$425 million per year? I highly doubt that, even in the last year of the contract.

But then again the Dodgers sold for about a billion more than I thought they would.

explosive increase in their local/regional TV revenues when their current deal expires in 2013 that could reach as high as $8.5 billion over the next 20 years.

$425M p.a.?!?! I'm calling BS puffery on that. Unless you're expecting inflation to average 12% over that period.

I think $200M p.a. would have to be the high end. Still, a phenomenal amount of revenue.

Wildly optimistic projections of future growth and revenues. What could possibly go wrong?

No wonder Vin's coming back. A dude wants to get paid!

These new TV deals are incredible, but one has to wonder if the current TV model will remain in effect long enough for the teams to collect all of these billions. Right now, some teams are making tens of millions of dollars every year from cable TV subscribers who don't even watch baseball. That model seems unlikely to continue for 20 more years.

EDIT: Beaten by Joey B.

I think the key word in there is "could". I wouldn't doubt the contract could be this outrageous amount but it would require a series of incentives and markers be reached that are about as likely to be reached as Vin Scully is to be broadcasting the games in 2032.

Feels like there's a tv rights bubble, no? I know these networks are starved for content, but can they really make up all the cash their laying out?

edit: cokes for all!

but it would require a series of incentives and markers be reached that are about as likely to be reached as Vin Scully is to be broadcasting the games in 2032.

Hey, bite your tongue.

Not. Gonna. Happen.

The Dodgers will use the money to create Robo-Vin, who will be able to call Dodgers games for milennia even when Vin leaves the booth.

I wonder to what extent that revenue actually depends on Vin. Not that they think he's still going to be calling games 20 years from now, but I wonder how much extra revenue he brings in per year compared to a normal broadcast team.

How fricking awesome is it that one of the guys who called Larsen's perfect game is still an active announcer?

The Dodgers will use the money to create Robo-Vin, who will be able to call Dodgers games for milennia even when Vin leaves the booth.

I have long called for the NFL on FOX to fire Joe Buck and replace him with the canned dialogue from Pat Summerall in the John Madden video games.

they are putting everything on 2013.

look at the chart at the end of the article. by 2014, almost all the money they will have in guaranteed contracts is tied up in the regulars and SP -- to me the worst-looking one is ethier at $15.5 mil. kershaw is arb eligible so that will be a big bump. but the guaranteed payroll shrinks to $150 mil. (there is an adding error if i'm not mistaken) and so by then they could be filling out the roster with youngsters at league minimum.

obviously, best case scenario is winning a pennant or WS in 2013 and sitting back and letting the dough roll in on the new tv contract and high attendance from fan goodwill.

but even with worst case, their financial commitments really are going away. they'll even be finished paying manny ramirez.

i guess they'll be throwing monopoly money at some other contract that will go bad between now and then, but the contours of what they are thinking show up in that salary chart. if they can hold the line after 2013 and avoid another juan pierre or andruw jones, and the tv contract is even moderately successful, they just might make it.

LA is a ginormous market. the guggenheim guys are probably thinking they can behave more like the yanks and red sox than the dodgers have done previous. for sure, i'm not enough of a financial analyst to say if that's going to work out for them. lot of naysayers out here though.

These deals largely include streaming, which at the moment the content providers control. So YES, for example, gets paid by the Optimum Online customers who watch it on their mobile devices. Trust me, the cable companies are extemely aware of the possible futures of the broadcasting industry, particularly as it pertains to sports.

LA is a ginormous market. the guggenheim guys are probably thinking they can behave more like the yanks and red sox than the dodgers have done previous. for sure, i'm not enough of a financial analyst to say if that's going to work out for them. lot of naysayers out here though.

Like you I'm just another dumb fan, but I've long had a feeling that the Dodgers were getting a whole lot less out of their market and their brand than they could be. They've kind of been standing still while not only the Yankees and Red Sox, but the Giants and the Angels seem to have "gotten it" much more fully over the past 10-15 years.

Like you I'm just another dumb fan, but I've long had a feeling that the Dodgers were getting a whole lot less out of their market and their brand than they could be. They've kind of been standing still while not only the Yankees and Red Sox, but the Giants and the Angels seem to have "gotten it" much more fully over the past 10-15 years.

I agree with this. But there is a veritable ocean between where they are and where they would need to be to get an $8.5 billion/20 year TV deal in 2013. There is a ton of room to improve and still be far away from that.

