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Thursday, September 27, 2012

Bloomberg: L.A. Dodgers Secret TV Deal With MLB Fuels Spending Spree

You get a Carl Crawford! And you get a Carl Crawford! And you get a Carl Crawford!

A settlement ending their 2011 battle in U.S. Bankruptcy Court gives the Dodgers’ new owners a chance to cap income subject to revenue-sharing from a proposed regional sports network at about $84 million a year, according to five people familiar with the confidential “special terms.” With TV sports-rights experts saying the team could get as much as $225 million a year from a network’s rights fees, the Dodgers may enjoy an annual unshared windfall of as much as $141 million.

The “special terms” help explain the Dodgers’ improved finances since emerging from bankruptcy in April by being sold to a group led by Guggenheim Partners for $2.15 billion. That sum was almost twice the record price for a U.S. sports team, and the new owners have been acquiring stars such as infielders Adrian Gonzalez and Hanley Ramirez, committing more than $400 million to multiyear contracts.

“It’s an incredibly great deal for the new ownership that was obviously a factor in the amount of money they were willing to pay,” said Michael Cramer, who handled TV rights while president of the Texas Rangers and now heads a University of Texas sports and media studies program. “Any team in the league would say, ‘Can I have that?’ It’s going to create a lot of owners saying, ‘Where’s mine?”’

RoyalsRetro (AG#1F) Posted: September 27, 2012 at 03:23 PM | 12 comment(s) Login to Bookmark
  Tags: dodgers, media, revenue sharing, spending spree, tv contracts

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   1. Walt Davis Posted: September 27, 2012 at 05:29 PM (#4247545)
Having Frank McCourt drive you into bankruptcy is the new market inefficiency!
   2. fra paolo Posted: September 27, 2012 at 06:07 PM (#4247583)
Taken altogether, the settlement terms suggest MLB was so eager to get McCourt out as owner and to avert an open-court airing of charges he’d leveled against Selig in filings that it made significant concessions, said Phoenix bankruptcy attorney Thomas Salerno.... Manfred said MLB’s decision to settle was motivated solely by its desire to bring about a transfer of Dodgers ownership quickly.
So Manfred didn't exactly outright deny Salerno's suggestion.

Really, this whole McCourt era was a huge mistake, and apparently driven by the dreadful Rupert Murdoch:
Selig bowed to pressure from seller News Corp. to approve McCourt, who, unlike some other potential bidders, had agreed to extend the Dodgers broadcast contract with Fox Sports for 10 years...
   3. Joyful Calculus Instructor Posted: September 27, 2012 at 07:47 PM (#4247640)
Still doesn't justify taking on Crawford's contract.
   4. Gold Star - just Gold Star Posted: September 27, 2012 at 07:57 PM (#4247646)
I used to think Selig wanted McCourt in LA as to have a bad owner in a major market. Gives the others a chance, ya know. Like Milwaukee.

Now I think Selig realized how much money MLB was leaving on the table due to McCourt, and so did everything possible to get deep pockets into the owner's box at Chavez Ravine.
   5. dr. scott Posted: September 27, 2012 at 09:20 PM (#4247690)
Nice point gold Star. He was just waiting for SF to get out of the post Bonds funk before intorducing too much competition.
   6. Infinite Yost (Voxter) Posted: September 27, 2012 at 09:38 PM (#4247699)
>Now I think Selig realized how much money MLB was leaving on the table due to McCourt, and so did everything possible to get deep pockets into the owner's box at Chavez Ravine.

I had similar thoughts, in pretty much the same order. I think it was probably the lucrative nature of the NY-Boston rivalry that tipped him off.
   7. Gold Star - just Gold Star Posted: September 27, 2012 at 10:03 PM (#4247720)
If the Dodgers have a $141 million head start on everyone else every freaking year, no wonder Magic & Co. have a money-is-no-object vibe.

Yet if MLB's thinking is rising tide lifts all boats, then if you're SF or AZ or SD you know this LA ownership - willing to exploit a major market to the hilt - will be good for your bottom line. So maybe you don't ##### too loud over the subsidy.
   8. The Yankee Clapper Posted: September 27, 2012 at 11:12 PM (#4247759)
Can't see why a period of poor ownership (with excessive unrelated spending & the owners divorce) leading to bankruptcy should give the new owners a competitive advantage over the better run teams that played by the rules. Doesn't sound like the owners approved this dodge, and I'm not so sure Seligula has the power to favor one team over all others (unless it is the Brewers).
   9. Tripon Posted: September 27, 2012 at 11:33 PM (#4247787)
Its not that the Dodgers have a $141 million advantage. Teams like the Red Sox Cubs, or Yankees could already do this with a RSN. If anything, it just gives the Dodgers more options.
   10. Matt Clement of Alexandria Posted: September 27, 2012 at 11:37 PM (#4247790)
I used to think Selig wanted McCourt in LA as to have a bad owner in a major market.
Why imagine double-bankshot theories when simple near-term greed, sprinkled with incompetence and cronyism, explains everything perfectly well.
   11. Tripon Posted: September 27, 2012 at 11:40 PM (#4247793)
That conspiracy theory assumes that Selig thought he could control McCourt like the other owners, and that is clearly wasn't the case.
   12. Walt Davis Posted: September 28, 2012 at 06:08 AM (#4247861)
If the Dodgers have a $141 million head start on everyone else every freaking year, no wonder Magic & Co. have a money-is-no-object vibe.

It's not a $141 M head start, they aren't paying "taxes" on that $141 M. I have no idea how much they would put into revenue sharing from that money but it can't be a huge percentage.

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