Tooting his own Einhorn
A question for the fans: As baseball enters its climactic month, is it time for White Sox President and pay-TV architect Eddie Einhorn to take a bow? Or should he hang down his head, now that he charges Chicago shut-ins $21.95 a month to see TV games they previously watched for free?
Aside from Einhorn, who thinks pay TV will be the salvation of the Sox, and former Sox announcer Harry Caray, who describes Einhorn's plan as "un-American," nobody knows for sure. The only certainty is this: Einhorn has embarked on a scheme that could make the White Sox both the gold mine and powerhouse of the American League West.
First, a quick peek at Eddie's resumé.
Cheeky, flamboyant, a street hustler and proud of it. Smart enough in the early 1960s to have rounded up the TV basketball rights to all the major college conferences, to have thereby founded the TVS sports network and to have later sold the pretty little package to Dun & Bradstreet for more than $5 million. Inventive enough as executive producer of CBS's Sports Spectacular to have lifted that show in the ratings even though it featured men racing while carrying refrigerators on their backs. As Eddie says, more honestly than arrogantly, "I'm always two years ahead of my time."
Now for some recent history about pay TV, which will land Einhorn in either the Baseball Hall of Fame or the Comiskey Park doghouse. As recently as 1980, one year before Einhorn and Chicago real estate syndicator Jerry Reinsdorf bought the club, the White Sox showed 140 of their games on conventional TV. Back then, Einhorn says, owner Bill Veeck was being paid the laughably low sum of $2,000 per game by a local VHF station for the telecast rights. "If 600 people didn't show up at a home game because they watched it on television, he [Veeck] lost money," Einhorn says.
Enter Eddie and his pay-TV blueprint. He swallowed hard and accepted the TV deal Veeck had just negotiated for 1981: a total of 60 Sox games on WGN for the still-deflated sum of $360,000. But he quickly began preaching an unusual message to owners of other teams in town. The gospel according to Einhorn: "Why keep trying to sell our rights to middlemen, often at fire-sale prices? Why not form our very own 365-nights-a-year network? We'll give fans quality, not quantity. Plus the whole will be greater than the sum of the parts."
The result was the debut last May of SportsVision, an over-the-air subscription television service that currently offers 60 Sox games, 56 Bulls games, 56 Black Hawks games and 28 games of the Chicago Sting. Boxing, tennis and AL games not involving the Sox fill out the schedule which covers every night of the year. A decoding box on each subscriber's set unscrambles the picture and sound. The basic fee? A tidy $21.95 per month, not to mention $52.95 for installation. (No, Alfred E. Neuman doesn't appear on the cover of the White Sox yearbook saying, "Cheap!")
Einhorn kept some 45 Sox games on conventional TV this year, but that number will shrink to a minimum of 30 next season when SportsVision shows 112 games. Thus, viewers will be lured to pay for what they always got for free. Some folks take umbrage at this, including Caray, who switched to the Cubs this year after 10 years of broadcasting freebies for the White Sox.
"To me, it's un-American," Caray says. "Baseball is a game that belongs to the people. The White Sox were dangling some big figures in front of me, but I got to thinking, 'Where is that guy who made me what I am today, that bartender and that shut-in and that cabdriver?' I got to thinking, 'Well, these guys aren't going to be able to afford listening to me.' "
"That's Neanderthal thinking," retorts Einhorn. "Nothing is free." No one, of course, forced Einhorn to buy the Sox. And Eddie hasn't yet been heard to say that if SportsVision strikes gold, he'll turn over half the profits to an orphanage. But he does make a logical—if not incontrovertible—point. If the White Sox don't develop another major source of revenue, the ball game's over. Gate, conventional TV and concessions won't finance a winner anymore.
"I tell 'em, 'Hey, if I didn't have to do this, if I could charge you two dollars to come to the ball park, put every game on free television, I would do it,' " Einhorn says. "We're not unlimited rich guys. You want to see my statement? Come see it. I lost three million dollars last year. I'm projected to lose another three million dollars this year. You want [Steve] Kemp? You want me to sign Kemp? You want [Greg] Luzinski? You want a team you can be proud of here, or you want the Cubs?"
In short, Einhorn wants Chicagoans to believe he's doing them a favor by selling them pay TV. Try this sales pitch on for chutzpah: "Compared to two years ago, a person can say they're paying for something they got for nothing.... But say we just stayed at the 60 White Sox games we had [on free TV] last year. Well, on SportsVision, you get 60-plus." Besides, Einhorn says, he's only copying the movie moguls. "They found out they could make money by moving the movie theater into your home and charging less than a dollar for you to see it. I'm doing the same thing. I'm taking the ball park and enlarging it."
"People say it's the wave of the future, but I don't really buy it," says Caray. "You don't think a guy's suddenly going to subscribe to this thing after the baseball season is over, do you?"
To date, Einhorn says, SportsVision has 20,000 subscribers—25,000 fewer than it needs to break even. In a town with the third-highest unemployment rate among major cities, sales have been less than phenomenal. But Eddie and his Sox do seem to be riding the crest of a big green wave. For one thing, he sells ads on his pay-TV games, milking the new technology for every baseball-loving cent. Unlike some other owners, he has resisted the quick-buck temptation of selling his rights to middlemen. And just as the Sox seem more competitive on the field, SportsVision is about to tap the cable market, which includes a potential 2.7 million subscribers in Illinois.
Say 15% of those cable homes take the sports tier at an average of $7.50 a month. That would bring in $36.4 million, of which 45% of the net would go to the White Sox, who provide approximately 44% of the programming. By the late 1980s, three million more homes in Chicago proper are scheduled to receive cable. The club's annual take then would rise to $27 million, $6.5 million more than Einhorn and Reinsdorf paid for the entire franchise.
So how about Eddie? Hero or villain?
The guess here is that he's entitled to take his bow, if only for being the shrewdest operator in both leagues. A Mother Teresa come to bring charity to the poor, he's not. But an extra $27 million a year should buy a lot of home runs from a lot of Luzinskis.
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