02 May 2006

A's SuperStation: A Missed Opportunity

With all of the upheaval happening in cable and broadcast television, it can be difficult to keep track of the casualties. Take for instance the once-fledgling networks, UPN and WB. Both thought they could be the next FOX by following the FOX blueprint of making shows for specific target audiences. In UPN's case the audience was blacks, followed by sci-fi. For WB, the target was the under-30 crowd. The failure of both experiments was finally made clear as parent companies Warner and Viacom announced a joint venture that would bring the best of the two networks together. The new network will be called CW, a nod to its Warner and CBS/Viacom roots. Its target audience will once again be young people, evidenced by its holding onto UPN's WWE franchise and several WB dramas.

Most of the stations that will make the switch to CW are currently WB affiliates. This is not the case in the Bay Area, where current UPN station KBHK-44 will be the local CW affliate. Moreover, FOX's recently announced and also youth-oriented My Network TV will appear on stations around the country formerly occupied by UPN/WB. The Bay Area is an exception in this case too, as KRON-4, once the proud local NBC affiliate, will carry My Network TV's limited (and based on KRON's existing programming, anti-KRON) lineup.

So what's to become of KBWB, the current WB-20 (formerly KOFY)? Parent company Granite Broadcasting had its earnings call today, and it announced that KBWB and WDWB-Detroit will be sold to a consortium of investment groups (including at least one hedge fund) for $150 million. KBWB and WDWB were supposed to be sold last year to a group that included several Granite shareholders, but the CW announcement effectively killed the sale so no network would be affiliated. In 1998, former station owner James Gabbert (does anyone remember the subliminal message scandal from several years back?) sold KOFY for $170 million to Granite, which immediately changed the call letters to KBWB. According to WDWB's Wiki entry, Granite is in danger of default (though it's not clear if the default is for either station or both), so it makes sense that the deal was for cash.

This looked like a unique opportunity for certain Bay Area investors if they felt emboldened by their $54 million equity gain (hint hint). There were several advantages for the A's if they acquired or partnered in acquiring KBWB:
  • They'd be able to finally quell criticism about poor signal emanating from KICU-36. KBWB's transmitter is on the always centrally located Mt Sutro, not in Fremont (KICU's current locale) or near Loma Prieta (KICU's former locale).
  • In future arrangements, the team would have full control over how many games could be on KBWB, as opposed to either FSN Bay Area or Comcast Sportsnet. The A's would finally have their own broadcasting megaphone, which should automatically give them some leverage over the regional sports networks (RSN's) and cable operators. They could also exercise a "convenient" revenue agreement between the team and station, the kind KTVU-2 and the Giants supposedly enjoy.
  • The entry price could be extraordinarily low, especially compared to the $700 million Young Broadcasting paid to buy KRON.
  • The A's would avoid the subscriber-carry problems that come with starting up a RSN.
  • The A's would immediately have a larger audience for advertisers than with a cable network relegated to digital-only, as CSN and FSN+ currently are.
  • An agreement could be put together starting in, say, 2011, in which Bay Area broadcasts would be handled by KBWB while Sacramento and the Central Valley would have broadcasts on CSN.
  • Control over the station would allow them to do more brand-building exercises, such as game replays or capsules (FSN did these a while back), or extended or more frequent pre-game shows. AN TV anyone?
  • In 2004, Granite invested in a DTV setup to replace the station's old analog equipment. That means the station is able to do HDTV out of the box, and they'd have the potential for two additional digital channels (AN TV anyone?). More HD broadcasts of A's games can't be a bad thing.
  • Should the A's really go after a MLS franchise, they'd immediately have a local broadcasting platform that MLS would kill for.
  • By including the station in the A's ownership group's holdings, franchise value could go up significantly, perhaps as much as it would once a new ballpark is up and running.
  • Success gained in the local television market should lead to the radio market opening up nicely for the A's.
Obviously, there are caveats to such an acquisition. Programming an independent station outside of the sports programming tends to be a crapshoot these days, with the virtually unlimited number of syndicated shows - especially crappy shows that really don't deserve to be in syndication. There are existing broadcasting agreements that would have to expire before the A's could get really aggressive with their own network. They'll have to hire industry veterans that know how to run stations - they could keep KBWB's staff intact. The A's have a long road towards proving themselves a worthwhile ratings performer on TV. And a "free" TV station wouldn't net the handsome subscriber fees a cable-based RSN would. The price would have been $75 million for the KBWB. It's easy for me to judge when it's not my money, but $75 million doesn't sound like a large amount when one considers the potential above.

Think about it. Wouldn't this have been a great way to enter the media market and solidify the A's presence? Would it not be a huge paradigm shift, moving from being a team with little leverage over its broadcasting future to one with potentially enormous leverage? If the A's were surveying the market, they should have been aware of the possibilities. Did they show any interest? I intend to find out.