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According to Volchok, surveys indicate that the Sonics might realistically expect some 25,000 of Seattle's cable subscribers to buy the TV season ticket. That comes to a cool $3 million—not counting live gate proceeds, which last season totaled about $7 million.
Whatever happens, the Sonics' scheme is the first truly revolutionary step taken by a major team into the new environment of pay TV sport. The mind behind it all belongs to Sam Schulman, 71, chairman of the Sonics. He also is a partner in Schulman-Levin Productions, a Los Angeles-based motion-picture distribution company. "I've been thinking about pay television for many, many years," says Schulman, "but we had only been offered nominal amounts—so many pennies per game. For that kind of money, I thought I'd be prostituting my software." (When a sports entrepreneur talks about his software, he means the games played by his team.)
The first year, season tickets to Schulman's SuperSonic software will be good for cable only, but he sees over-the-air subscription television generating many more big bucks in the future. "In a couple of years," says Schulman, "we'll go on STV to reach those who don't have cable, and that will open up another 1,200,000 households. With any luck, over the next five years we could have 250,000 to 300,000 season subscribers, and when that day arrives, we can foresee taking in $30 to $35 million a year just from our channels."
Here again are those astronomical figures that sports entrepreneurs love to fling around whenever they discuss the potential of cable and pay TV. Are they real? Obviously, no one knows. But one factor in Schulman's Seattle operation that differs from most other existing cable or pay TV packages in sport is that he controls both the medium and the money. "This is an entrepreneurial approach rather than the accepted traditional concept of selling your software to a cable company for pennies," says Schulman. "We believe the huge profits forthcoming if our concept is viable should rest with us as long as we are willing to take the financial gamble with our own channel, our own production, sales, billing and the rest. It is our risk and therefore our gain."
But what of the rest of the NBA? There is no sharing among clubs of local TV revenues. A national CBS-TV package does guarantee each team roughly $1 million, but owners like Schulman see no reason why they should divide their spoils with anyone else—no matter how such inequities may damage the league. "If I'm successful, naturally I'll fight any plan for sharing," he says.
Schulman's brand of local opportunism is anathema to the share-alike purists of sport. The NFL's Klein is furious about the SuperSonic experiment. "What Seattle is doing in the area of pay TV is a disgrace to the NBA," he said. "It's totally adverse to the best interests of that sport. But Seattle can get away with it because the NBA isn't strong enough to stand up for the common interests of everyone."
True enough. But pro basketball is by no means the only sport facing the problem of owners who are less than selfless when it comes to dividing TV revenue. For example, Tom Villante, director of marketing and broadcasting for major league baseball, is concerned about potential TV problems facing his game. "I'm afraid in the short term there'll be a big increase in the gap between the haves and have-nots," he says. "Population used to be the governing factor in the success of ball clubs. The more you could draw from, the more money you made. Over-the-air TV evened out the population differences to some extent, but now with pay cable, we're right back to population. Owners in big cities can make a mint. But those in places like Kansas City, Milwaukee and Minneapolis have big problems.
"Some baseball towns have no cable TV at all. Others are saturated. And the gap will get larger in the next five years. It would be O.K. if all the extra money the big-city teams make is allowed to fall to the bottom line as pure profit. But if that extra revenue is used to gobble up all the talent around, then the imbalance among teams becomes worse and worse."
Is there a cure for baseball's potential inequities? Villante isn't particularly optimistic. "Sanity has a lot to do with it, self-control, self-discipline," he says. "I don't think baseball would go to across-the-board revenue sharing. It might be done with new dollars—sharing new pay TV revenue at every level. But it would take a three-quarters vote of the owners. I don't see any major change in the offing. The best thing would be if we could somehow start over. Reorganize and give each club, say, six million wired homes. Put them all on an equal footing at the start. Let the best marketing make the most money. Let the smartest guys finish first, not just the richest. These days too much is done on 'wallet wisdom.' The inequities are built in. I'm afraid they're going to get worse."
Eddie Einhorn, 45, the new president of the Chicago White Sox, is determined to overthrow all inequities—economic and otherwise—that have plagued his struggling club for many years. A former executive producer at CBS Sports and founder of the TVS network, which he sold to Corinthian Broadcasting for $5 million in 1973, he is considered one of the sharpest TV minds in sports ownership today.