’s apparent from this recent Seattle Times article that a Sonics placeholder owner is already seated. Samantha Holloway, David Bonderman’s daughter, is now co-owner of the franchise and reiterated her family’s desire to lead the way in returning an NBA franchise to the city.

This was always going to be the cleanest way to bring the league back. With ownership of the arena shared by OVG and Kraken ownership, having Holloway/Bonderman own the Sonics as well allows for an easier allocating of revenues generated by the building. It also lessens the chance of future conflict that some situations entail when ownership is split between building, NBA and NHL (ie, Philadelphia, Los Angeles). Instead, the family would join a small circle of owners that majority own teams in both the NBA and NHL, while also holding a stake in the arena (New York, Washington, Toronto, Denver).

The cost of an NBA expansion franchise is thought to be at around $2 billion the next go around. So even with Bonderman’s net worth estimated anywhere between $4-6 billion, additional minority partner stakes are likely to be available. Given Bonderman’s private equity background, and the NHL and NBA’s acceptance of such groups holding minority ownership shares, don’t be surprised if the future Kraken/Sonics ownership entity includes private equity ownership. It’s becoming more common across sports, except the NFL (where it’ll get eventually), as the cost to participate in team ownership escalates.

The puzzle to return the NBA to Seattle is nearly complete. We know the arena. We know the ownership. We know the likely timing in the mid 2020’s, after the NBA has negotiated a new CBA and a new TV deal. What’s left is the actual announcement of expansion and finding out who the legitimate rivals to Seattle are for the anticipated two new franchises.

Changes to Sports Talk Stations

Last week saw changes to both sports talk stations. But not in personalities or content. Rather, it was more marketing driven in each case. First, Seattle Sports 710 is the new name of the ESPN affiliate in the market previously known as 710 ESPN Seattle. This seems like Bonneville International is making an effort at common branding across its sports stations. Arizona Sports 98.7 FM is the prime example as the ESPN affiliate in Phoenix. Bonneville activated that brand quite a few years ago. The announcement from 710 notably mentioned their programming being live and local across platforms, not just radio. It so happens that rival Sports Radio KJR has always used the live and local moniker as well.

And that brings us to the second change of the week. KJR announced its move to 93.3 FM, while still simulcasting on 950 AM for another month or so. That station previously simulcasted on FM for a couple of years about a decade ago. That was a low power station, whereas 93.3 has a strong signal and has previously been the home to some popular stations. This measures as a more significant move than 710’s rebranding, as many sports talk stations across the country have been moving to FM to capture larger audiences. And KJR picks up a stronger signal to boot.

One has to wonder whether this puts pressure on Seattle Sports 710 to consider an FM move. Bonneville’s hurdle will be its lack of a local portfolio of stations to juggle around (compared to iHeartMedia), especially considering its 97.3 FM frequency is home to a well rated new talk station. So, there’s probably more to come as these two sports stations square off, knowing a bidding for the radio rights to an eventual NBA team in the market is in the not too distant future.

Review Preview

And now, with caution, it’s time to look back at some of last year’s potential scenarios. But also adjusting for what to look out for this year.

The Kraken did indeed choose one of the two sports talk radio stations in town, KJR-AM, as its flagship. And they went with Root Sports Northwest as their television home. In doing so, Root strengthened its position in a difficult world for RSNs. Along with partnering with the Kraken, the network also teamed up with the Blazers, whose former home (NBC Sports NW) ultimately went dark with the loss of it’s primary programming. With new teams in tow, Root then picked up some streaming partners along the way, allowing cord cutters an option for finding the channel. For now AT&T remains the Root ownership double play partner with the Mariners. After AT&T splits off Warner Media to Discovery later this year, we may get a better idea whether that new entity wants to remains involved in RSNs. Or who they may spin them off to.

In local soccer, all was mostly quiet off the field. Getting through the season seemed to be the priority for the Sounders versus focusing energy on the training facility decision. Speculation still swirls that the organization is close to announcing…something. And the Reign also need a training facility. Their surprise announcement in December that Lumen Field will now be their home might indicate further collaboration with the Sounders. Perhaps in the form of a training facility?

And speaking of training facilities, the Storm will have their new practice home in Interbay after the ownership group purchased property in the neighborhood and got rezone approval for their plans. Could that facility work as a temporary practice gym for an NBA team?

Movement towards NBA expansion slowed after the first quarter of the year. But most signs still indicate a team could be here sooner than later. We’ll hear more about this as the year progresses.