My caveat in #1 still applies.

Like you I'm just another dumb fan, but I've long had a feeling that the Dodgers were getting a whole lot less out of their market and their brand than they could be. They've kind of been standing still while not only the Yankees and Red Sox, but the Giants and the Angels seem to have "gotten it" much more fully over the past 10-15 years.

No doubt about this, and it started long before McCourt. As much as it's sacrilegious to say it, the team's decline started under O'Malley in the late '80s. O'Malley ran the huge-market, no-debt Dodgers like a middle- or small-market team, which is why it's going to be very interesting to see how O'Malley & Co. operate the small-market, (presumably) big-debt* Padres.


(* I haven't seen a detailed analysis of the Padres sale, but I haven't seen anyone call it an all-cash deal.)

Even if the Dodgers have all the money in the world, bad contracts are still bad contracts.

If Crawford doesn't bounce back, they're commited to a bad player at a prime position for five years. Thats awful even if they can afford the overpay.

That's not a bad point, Joe. Accounting for collusion, they did sign Darryl Strawberry to a big deal, but Fred Claire was no Al Campanis as a GM.

You guys are focusing on the wrong number. $4.5B/20 yrs is sited as the high end of the deal; sure it's a huge number, but the "expert" (the company who negotiated the new Lakers' TV contract, so they should know what they're talking about) does see it as possible.

No, the telling number is the minimum - $175M/yr, which should be plenty to allow the Dodgers to spend like the AL East, West.

Feels like there's a tv rights bubble, no? I know these networks are starved for content, but can they really make up all the cash their laying out?

The fact that sports are one of the few forms of relatively DVR-proof programming is pretty huge in the current-and-future TV landscape.

The fact that sports are one of the few forms of relatively DVR-proof programming is pretty huge in the current-and-future TV landscape.

So is the ability to charge millions of people a monthly fee for programming they don't watch, which means Dodgers and Yankees fans are essentially subsidized by millions of non-Dodgers and Yankees fans. Live sports might be keeping a lot of people from "cutting the cord," but I wouldn't bet this same model will exist for decades to come.

I wonder what the numbers look like under the hood — e.g., for every non-Dodgers fan who would like to save the $3/mo. on his or her cable bill, is there someone else willing to pay $6/mo.?

As long as their profits are guaranteed, maybe the Dodgers can trade for the rest of Bobby Bonilla's Met contract.

As long as their profits are guaranteed, maybe the Dodgers can trade for the rest of Bobby Bonilla's Met contract.

C'mon, no one said they'd have that much money.

Trust me, the cable companies are extemely aware of the possible futures of the broadcasting industry, particularly as it pertains to sports.

school me here. is this something that gives the cable/tv/whatever people leverage against the dodgers in negotiations or is it the other way around or what?

If Crawford doesn't bounce back, they're commited to a bad player at a prime position for five years.

ugh, silly me, i overlooked that one.

I don't know who has the leverage in the negotiating room (and don't know if it's a binary, knowable thing). But I know there are departments of "strategic planners" in the content provider community that think a ton about "cord-cutters" and pore over the numbers every day. In this thread, it was kind of being characterized as "We smart Internet users can see things that the dinosaur cablers have missed", and while that's a possibility, I wouldn't gamble on it.

If I personally knew the way that this would be monetized, I wouldn't be sitting at work after 9PM watching baseball and participating in Internet discussions.

Also, just personally, I would not have gone HD if YES didn't broadcast in it. I love seeing the Yankees on my big screen and listing to them over my home theater speaker system, in which the crowd sounds like they're all around me. Sports programming is just different.

In this thread, it was kind of being characterized as "We smart Internet users can see things that the dinosaur cablers have missed", and while that's a possibility, I wouldn't gamble on it.

It's not that it doesn't make sense in absolute dollars, it's that it's such a radical departure from cable contracts as they exist now that it seems incredibly unlikely.

DTM, there are teams of smart people motivated by the most basic motivators available - preventing the slow death of their industry and their jobs. I don't know what solution they'll arrive at - if any - but my money's (literally) on their ability to do so.

DTM, there are teams of smart people motivated by the most basic motivators available - preventing the slow death of their industry and their jobs. I don't know what solution they'll arrive at - if any - but my money's (literally) on their ability to do so.

Just like the phone companies, right?

