For as much as this sounds like a lot of money I wonder how it will look in 10 years or so. Long term deals have tended to favor the buyer more than the seller in baseball so far.

IIRC the Dodgers are one of the last teams to be signing one of these long term deals. Compared to what other teams have gotten they are doing well. The first 15 years of this deal should be a significant competitive advantage for them. It is the last ten years when others are rolling into new contracts that the Dodgers advantage will shrink.

Phillies are up for renewal after the 2015 season, Cubs have a partial slate up for renewal after 2014 and the rest after 2019. Mariners can renegotiate a deal in 2015, Detroit's contract is up after 2015 I believe, Cardinals contract is up after 2017, and both the Orioles and Nationals will be getting a "reset" in their TV deals. There are plenty of teams that will still be signing new TV contracts over the next 5 years or so.

What I don't get is why didn't they buy the Dodgers in the first place if they're going to make this kind of investment.

Wow, that seems high. Who are they bidding against? It's hard to imagine KCAL or someone bid $6 billion. Who else has the time to show all these games?

I imagine they were bidding against the possibility of the Dodgers creating their own RSN like NESN or YES.

What I don't get is why didn't they buy the Dodgers in the first place if they're going to make this kind of investment.

My only guess would be that it would be frowned upon if Fox owned the Dodgers and were forming TV partnerships with other teams.

They do realize that Vin Scully won't last all 25 years?

I imagine they were bidding against the possibility of the Dodgers creating their own RSN like NESN or YES.

Time-Warner Cable.

The reason these prices are getting so high is because of all of the RSN that currently exist. Which is also why these media companies are locking these teams up to long term deals. There is a TV war going on right now and the winners are sports teams.

If Time-Warner were to get the Dodgers they would have the Lakers and Dodgers on their channel which would for the most part cover their year round programming needs (plus they have the Sparks and Galaxy).

My only guess would be that it would be frowned upon if Fox owned the Dodgers and were forming TV partnerships with other teams.

There's speculation that Fox's long-term goal is to launch a nationwide sports network to rival ESPN. They couldn't own any teams under that scenario.

They do realize that Vin Scully won't last all 25 years?

I wouldn't bet on that.

FOX owning the Dodgers was exactly a hit the first time around. It's hard to get a sequel made in this town if the first one is that kind of flop.

Time-Warner Cable.

Yeah, that's the answer. I don't care about the Lakers so I forgot that this happened. I guess this price makes sense then. The Dodgers are second to the Lakers but it's a strong second.

There's speculation that Fox's long-term goal is to launch a nationwide sports network to rival ESPN. They couldn't own any teams under that scenario.

Really? Disney owned ESPN, the Angels, and Ducks for decades concurrently. They only sold the Angels and Ducks because they wanted to get out of the of the sports team business, not because they had to.

I wouldn't bet on that.

Robo Vin will be ready.

Is Time Warner still negotiating with LA-area carriers? I remember stories about there being few deals done during the NBA pre-season.

The reason these prices are getting so high is because of all of the RSN that currently exist. Which is also why these media companies are locking these teams up to long term deals. There is a TV war going on right now and the winners are sports teams.

Is this creating a bubble? Maybe that helps make the back end of the long deal less of a concern for the Dodgers.

Robo Vin will be ready.

'will'? What do you think happened to that robot in Twilight Zone episode, "The Mighty Casey"?

McCourt was willing to give FOX 17 years for $2.5B. What a difference a little leverage makes. I guess Bud had the "long term interests of the team" correct in that instance. The Dodgers have now resumed their #1 status in the LA market.

There's speculation that Fox's long-term goal is to launch a nationwide sports network to rival ESPN. They couldn't own any teams under that scenario.

I realize "nationwide Canada" isn't quite the same as "nationwide America" but the Jays are owned by a national sports channel (or the company that runs one).

Is there a legal issue in the States that would make this infeasible?

Is Time Warner still negotiating with LA-area carriers? I remember stories about there being few deals done during the NBA pre-season.

