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Wednesday, January 23, 2013

Biz of Baseball: Dodgers Set to Announce $6-$7 Billion TV Deal on Thursday

Maury adds…:You wonder if they do Punk’d on Frank McCourt.

On Thursday, the Los Angeles Dodgers and Time Warner Cable will announce a new television contract that will have the team starting its own channel. While terms will not be officially released, it has been known for some time that the Los Angeles NL club would pull in $6 billion to $7 billion making it by far the most lucrative local broadcast deal that has ever been reached in baseball.

What makes the deal even more amazing is that TWC had already inked a $4 billion broadcast deal that sees the Los Angeles Lakers at the heart of the programming. All told, TWC will be committing between $10-$11 billion to two Southern California franchises.

For the Dodgers, the effects are already being felt. While the club saw a 2012 end of year payroll of $129,080,186, ranking them 8th out of the 30 clubs, they have already planned to go into “Yankee territory” for 2013. In interviewing Dodgers President Stan Kasten at the Winter Meetings he said that there was “a good chance” that they would break the Luxury Tax threshold adding, “We’re not done yet.”

What’s interesting is how revenue-sharing could possibly be capped, something that MLB was very concerned about when the Dodgers were looking at the deal prior. According to the LA Times, that issue opened the door for TWC:

The Dodgers’ current contract with Fox Sports expires after the 2013 season. The team had discussed a new deal with Fox last fall, worth at least $6 billion over 25 years. However, as MLB and the Dodgers debated how much of that money would have to be contributed to baseball’s revenue-sharing program, the Fox exclusive negotiating window expired, enabling Time Warner to initiate negotiations with the team.

Fox was believed to be willing to restructure its offer but was not believed to be willing to significantly raise the amount. The Time Warner Cable deal is believed to be worth between $6 billion and $7 billion.

Repoz Posted: January 23, 2013 at 11:22 PM | 8 comment(s) Login to Bookmark
  Tags: business, dodgers

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   1. LA Podcasting Hombre of Anaheim Posted: January 24, 2013 at 12:20 AM (#4353827)
Man, that's a lot of zeros.
   2. Belfry Bob Posted: January 24, 2013 at 01:30 AM (#4353833)
...and this is really a good deal for Time Warner? (Speaking as someone who hasn't watched an ad on a baseball game broadcast in 6-7 years...)
   3. Tripon Posted: January 24, 2013 at 01:48 AM (#4353837)
Time Warner wants market share. This is a surefire way to get market share.
   4. BeanoCook Posted: January 24, 2013 at 02:16 AM (#4353842)
MLB will pass the NFL in revenue in about 2-4 years. I wonder how this will be spun.
   5. franklloyd Posted: January 24, 2013 at 03:23 AM (#4353848)
Gee, it's about time MLB revenues exceed NFL revenues...they only play TEN TIMES as many games!
   6. BeanoCook Posted: January 25, 2013 at 05:58 AM (#4354702)
#5 answers the question. Baseball is a superior business model, that's not in doubt.
   7. RB in NYC (Now Semi-Retired from BBTF) Posted: January 25, 2013 at 09:47 AM (#4354771)
...and this is really a good deal for Time Warner? (Speaking as someone who hasn't watched an ad on a baseball game broadcast in 6-7 years...)
I think you represent an exception in that department. I almost never watch ads on non-live programming anymore, but I don't want to watch baseball or whatever on delay, so that ends up being viewed live--ads and all.
   8. puck Posted: January 25, 2013 at 10:18 AM (#4354789)
A few people I know DVR their NFL games. They start watching a bit late and fast fwd through ads and supposedly even some of the downtime between plays until they catch up some time in the 4th quarter. It's probably still a tiny majority, but I was surprised I knew even a few people who do that.

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