The cable companies have never, ever, EVER been quick to react to anything. I suspect that maybe some providers are being forward-thinking in their conference rooms, but I doubt the majority have anything remotely resembling an effective plan for when cable lines go the way of analog phone lines.

If Crawford doesn't bounce back, they're commited to a bad player at a prime position for five years. Thats awful even if they can afford the overpay.

The Dodgers are only committed to pay Crawford not play him. This situation will evolve into a pop quiz for the FO: Does it understand sunk costs?

What's the MLB record for the most money eaten on a contract? Would be an interesting chart...

Let's not conflate cable providers like Cox and Comcast and content companies like E5PN and YES. It is absolutely not a good time to be in the cable providing business; they have lots of challenges from all over the place. And they're dinosaurs - massive and inflexible, presiding over a giant infrastructure with fixed costs and a fleeing audience. But it's a good time to be in the content business. Regardless of how people choose to consume it, they still want your product, and will still pay for it.

*EDIT*

The cable providers spent the last twenty years of the twentieth century and the first ten years of the 21st with a virtual monopoly. The industry was a license to print money, and they treated their customers really badly. They absolutely deserve what they're going through.

The Dodgers are only committed to pay Crawford not play him. This situation will evolve into a pop quiz for the FO: Does it understand sunk costs?

Yes there's two ways the Dodgers really lose the trade:

1) They play a bad player because they're paying him.
2) Their deal limits their spending in a future year in a way that impacts the team.

#1 is unknown.

#2 is taken for granted to be true but is unknown. If the Dodgers have approval for a payroll up to $300 million or something ridiculous, then the trade won't cost them a single win down the road. So if it gains them wins (and they don't give them back by failing on #1) then obviously it's a great trade for them, even if they fail miserably to spend efficiently.

And if they really break the salary threshold, it will of course drive up the cost of prospective free agents, which will make earlier deals look not nearly as bad.

I'll say this again. Future costs cannot be sunk costs. The Dodgers have about $500 of sunk cost in Crawford right now. It's always amusing when people question whether front offices understand sunk costs when they themselves don't understand sunk costs.

Let's not conflate cable providers like Cox and Comcast and content companies like E5PN and YES. It is absolutely not a good time to be in the cable providing business; they have lots of challenges from all over the place. And they're dinosaurs - massive and inflexible, presiding over a giant infrastructure with fixed costs and a fleeing audience. But it's a good time to be in the content business. Regardless of how people choose to consume it, they still want your product, and will still pay for it.

Fair enough, but I think eventually even ESPN and YES might be in trouble. They make money because technology is being artificially constrained (e.g. I can't watch the Cubs using MLB.TV because I'm in Chicago*). But they are middle-men. All of the networks, etc. are middle-men.

Now, they provide a lot of money to the content creators. They're not going away soon. But eventually, like so many middle-men, I think they will either disappear or radically change.

*And yes I know it's possible to fool their blocks, but that's not really a mainstream solution.

What are "incurred future fixed costs" like Crawford's deal called, Mac?

Was Crawford's contract a sunk cost for Boston? It was not since they were able to not have to pay it. Future costs are not sunk costs. Plain and simple

You can't have already incurred a future cost.

That will be something, if this ownership group decides to plug every penny back into the team. Huge payroll, state-of-the-art stadium and surroundings*, innovative media contract, beefed-up international scouting... to create THE West Coast powerhouse.

Like, all these incredibly wealthy men decided, "We're rich enough to sacrifice any money - and we could make bank - for the ego trip of good seats and ringzzzzz."

* - The planning/development executive just hired by the Dodgers, from Baltimore, cut her teeth in Boston during the good times. Cue Simmons:

Our charming, broken-down, illogically constructed museum of a baseball park was overhauled and turned into a cash cow (same for the streets surrounding it).

That's nice to hear.

They make money because technology is being artificially constrained (e.g. I can't watch the Cubs using MLB.TV because I'm in Chicago*). But they are middle-men. All of the networks, etc. are middle-men.

The entities that require and enforce these Byzantine blackout restrictions are not the content providers, but the sport bodies themselves. If given the choice, MLB.TV wouldn't black out anyone, and neither would E5PN. MLB wants to sell the Yankees, for example, as many times as they can. But they know that viewership is a zero-sum game, as do the bidders. So they sell the rights to YES, who have an interest in not seeing this valuable content get put all over the other screens in their area; people won't watch the games on YES then. So MLB requires others to whom they sell the rights to black out their coverage, so that eyeballs don't leave YES and watch the game on E5PN or MLB.TV or whatever. This makes Yankee broadcast rights more valuable and more exclusive, and allows MLB to sell the same games multiple times (they get local money from YES; national money from E5PN, FOX, and others; streaming money from MLB.TV; and international broadcast rights from E5PN again).