They got most of the big ones, Direct TV for instance was the last holdout and they signed a few weeks ago.

Well, there's still DISH, but nobody cares about DISH.

FOX can sell close to $20m in ads per Dodger game, even in May and in bad seasons? Count me skeptical, I will believe this number only when officially announced, and even then, I'll bet it's inflated for PR reasons and filled with out clauses and the reported number pumped up by highly conditional payments.

KT, keep in mind that having the Dodgers (and their rival NOT having both the Dodgers and Lakers) means that FSN will be carried everywhere in the greater LA area, probably for a premium payout to Fox, too. If Time Warner had gotten the Dodgers, Fox would have risked their channel not being carried in every household, and certainly would not have gotten anywhere near as much per household from the cable carriers. It wouldn't surprise me if they estimated that value to be between $50-$100 million a year right there. Add in the extra advertising revenues from both the Dodgers and from everything else (since they would be carried more broadly) and this figure doesn't surprise me - especially if it's backloaded, as it almost certainly is.

I vaguely remember that when ESPN had the Ducks and Angels, there was discussion of them opening an "ESPN West" channel. Nothing ever came of it, to the best of my knowledge.

They do realize that Vin Scully won't last all 25 years?

Please, this is Hollywood. People won't even notice the difference when CGI Vin takes over.

It will be interesting to see how much the Dodgers will be getting in the early years of this deal. One of the most underreported and under-discussed aspects of the Dodgers sale was the agreement Selig cut with McCourt that kept Selig off the stand in Delaware. From the very little that has been reported, the agreement allows the new owners of the Dodgers to count only $80M (?) per year of its TV money for revenue-sharing purposes. If true, and if the new deal averages out to $280M, there's probably going to be an insurrection among the other MLB owners.

Whoa, that sounds like an important issue.

Local TV money being basically the only thing that should rightfully be subject to revenue sharing as it is based on actual market size rather than fantasy "market" size where Toronto is smaller than St. Louis, I would agree with that insurrection.

Local TV money being basically the only thing that should rightfully be subject to revenue sharing...

I recall Bill James proposing the same, about 15 years ago.

I see no reason why tickets, sponsorships, and stadium revenue shouldn't be shared. If you aren't allowing other teams to setup shop in your market then it is only reasonable for you to share the revenue you make from that market.

I guess. Since the Yankees are the top-drawing road team in the league I suppose other teams should be paying the Yankees a premium for boosting their attendance and associated revenues.

I guess. Since the Yankees are the top-drawing road team in the league I suppose other teams should be paying the Yankees a premium for boosting their attendance and associated revenues.

I've long thought that teams that draw well on the road should get a higher % of shared revenue. It helps create businesses that are interested in building strong national fanbases. Now of course I've also long believed that if a team doesn't want to share a market and won't let other teams move into their market either through relocation, expansion, or broadcasting into their territory they should have to pay for that privilege. I'm guessing the amount of money that a team like the Yankees make because they only have to share NYC and the surrounding areas with the Mets greatly exceeds any of the money they might make by getting a larger split of the home team's gate when they are traveling.

Now of course I've also long believed that if a team doesn't want to share a market and won't let other teams move into their market either through relocation, expansion, or broadcasting into their territory they should have to pay for that privilege.

And which teams would those be? Let's hold their collective feet to the fire.

And which teams would those be? Let's hold their collective feet to the fire.

I believe it is all of them.

Oh. Well. So it sounds like a problem that solves itself. Everyone gets a fiefdom.

Oh. Well. So it sounds like a problem that solves itself. Everyone gets a fiefdom.

Not all fiefdoms are created equal. If you don't want the earl from the neighboring valley to raid your valley you come to an understanding. Either that or you kill him. I don't think the Yankees are interested in killing the Rays.

Now I remember: James proposed teams get to keep the first 50% of their local TV rights, with the second half subject to revenue sharing.

Am I the only person who thinks 25 years is an eternity for a television deal? Why would we be consuming baseball video the same way in 25 years as we do now?

#21--the big dollars are in cable fees, not ads. $5/month, and escalating steadily, is not a bad guess.