What else to watch for this year? We’ll find out if Seattle is chosen as a host city for the 2026 World Cup. This would be on the heels of the M’s announcing they’ll host the 2023 MLB All-Star Game. And their renovating of the former Pyramid Brewing block. Maybe SoDo is coming together. The sportsbooks are open at tribal casinos with sports betting a go. Look for further pushing to incorporate mobile betting, as that’s where states really bring in the revenue. That will also continue to find resistance amongst some factions. Major League Soccer will negotiate its new TV deal, which will begin with the 2023 season. That could have implications for the future of the Sounders local TV rights.

All right. That’s a start. And an end. Onward with 2022.

Root Sports and the Blazers Team Up

Root Sports NW and the Trail Blazers agreed on a reported four year deal to place the team’s games back on its previous television home, beginning this fall. The Blazers jumped to the now NBC Sports NW in 2007 after being unable to reach an agreement with Root (then known as Fox Sports NW). The tension in the relationship then was not only over price, but also the Seattle based network giving priority to the Sonics, whose rights it also held.

So the Blazers are back, but there is still a Seattle winter sports team primed to garner a lot of attention. That, of course, is the Kraken. It’s a bit ironic that Root and the Blazers have occasionally discussed getting back together, most recently a few years ago, but the RSN was always left empty for winter programming. So after having a gap in their winter programming since the Sonics theft, Root will be adding the Kraken and Blazers together. Scheduling conflicts are assured, but it’s nothing an overflow channel can’t solve, as is done in other markets whose RSN carries both NHL and NBA teams.

Discussion around this deal highlighted that Root is in more homes (2M) than NBC Sports NW, who struggled with carriage since it’s inception with the Blazers in 2007. However, NBCSNW has had more streaming carriage than Root, which Root has indicated they are trying to improve. As most RSNs are struggling with carriage, those 2M homes that Root are in is down from over 3M a handful of years ago. However, at an anticipated $5.03/sub retransmission fee next year, that’s over $120M in subscriber revenue a year. Estimate another $20M/yr in ad revenue means Root is doing okay at $140M/yr. Getting the Blazers helps ensure carriage of the network in Oregon, along with expanding the Blazer’s presence in Washington, Idaho, Alaska and part of Montana. Root also carries some Timbers matches, but those are likely to disappear in 2023, as many media observers expect local MLS TV deals to be rolled up into the national package that would begin that year.

The Mariners don’t get all of the estimated $140M/yr. As about 30% of Root is owned by AT&T’s WarnerMedia, which is in the process of being spun out and merged with Discovery, the telecom likely gets some portion of the revenue for operating the network. But it’s a nice chunk of change while figuring out the future of the network, probably as a stand along streaming service or combined with other sports subscription properties.

As for the Blazers? This is good in the short term. If a future NBA team returns to Seattle, and on Root, the Blazers likely search for another TV home. They’d be the odd Portland team on a Seattle RSN with two winter sports teams to promote. It’s a tough spot because without another Portland team to share a Willamette RSN with, the Blazers and NBCSNW just proved an NBA only network isn’t feasible. And teaming with the Timbers and Thorns is no longer an option. But, hey! For the first time in a long time for most viewers, Root will be worth tuning in to when baseball season ends.

KJR Adds the Kraken

A handful of weeks after announcing a partnership with ROOT Sports for TV coverage, the Kraken moved forward on the radio side, teaming with 950 KJR. The agreement includes Climate Pledge Arena, which is relevant to the FM cluster of iHeartMedia stations for concert promotion opportunities. This deal comes a year after KJR brought UW athletics back to the station after a brief hiatus. And it follows three years after the station became the Sounders flagship. Rival 710 ESPN Seattle carries the Mariners, Seahawks and WSU athletics.

These moves gave KJR live, local games and shoulder programming after quite a few years of having none. This was significant for a station that always has played up its live and local aspect, to say nothing of having a rival now in town with big time local rights. While the agreement with KJR is not a surprise, the outwardly apparent ease with which it happened was.

Over the past couple of years, KJR has had regular segments of hockey content, including those with Kraken employees. Kraken radio play by play announcer Everett Fitzhugh is a regular guest, for instance. Across town, 710 ESPN has had nothing similar. And that seemed to matter to the team. The actions of both stations indicated to the Kraken that they mattered more to KJR. That could be. 710 ESPN might be comfortable with their current stable of partners.

What’s notable is how this sets up if the NBA returns, which seems more and more likely. If Kraken ownership is involved, KJR likely is in a better spot as a current partner. Alternatively, 710 ESPN would have more available airtime during the winter. And if the ownership group wanted official relationships with both stations, that’d also put 710 in a better spot. But if the decision is based on which station has played more of a role in keeping the Sonics front and center over the years, that again leans to KJR. This may shake out sooner than anybody imagined, though for now, KJR can bask in the glow of teaming up with the new team in town.

