USA – Honduras – The Media Math of It All

Love that TSG fans are so passionate and care about why they can’t watch the game from the location of their choosing. Let’s consider this our Part IV of our continuing coverage of the USA vs. Honduras under-21 year-olds can’t watch qualifier.

espn8My brother Mark did a great job of updating the info on the bars/establishments. While this is fresh in our minds I wanted to write a morsel of commentary on the economics–which we will tease apart again later if more accurate or validated data comes out.

Here’s the data we do know:

I mean, can't we just put this game on "the Ocho?"

I mean, can't we just put this game on "the Ocho?"

@ 200 establishments publicly signed up to date

@ price range of carrying the telecast: $250 – $3,500 (based on capacity and discussion with bar owners)

Assumptions:

1) The establishment count will reach 275

Media World and Integrated Sports Media (who is handling the sales of the CC feed/event) are currently at about 200 venues with a little more than a week to go. (Note, more bars may be holding the event, but not added to the official list yet).

It’s our guess that they get to 275 here. Why? Well, we learned of the revenue model behind the event (September 12th) and we got a contact for who was handling the distribution a day or so later, so two weeks, 200 bars signed up. That’s 100 bars signing up a week.

Given that Integrated Sports Media probably targeted the easiest ones first we think with a week to go and with a focus on English telecasts (less likely to purchase) that number is going to be smaller than 100. We’ll go with 75 right now, for an overall sum of 275.

2) The average rate for the game will be somewhere between $2,000 – $2,500

This number is the biggest wildcard for two reasons. One, there is the question of how much venue will charge per person to view the contest and how much of this may or may not get kicked back to to Media World.  Two, there is a question of the average capacity of each of these establishments. TSG did a spot check and found that the capacity of the establishments are all over the board.

So we’re going to take our best guesstimate and assume $2,250 fee to carry the game. (This might be heavy, but we’re sticking with it for this analysis.) How we came up with it? Average price per ticket we’re hearing for an event is about $15. Average capacity for a sports bar is somewhere between 120 – 200 folks. We’ll use the 150 “folks” number. That gets us an average take of about $2,250 per establishment. Of course this assumes no mark-up by the bar/establishment.

What is the gross revenue to the rights holder?

Given our numbers that would equate to $619,000 in gross revenue from US CC distribution. So TV networks passed for somewhere presumably above $600K? Well we can’t and shouldn’t surmise that. But we can say is that it is actually in MediaPro’s best interest to close a deal with a TV network so they don’t have to doll a piece of the pie out to Integrated Sports Media, who is handling the promotion, operations, and sales of the event, nor worry about unknown risks (political climate, major news event disruption, etc) heading up to the event.

So, what’s the conclusion?

Well unfortunately, TSG doesn’t have one here, but we wanted to present to you this picture. All things being equal you would have to assume that  it’s in the best interest of FIFA and USSF to have the game televised to the largest audience for the good of the sport. The interesting thing here is that no network picked this game up. What are the differences between this game and other away U.S. qualifiers?

Media Pro is the rights holder as oppose to Traffic Sports USA.

The game is arguably a slightly more valuable media asset. (Essentially the game to go for the U.S.)

This game falls on a Saturday during the height of college football season–the prime telecasts that are typically available in predominantly English speaking bars.

The glimmer of a political conflict–largely unquantifiable–that presents at least a little more risk in the equation.

In short, there is probably no business constituent to blame and no bad guy, just a series of economic variables with smart business folks on either side making smart decisions based upon the risk and the ROI (return on investment).

Again, per our comments  in our last piece, it’s hard to blame either side in this equation. It appears the only way to effect this situation going forward is for USSF and FIFA to realize that the broadcasting of their sport to the widest possible audience is in its best interest and to insure home coverage for an away team next time.

hondo2

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11 responses to this post.

  1. Posted by Matthew N on 2009/10/01 at 5:28 PM

    I guess you can’t blame them for wanting a fair price and you can’t blame bars for not buying it. 99% of the country wants to watch college football instead, so there is really no market for it. I wish they would lower the price for small markets or something. The local bars in my area can’t even afford to order UFC and stuff without charging admission. There is no chance of them ever being to afford $2000+ for a football match.

    Reply

  2. Posted by Renee M on 2009/10/02 at 6:46 AM

    Do we know how much they paid for the rights? It doesn’t seem like they are going to break even with $600,000 in revenue.

    Reply

  3. Posted by matthewsf on 2009/10/02 at 7:13 AM

    This is Matt here.

    Not sure what the fee of gaining the rights was or is. My brother had the same question for the piece.

    I wanted to get as much info out there un hopes I would get some response from the constituents.

    As tsg mentioned were going 100 percent here so I’m going to follow up with espn etc after the event.

    Reply

  4. Posted by Renee M on 2009/10/02 at 9:16 AM

    No problem. Thanks for the insightful post.

    Reply

  5. Posted by Michael on 2009/10/02 at 8:46 PM

    Great analysis of this unfortunate situation.

    How did you learn that approximately 200 venues have purchased the event? Does that number include places other than just the US? I only see 5 bars on the official list and unfortunately, I don’t live close to any of them. Where are these other 195 venues?

    Reply

    • Posted by kaya on 2009/10/02 at 8:59 PM

      They’re all spanish language transmission besides the 5 you see listed.

      Reply

      • Posted by Michael on 2009/10/05 at 4:32 PM

        Given that there are tons of Spanish-language transmission locations listed and only a few English transmission locations, does that mean that they’re charging less for the Spanish transmission?

        Reply

        • Posted by matthewsf on 2009/10/05 at 4:34 PM

          Michael:

          I would highly doubt it and probably guess more. The event will play to the Central American community in the U.S. much better than the American citizenry.

          I also know some of the venues in SF and they are bigger than the average bar.

          Finally, I would imagine that Integrated Sports Media focused on the easy sells first (i.e. the ones willing to pay top dollar).

          Reply

  6. Posted by kaya on 2009/10/02 at 8:58 PM

    Anyone know who we’ll have the pleasure of listening to commentate for $20+ a head?
    I’m not even sure I want to listen en ingles since I can practically roll down the street to Rocapulco.

    Reply

  7. [...] by matthewsf in Broadcasting, USMNT. Leave a Comment Last week, we did a review of the potential gross windfall for Media World through going the CC route with the USA-Honduras [...]

    Reply

  8. [...] USA – Honduras, the Media Math of It All – Part IV of Media Rights coverage (10/01) [...]

    Reply

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