Not all fiefdoms are created equal. If you don't want the earl from the neighboring valley to raid your valley you come to an understanding.

So who wants to relinquish their right to an exclusive fiefdom in order to compete directly against their rivals? How much is Jeffrey Loria willing to pay David Glass not to swoop down into his top-10 market? He's willing to pay for that exclusive fiefdom, right?

I don't think the Yankees are interested in killing the Rays.

Well the Rays are being artifically constrained from moving down into the much larger Miami market. How much is Loria paying them to keep them away?

Is this the argument that somehow favors the Yankees and helps show how the Yankees are being unfairly treated?

As of April the average RSN affiliate fee was $2.28. For sports programming ESPN had the highest fees at $4.69. NFL is at .87 and MLB is at .25. DirecTV pays $3.40 for LA's Time Warner Cable SportsNet.

More recent data from the same source as April's data:

"Disney's rivals are eyeing the lucrative $5.15 monthly subscription fee that ESPN can command for each customer, according to media consultant SNL Kagan, the highest among cable channels. Fox Sports North, the most lucrative of the 12 Fox regional sports channels tracked by SNL, collects $3.68 a month for each subscriber.

In new contract talks, Fox plans to negotiate higher carriage fees for YES, which currently charges $2.99 a month per subscriber, a source told Reuters."

Is this the argument that somehow favors the Yankees and helps show how the Yankees are being unfairly treated?

ya, YR hates revenue sharing. but now that the dodgers are going to be overspending, he won't have to feel like the yankees are MLB's whipping boys.

i guess if i understood this calculus i wouldn't be as poor as i am today, but it looks to me like the guggenheim people saw an opportunity that others didn't. los angeles is a huge city, with a huge economy and the dodgers just haven't exploited that in the same way the yankees have exploited NY. what no one noticed when it was happening was that frank mccourt was really kind of a fake and didn't have the money or the savvy to turn the dodgers into the kind of dominant franchise that the o'malleys did.

now suddenly guggenheim is acting like the yankees, committing to a huge payroll in the hopes that by doing so they'll have a winner and the fans will flock to the stadium and the TV rights will become precious. they may have miscalculated in this year's big trades, but there's nothing stopping them from trying again if they hit the jackpot on this tv deal. they've gotten lucky in that time warner grabbed the lakers, but maybe they saw this coming and they are making their own luck.

the only fly in the ointment was mentioned earlier, namely the length of the contract. 25 yrs does seem like a lot of time. alot can go wrong for the seller.

i guess if i understood this calculus i wouldn't be as poor as i am today, but it looks to me like the guggenheim people saw an opportunity that others didn't.

Perhaps, but the guy who got YES up and running (Leo Hindery) was also in the Dodgers bidding, but he didn't come anywhere near the $2.15B paid by Guggenheim. The Guggenheim group has some smart people, but it seems like they mostly blew the other bidders out of the water because, unlike Hindery and Steve Cohen and Stan Kroenke, they were spending mostly other people's money rather than their own.

From the very little that has been reported, the agreement allows the new owners of the Dodgers to count only $80M (?) per year of its TV money for revenue-sharing purposes. If true, and if the new deal averages out to $280M, there's probably going to be an insurrection among the other MLB owners.

I don't see how Selig can dole out "exceptions" to the revenue sharing rules. Seems like Mr. & Mrs. Steinbrenner were penalized for not getting a messy divorce.

Selig doles out a ton of exceptions to the revenue sharing rules. The Yankees get to deduct their stadium from revenue sharing. Should the Ricketts be penalized because they didn't get a new stadium?

In new contract talks, Fox plans to negotiate higher carriage fees for YES, which currently charges $2.99 a month per subscriber, a source told Reuters."

OK, not sure if my demographic stats are totally correct, but let me take a stab at the math. Here are my assumptions.
- There are about 18M people living in the greater LA area.
- There are about 1 household per 3 people, so about 6M households.
- About 60% of households have cable, so about 3.6M potential subscribers.
- I'm also assuming that the sentence meant "higher carriage fees THAN YES" instead of "for", so let's guess $4 per month per subscriber.

