This title may be a little misleading since I am basing my opinion on what I think Cuban is doing. I think Cuban is setting up his cable channel, HDNet to have a sports package similar to WGN or YES. I initially figured Cuban would be more likely to make a bid on the Stars in order to get 100% ownership of the cash cow AAC. He looks to be going instead after the Rangers. Now we're seeing News Corp. step in as if it was threatened by Cuban's move, despite having existing television deals with the Rangers, Mavericks and Stars. This level of paranoia got me thinking that maybe there is more to the Rangers value than I thought.
1. Can Cuban make a Dallas version of WGN or the YES network? WGN is the only superstation that transmits local Chicago teams (Cubs and White Sox) to a national audience. The Braves used to do this on TBS, but not anymore. The YES network is not a superstation but still is available nationally. It shows Yankee and Nets games, as well as magazine programming for the Giants. Cuban's HDNet currently shows MMA, UFL and other minor sports. It has just been dropped by Time Warner over failure to negotiate rates. Basically TWC doesn't see HDNet as valuable as HDNet thinks it is.
2. Why would Cuban do this? In short, money. Putting the Rangers, Mavs, and possibly Stars games on Cuban's channel would potentially increase ratings and allow HDNet to charge higher fees to the cable/satellite provider and to the advertisers. The Rangers have a built in star in Hamilton that already has name recognition. If HDNet gets its subscription numbers up, they might even out bid Fox Sports Southwest for Cowboys magazine programming. This would get the national audience of the Cowboys off the regional Fox channel, to a national audience of HDNet.
3. Is this worth it? I know what you're saying. The Cubs, Yankees, and Red Sox have national followings that warrant national coverage on WGN, YES, and NESN. In addition, these networks carry other sports besides their flagship teams. Cuban already has the Mavericks and having a second team to pair them with would fit the existing model (WGN carries some Bull and Blackhawks games, YES carries the Nets games, NESN carries the Bruins games).
4. Why the Rangers? The Dallas area's big team is the Cowboys, but the NFL controls TV contracts for games so HDNet can't get the Cowboys (obviously). It may also be because Cuban couldn't get the Cubs (who might be forming their own network). Cuban has been trying to get a MLB club in the past and may have had the idea of putting the Cubs on HDNet if he were successful. Not being from the city may have played a part. Owning the Mavericks may give MLB pause when Cuban wanted to buy a team in another city. Having ties to the community may or may not affect MLB's willingness to accept Cuban. If it does, it now comes down to the Rangers or Stars which are located in the same city as his Mavericks and conveniently for sale. [EDIT]Cuban blogs here that the reason it fell through was due to lesser financing.[EDIT]
Having the Rangers instead of the Stars means the sports are staggered on the calendar and the games are almost every day. That's a lot of sports product to put on TV meaning a lot of advertising. Do people care enough about Hamilton and the Rangers to actually watch Ranger games that don't have ties to the Dallas area (South Korea perhaps)? Probably more so than the Stars (Finland I know). The Stars and Mavs take up the same period on the calendar and are further from being a sell-able product at this point so from the marketing of HDNet stand point, the Rangers are the no brainer.
5. Why does News Corp care? Fox Sports Net has a business model that includes leveraging local programming to promote national shows like the Final Score and Best Damn... This requires an investment in buying the local rights to the local teams to drive viewers to cable. The games become lead ins for the local sports reports which then lead in to the national sports reports. The investment it takes to essentially corner the market in every region is immense. What I suspect happens is the profits in the big markets help pay to corner the local team broadcast rights for the smaller markets.
Fox Sports Net (FSN) is aggressively buying local sports rights to MLB games but is getting significant competition against Comcast Sports Network (CSN). If the big markets stop using Fox Sports Net to broadcast their games, there might not be enough money to continue to control the monopoly on the smaller to mid-sized regions.
For instance, New York doesn't have a Fox Sports Net per se. Fox Sports Net co-owns MSG network which broadcasts the games of the Knicks, Rangers, Sabres, Liberty, and Red Bulls. Not exactly the foothold that you're looking for in the number one media market. FSN owns the number two media market in LA. But the number three market, Chicgao, is a complete shutout. FSN Chicago closed down because it couldn't keep up with WGN. The number four market of Philadelphia is also a shutout thanks to CSN. Now the number five market, Dallas, might also be slipping away if Cuban buys the team and decides to move the Mavericks and Rangers to HDNet. At that point, the Stars would be the only pro sports team broadcasting on FSN. Would FSN abandon Dallas like Philadelphia and Chicago if it only had Big 12-2 and the Stars. I don't think FSN wants to find out.
6. Would a Dallas regional network on HDNet broadcast nationally be good for the Rangers? I think this would be a huge success for the Mavericks and the Rangers. Cuban has really built the brand of the Mavericks (despite not winning a championship) and I think he would do the same for the Rangers. The launching of the YES network and the Big 10+2 network turned out to be game changers. I would expect (hope) that would be the case if HDNet became the Dallas equivalent. I would actually expect Cuban to launch HDSports that would have Maverick games, Ranger games, MMA fights, maybe Stars games, and a Cowboys magazine show all being broadcast to a national audience. That kind of exposure could launch the teams worldwide and allow the Rangers to compete for foreign free agents (prospects from Latin America and Asia) against the Yankees or Red Sox.
Again, I don't know if this is Cuban's plan, but the paranoia of FSN and Cuban's past dealings with sports lead be to believe this is the case. I think it would be very good for the Rangers and Dallas in general.
But Mr. Cuban said in an email Sunday that he doubts he would start his own regional network if he won the bid for the team.
If this is true, then my main reason for wanting Mark Cuban as an owner goes away.