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Monday, January 28, 2013

ESPN LA: Dodgers launching sports TV network

The Los Angeles Dodgers announced Monday their plans to launch a regional sports network funded almost entirely by Time Warner Cable, a scenario one baseball source says is exactly the type of deal MLB had feared: A team setting up a shell company of sorts in order to pay less in revenue sharing.

The new ownership group, which bought the team out of bankruptcy court in April 2012 for a record $2.1 billion, said it has created a company called American Media Productions that will start broadcasting Dodgers games in 2014 on a channel called SportsNet LA. Time Warner Cable, the largest carrier in the area, will be the network’s first distributor.

MLB’s revenue-sharing rules allow teams to start their own broadcast networks and to keep anything above and beyond the fair-market value of the TV rights (set at $84 million per year for the Dodgers plus a 4% boost per year during the bankruptcy court negotiations), provided that the team is assuming significant risk in starting the network. This deal is structured in a way that essentially places all of the risk on TWC, with the Dodgers themselves assuming almost none - so the question to be resolved is whether and to what extent the additional revenue from the contract (reportedly $7 billion over 25 years) must be shared.

Mike Emeigh Posted: January 28, 2013 at 12:34 PM | 3 comment(s) Login to Bookmark
  Tags: business, la dodgers

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   1. phredbird Posted: January 28, 2013 at 01:52 PM (#4356619)
huh, guess the guggenheim guys are going to test MLB on the revenue sharing part. they must think they've got some kind of solid case. but if the article is correct, and the dodgers are not assuming a large financial risk in setting up the network, they could be on the hook for more than the stipulated $84 mil a year bar that the bankruptcy court set.

btw, a lot of salary comes off their books after 2013. is there any chance they might fly under the luxury tax radar after 2013 or have they committed to too much?
   2. The Yankee Clapper Posted: January 28, 2013 at 05:39 PM (#4356915)
Trying to stiff MLB and the so-called "small market" owners of their rightful revenue sharing windfall? Shame!

Where is the outrage?
   3. phredbird Posted: January 28, 2013 at 06:44 PM (#4356951)
i take back what i said. looking on spotrac, dodgers payroll in 2014 is well over 190 mil -- they are still paying andruw jones 3 mil -- and that doesn't count clayton kershaw. he'll be arb eligible.

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