Seattle Sports Matrix

After the Kraken ROOT Sports deal, I thought I’d update the matrix, which shows where some relationships can develop between the teams, facilities and media partners. To follow, choose a team in the middle column, then follow the line to either the facilities or media column. Based on this, one could speculate that the Kraken might choose 710 ESPN rather than 950 KJR as their radio broadcaster. I’ve previously laid out the radio outlook. As this shows, the Reign do not share any local media or facility relationships given these parameters.

Kraken Skating with ROOT

This week, the Kraken and ROOT Sports announced their partnership, a five year agreement according to some reports. The bigger surprise may have been the naming of the well regarded John Forslund as the team’s TV voice. That has already generated positive attention. There had been speculation that the team might go with a streaming partner, or otherwise choose a less common route to televising their games than the RSN method. But practically, when considering their pledge to reach as many potential fans as possible, partnering with ROOT was not a surprise. Despite cord cutting and shaving, ROOT still reaches a wide audience in the Northwest. The effort to reach fans who only stream apparently will wait, unless a streaming player ends up purchasing AT&T Sports Networks.

If anything, a surprise might be the roughly 75 games the network expects to televise, essentially all the non nationally televised games, squeezing out opportunities for a streaming or over the air partner. But this gives fans reason to tune into ROOT outside of baseball season for the first time since the Sonics were the off season TV partner. Whether some Timbers or Gonzaga games, or Big Sky football, this is still a Seattle centric network. So it made sense for the M’s to want to add content that would capture the attention of Seattle sports fans. They could probably further strengthen the network by adding more Seattle focused programming. In the end, this makes sense for both sides. It’ll make ROOT a bit less M’s dependent, which may help when it comes to future carriage negotiations.

What’s happening, 2021!?

Just so I can more easily tally up how wrong I’ll be when scoring at the end of the year, let’s go through some scenarios that might, and will, take place this year. And you may recall, this is all free…

The Kraken will announce their media partners. They have no real incentive to do this until after the NHL completes its next TV deal negotiations. But I do expect that both radio and TV/streaming plans will be unveiled before the expansion and amateur drafts in July. That way, the partners can be included in what’s sure to be much pomp and circumstance for the proceedings.

While it’s easy to see KJR or 710 taking the radio rights, the video side is more difficult to peg. I wouldn’t be surprised to see a layered approach, including broadcast, RSN and a streaming element as a way to reach the most possible fans, from casual to avid.

Likely sneaking under the holiday radar as the year ended, the Reign are sure to see relocation talk come up again during the year. Even if the remarks were off the cuff, this is the type of talk that obviously makes fans here especially sensitive. But if local ownership were needed to keep the franchise from departing, you’d have to think between local individual investors, the Sounders and the Seahawks, something positive could be accomplished.

The pandemic has slowed talks of the Tacoma stadium. And it’s hard to imagine that being revisited this year. Though between the parties mentioned as potential investors, some short term stadium solution is attainable in the market.

Though previously estimating a potential return of the NBA in 2025, billions in losses tend to change timetables. The recent chatter by Adam Silver and Tim Leiweke is not coincidental. There’s no smoke here yet, just smoldering. Expansion riches to current NBA owners quickly helps offset pandemic induced losses. Meanwhile, the costs of Climate Pledge Arena escalate, while the rapid return of the live concert business, a key revenue driver to assist in paying down the arena debt, looks increasing dim. Another anchor tenant would sure help with arena revenue. All signs point to Jeff Bezos as the local NBA investor. If he joins the Kraken group in some type of joint ownership of an NBA team, it makes sense. The Kraken ownership could use not only another ‘whale’ investor, but one who could take the reigns of the whole thing (Kraken, Sonics, arena share) in the future.

It’s nearly beyond belief that a Seattle NBA expansion team could be introduced by the end of the year. If the NBA is desperate, perhaps they announce Seattle, then take a little more time before identifying franchise #32. This wouldn’t be much different than what the NHL did for #31 and #32. More likely, the league welcomes expansion applications this year, with the winning groups notified during the All Star break in February ’22. That’d still give the teams ample time to get ready for a 2023-24 season tip.

A frequent topic here is Root Sports Northwest, and its potential should the Mariners seek to build it out. The current industry dynamic between MVNOs, RSNs and streaming is real and complicated. For purposes here, the M’s are in a good spot since they have majority ownership of the network. By year end, we should at least know more about its future viability as a cable TV embedded RSN based on at least two things. Will the Kraken partner with the network? Who will be the minority partner in Root if AT&T finally sells its group of RSNs? And how will that new owner and the M’s plan to secure the network’s future, whether via MVNOs or streaming?

