Reports indicate that Fox Sports is on the verge of closing on its purchase of SportsTime Ohio, a network with approximately 2.8M subscribers owned by the same family that owns the Cleveland Indians. At a more than $235M purchase price, let’s say $250M, this works out to about $90 per subscriber. The network has little programming beyond the Indians, such as Ohio high school sports and local, non Big Ten sports. And despite being owned by the Indians ownership group, STO has had problems getting carriage agreements in its six years in operation. All in all, STO is a lot like ROOT Sports Northwest.
ROOT is almost entirely dependent on the Mariners. It does have rights to the Sounders outside the Puget Sound area and also is a partner of the Timbers, but beyond that it shows Washington high school sports and some non Pac-12 sports. By placing a $90/sub multiple on it’s 3.7M subscribers, you get a valuation of $333M. This is a price the M’s should be willing to consider to purchase ROOT to gain full control of the network. At a conservative $1.75/sub monthly charge to carriers for the network, this works out to $78M a year in revenues without considering the impact of advertising revenues that would also go straight to the club. In just fours years, they’d nearly make back the entire purchase price of the network. By purchasing ROOT, the team would get a network that already has carriage agreements and a staff, avoiding all the hassles of starting up a network from scratch on their own. The benefits and risks locally are pretty much the same as they were a year ago. After gaining ownership of ROOT, the M’s could then work to add programming that makes the network even more valuable while having the option to add partners when the right situation arises.