Los Angeles Clippers owner Steve Ballmer turned down a $US60 million per year local broadcast rights offer from Fox because he wants to air the team’s games on a new standalone streaming service, Claire Atkinson of the New York Post reports.
The Clippers’ current local TV rights deal with Fox Sports Prime Ticket, which expires after this season, pays them $US25 million a year. According to Atkinson, Fox proposed a 140% hike in rights fees, but Ballmer turned it to down.
“He’s looking at a [digital] subscription channel,” a source told the paper.
If we assume for a second that this isn’t a negotiating ploy (a big assumption), it looks like Ballmer’s move is more about breaking new ground than a simple revenue calculation.
That $US60 million per year would be the second-biggest local TV deal in the league. While much of the TV industry is in decline, you’re still doing pretty good if you’re in a position to sell live sports rights. The NBA’s new national TV deal with ESPN and TNT nearly tripled the annual value of the old deal. The latest rights deals for the NFL, EPL, and college football saw similar jumps.
A source told the Post that it’d be tough to surpass $US60 million with a subscription model:
“Ballmer is going to want to explore his option on the tech side, but the cable model is still a pretty reliable source of revenue. If they go OTT [over-the-top], they’re taking an enormous risk, and they’re not the most prominent team in LA — they are second-best.”
Every NBA team has a local TV broadcast deal, though the league will introduce a paid service for individual out-of-market games next season.
Business Insider Emails & Alerts
Site highlights each day to your inbox.