An expanded training facility at Starfire, or a brand new one elsewhere, is the decision awaiting the Sounders. They were supposedly closer to making progress on a decision pre-pandemic. The club’s cash flow issues in 2020 were real. This undoubtedly pushes back any planning for the facility. Even though they’re not linked via ownership, is there a way for the team and the Reign to combine efforts in their seeking a facility? I can only guess if that’s more cost effective for both. Major League Soccer teams are upping the ante when it comes to training facilities, so it’s time for the Sounders to enter the fray. Look for more news on this in 2021, even if a final plan is not yet official.

There’s more. But these are some of the bigger issues I’ll be watching for this year. And just as every year does, 2021 will surprise us. Let’s hope we’re weighted more towards the positive ones in 2021.

The 710 ESPN changes continue

With ad revenue declining due to the pandemic, 710 ESPN today announced the departure of John Clayton, Tom Wassell and Jim Moore. The three had been mainstays at the station since practically the start. Clayton, particularly, had been a big ‘get’ for the station in its infancy. These moves follow the departures of Lydia Cruz (and Jessamyn McIntyre to KCPQ) recently. Privately held Bonneville International, 710’s parent, is likely suffering in many of its markets, which are primarily in the western U.S.

Two of the departures are from shows which had three co-hosts, which is always tough to pull off successfully. Yet many sports radio stations continue to try it. Yet that’s one thing that distinguished 710 from KJR, which has not had any shows with three co-hosts recently.

The changes to the lineup aren’t sustainable, and are likely temporary until the station gets through the difficult ad environment. By adding two hours to the afternoon show, one on each end, listeners are guaranteed repeat content in the five hours. And Paul Gallant’s solo 10am hour is an odd fit before the midday show of Stacy and Jake starts, and ends, an hour earlier. This all comes a couple of weeks after 710 promoted their new Saturday schedule, which not only brought back Sports Saturday for a couple of hours, but also extended Clayton’s show to two hours.

These pandemic induced changes happen in the shadow of a fairly big story to come in local sports radio: the future home of the Seattle Kraken. We’re likely to know that outcome no later than the end of the spring, if the NHL is serious about getting the 2021-22 season back to its usual schedule. Though 710’s ratings have generally exceeded those of KJR, perhaps helped by being the flagship to the Seahawks and Mariners, that’s no guarantee of…ahem…reeling in the Kraken.

As the sports media industry struggles to endure the pandemic, 710 will juggle that reality while positioning itself to win the Kraken’s rights. There’s little doubt that this market is big enough for two sports radio stations. But no one ever said it’d be easy.

Sounders to test the Amazon stream

What to make of Prime Video as the new streaming partner for the Sounders? If you missed it, the company becomes the local streaming partner of the team for all non-national games through the end of the 2022 season. This cleans up a lot of issues fans outside the Seattle/Tacoma area, who don’t receive the JoeTV signal, had with previous streaming partner YouTube TV.

Via Sounders website

We’ll see where this partnership goes, but right now, beyond matches, Prime Video’s team site will host interviews and post game pressers. This is the type of content that’s already available on the Sounders’ YouTube channel. Obviously, the site could be an entry point to Sounders gear. In partnership with Twitch, there might be opportunities for alternate feeds to the matches such as social interaction, statistics or different camera angles. Team related podcast hosting might be another use for the site, as a crossover with Amazon’s rumored interest in local sports podcasts. But again, in many cases it’s a matter of taking content that already exists elsewhere, often free, and collecting it on a Sounders Prime Video page.

Amazon is such a huge company that all their activity in sports is nothing more than an experiment. To impact the company’s revenue and earnings, the company would need not just a few teams to partner with, but multiple leagues in their entirety. If the company wants Prime Video Sports to become the ESPN of streaming, there’s a long way to go, but they’ve got to start somewhere.

As a final thought, Amazon’s minority interest in the YES Network might just be an example of a test case in the major U.S. media market with a famous team. But with AT&T looking to unload their RSNs, this presents an opportunity for Amazon to again team with Sinclair to add these networks to their portfolio. Root Sports Northwest, majority owned by the Mariners, happens to be one of these. Having an ownership stake in an RSN would potentially allow for easier collaboration on the streaming side while allowing Prime Video to learn more about producing actual games. Anybody remember Prime Sports Northwest? Maybe another version awaits in the future.

Back to the future?