That grosses $14M per month, or $156M a year just in the LA area with total coverage. Without counting carrying it in other areas such as San Diego and Phoenix that currently don't have professional baseball franchises (Zing!!!!). And without counting any advertising revenues Fox gets from the RSN.

I'm sure I'm way off on the actual potential, but it seems like $150M a year in revenues is really the bottom of what Fox can do now, and with inflation, obviously do much more per year over time. It still seems crazy to me, but not implausible. The crazy part is what has happened in the last few years to suddenly balloon the potential revenues this high, and why wasn't some of that reflected in deals done 3 or 4 years ago?

Your number of pay TV subscribers in Los Angeles is way low.

Time Warner: 2.3 million
DirecTV: 1.7 million
Cox: 1.2 million

Those are just the top 3 providers in the LA area. Dish, Charter, Verizon Fios, and AT&T Uverse are all sub 1 million individually, but collectively add up to another 2 million or so.

$4 a month is probably low too. The Lakers are getting nearly that much for 57 games a year. Speculating based on how much more money the Dodgers are getting for their TV rights that number is likely to be more like $6 a month.

- I'm also assuming that the sentence meant "higher carriage fees THAN YES" instead of "for", so let's guess $4 per month per subscriber.

No. Fox just bought 49% of YES and is now the largest shareholder. It's basically Fox Sports YES now.

...but now that the dodgers are going to be overspending, he won't have to feel like the yankees are MLB's whipping boys.

Ha! I'm taking the under.

$4 a month is probably low too. The Lakers are getting nearly that much for 57 games a year. Speculating based on how much more money the Dodgers are getting for their TV rights that number is likely to be more like $6 a month.

Not really. Time Warner is getting $3.40 and Fox Sports North is getting the most of all Fox RSN at $3.68. ESPN doesn't even get $6 a month and they get way more eyeballs than a RSN.

The LA RSN region is probably at something like 8 to 10 million subscribers. If all those subscribers have to pay you're looking at probably 25 to 30 million dollars a month in carriage fees. Now then it is entirely possible that all subscribers do not have to pay. It depends on what tier the RSN is on which has been part of the fight for several channels. If the RSN is on an optional tier then the RSN does not get a fee based on all subscribers but get fees from subscribers that opt in to the tier containing the RSN. I don't know how it works in LA but for me in DC I have an optional sports tier that costs me $10 a month and it contains the RSN and other sports channels.

but it seems like they mostly blew the other bidders out of the water because, unlike Hindery and Steve Cohen and Stan Kroenke, they were spending mostly other people's money rather than their own.

are you saying none of the guggenheim principals have invested any of their own money in the guggenheim entity? they have no skin in the game? i'd think they are investing other people's money along with their own money.

owning a baseball franchise has been historically a license to print money -- but that's just me, i don't believe for a minute any of the owners who poor mouth their financial state. the potential upside for L.A. is pretty big. i don't think anybody with money in the guggenheim partnership is going to be complaining if the deal gets made by tuesday.

Is this the argument that somehow favors the Yankees and helps show how the Yankees are being unfairly treated?

The Yankees get guaranteed revenue confiscation while the Lorias of the world get guaranteed revenue supplements, I don't see how that favors the Yankees in any form. It's just your basic "makers vs takers" argument, except here the "takers" are people like David Glass, who made a fortune depressing income for millions. Windfalls for me, but none for thee. Moral hazards, leads to dependence in the lower classes you know, Glass has been properly vetted for moral rectitude by virtue of the fact he's already rich.

Pity McCoy, I actually thought you're #29 was hinting at some frank honesty whereby teams could choose a protected fiefdom and forfeit this sort of perpetual welfare or choose the rugged individualism that has been the hallmark of American capitalism whenever such issues are discussed within earshot of the common slob and reap the rewards undoubtedly to come. If these heroes of capitalism can't hope to compete without massive wealth distribution then what hope do the sad 47%'ers have?