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http://nypost.com/2015/08/27/steve-ballmer-rejects-60m-offer-so-he-can-stream-clippers-games/
Steve Ballmer, the owner of the Los Angeles Clippers, has turned down a $60 million-a-year offer for local TV rights and is forging ahead with a plan to start his own over-the-top streaming network, The Post has learned.
If he follows through on the plan, Ballmer, the former CEO of Microsoft, would be the first owner of a major US sports team to deliver games direct-to-consumer via a Web-based service and not through traditional cable or satellite companies, sources said.
Clippers games are now aired to roughly 5 million Los Angeles-area homes through Fox Sports’ Prime Ticket regional sports network in a deal that runs through the 2015-16 season.
Prime Ticket currently pays the team a rights fee of $25 million a year — and offered a 140 percent increase, to $60 million, but the billionaire Ballmer turned it aside.
Prime Ticket’s exclusive negotiating window closed in June, one source said — meaning Ballmer is free to negotiate with others.
Some observers think the bombastic Ballmer is merely using the threat of forming an over-the-top network as a play to wring more mon*ey from an RSN.
But others think the plan is real.
“Steve Ballmer has not renewed his deal with Fox,” said one source close to the situation. “He’s looking at a [digital] subscription channel.”
The 59-year-old Ballmer’s tenure at Microsoft gave him direct insight into the world of live-streaming video — thanks to the success of its global Xbox gaming console.
While he may have the technological smarts to pull it off, Ballmer may find it hard to earn more than $60 million in revenue a year from a single sport streaming RSN, experts said.
The Clippers would have to sign up around 10 percent of LA’s 5 million households and get a pretty high price for the service, those people said.
“If it costs $12 per month, multiply that by 12 months in 500,000 homes, it would add up to $72 million — but then you’d have to produce the games and market the product,” said one.
And that’s if Ballmer can give fans a reason to subscribe during the five-month off-season.
If he can’t, revenue would only come to $42 million.
“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,” said another source familiar with the discussions. “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.”
This person believed that Fox’s offer represents a much better deal, but added it appeared Ballmer has his heart set on being a tech pioneer.
Ballmer paid $2 billion for the team in 2014 after then-owner Donald Sterling was caught on tape making racist comments. Sterling was forced by the NBA to sell the team.
At the same time, the NBA might frown on the over-the-top move if Ballmer fails to get a sizable audience.
Reached on Thursday, a Clippers spokesman said, “Steve Ballmer is exploring any and all options, including a new deal with Fox.”
Steve Ballmer, the owner of the Los Angeles Clippers, has turned down a $60 million-a-year offer for local TV rights and is forging ahead with a plan to start his own over-the-top streaming network, The Post has learned.
If he follows through on the plan, Ballmer, the former CEO of Microsoft, would be the first owner of a major US sports team to deliver games direct-to-consumer via a Web-based service and not through traditional cable or satellite companies, sources said.
Clippers games are now aired to roughly 5 million Los Angeles-area homes through Fox Sports’ Prime Ticket regional sports network in a deal that runs through the 2015-16 season.
Prime Ticket currently pays the team a rights fee of $25 million a year — and offered a 140 percent increase, to $60 million, but the billionaire Ballmer turned it aside.
Prime Ticket’s exclusive negotiating window closed in June, one source said — meaning Ballmer is free to negotiate with others.
Some observers think the bombastic Ballmer is merely using the threat of forming an over-the-top network as a play to wring more mon*ey from an RSN.
But others think the plan is real.
“Steve Ballmer has not renewed his deal with Fox,” said one source close to the situation. “He’s looking at a [digital] subscription channel.”
The 59-year-old Ballmer’s tenure at Microsoft gave him direct insight into the world of live-streaming video — thanks to the success of its global Xbox gaming console.
While he may have the technological smarts to pull it off, Ballmer may find it hard to earn more than $60 million in revenue a year from a single sport streaming RSN, experts said.
The Clippers would have to sign up around 10 percent of LA’s 5 million households and get a pretty high price for the service, those people said.
“If it costs $12 per month, multiply that by 12 months in 500,000 homes, it would add up to $72 million — but then you’d have to produce the games and market the product,” said one.
And that’s if Ballmer can give fans a reason to subscribe during the five-month off-season.
If he can’t, revenue would only come to $42 million.
“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,” said another source familiar with the discussions. “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.”
This person believed that Fox’s offer represents a much better deal, but added it appeared Ballmer has his heart set on being a tech pioneer.
Ballmer paid $2 billion for the team in 2014 after then-owner Donald Sterling was caught on tape making racist comments. Sterling was forced by the NBA to sell the team.
At the same time, the NBA might frown on the over-the-top move if Ballmer fails to get a sizable audience.
Reached on Thursday, a Clippers spokesman said, “Steve Ballmer is exploring any and all options, including a new deal with Fox.”