Whether the content companies are middle-men is a matter of opinion. But I would say that the games would not be played without being produced/replayed/announced/graphics added in the twenty-first century. I regard the role of producing the games as essential to the sports landscape, and not particularly likely to be axed.

There has been talk for years about setting up an "a la carte" system where customers would pay for only the channels they want. The content providers balked. There is no way Disney would allow some households to just order all the ESPN channels while opting out of ABC/Disney channel.

Chances are, most of us are getting broadband through either their phone company or cable company. Its a symbiotic relationship between the content providers and cable providers because content makers can't make enough money on streaming/online/DVD sales. I wonder what the true cord-cutter numbers are.

Let's not conflate cable providers like Cox and Comcast and content companies like E5PN and YES. It is absolutely not a good time to be in the cable providing business; they have lots of challenges from all over the place. And they're dinosaurs - massive and inflexible, presiding over a giant infrastructure with fixed costs and a fleeing audience. But it's a good time to be in the content business. Regardless of how people choose to consume it, they still want your product, and will still pay for it.

Comcast is both content provider and cable company. Interestingly Comcast just bought more content (NBC/Universal) while Time Warner just spun off its cable business a couple years ago.

I wonder what the true cord-cutter numbers are.

I have not seen them in the last few weeks, but it's under 2% of households. Is it rising? Yes. Is that a concern? Yes.

I was without TV for 4 years. Only have it now because I need the internet and yet I still don't use cable tv. If I could get access to the internet for 30 or 40 dollars a month I'd do it.

What's the MLB record for the most money eaten on a contract?

At the time it was Russ Ortiz when he was released by the Dbacks in June 2006 with $22 million left on a contract that ran through 2008. This might have been surpassed since then, but I don't know by what.

Re the Dodgers and LA.
The Dodgers have been a huge grosser since the moved into Dodger stadium. Once upon a time they owned LA. The Dodgers were the first team to go over 3 million in attendance, the first team to hit 3 mil three years running, five years running and so on. From the sixties with Koufax and Drysdale through the Garvey seventies and, unless I'm wildly mistaken, even through much of the 80's the Dodgers led MLB in attendance pretty much every year. Toss in Vin, which gave them control of the airwaves and the fact the Angels were this choking team (Sorry, but for most of their history that's how the Angels were perceived)from Anaheim of all places, the Dodgers ruled LA like no other team in baseball.
Heck, despite being in different leagues,due to the 50's history and the Dodgers flight West, the Yankees/Dodgers rivalry was one of the hottest in baseball.

The Dodgers fall came slowly. First, and maybe most importantly, the Dodgers didn't play the free agent game in the O'Malley era. They've never thrown their money around like other teams do. They've traditionally been quite frugal, in part because O'Malley liked to keep salaries down and thus didn't want to set price ceilings. They ran on institutional arrogance that their seemingly endless farm systems would never run dry, and when they slowly tapered out and ran out in the late 80's the Dodgers had no plan B.

Plus O'Malley died, and the team went through a series of poor owners.
And worst of all, Arte Moreno, seeing a major market opportunity in the Dodger's decline bought up the Angels and almost immediately began battling for supremacy of LA.

But the Dodgers are the sleeping giant of MLB, no doubt about it.
Smart ownership, good marketing, tapping into the already existent fan base-yeah, the Dodgers could make Yankee level money. The NL should be very, very frightened.
(Which is good for baseball. Put a monolith in an oligopoly and all of a sudden all the other competitors have to step up their game or get squished-that's 100 level econ there)
And that's not even discussing the real estate around Dodger stadium...

Farm system tapering out in the late '80s seems an odd claim to make about a franchise that won ROY five consecutive years from 1992-96. Not to mention producing two first ballot HOFers in Pedro Martinez and Mike Piazza during that time.

Future costs are not sunk costs. Plain and simple

False.

for example

That article I believe is talking about expected sunk costs in the future. That's different and still not a "sunk cost". If you haven't spent the money it isn't a sunk cost.

Magic Johnson’s infectious passion

forgive me

Farm system tapering out in the late '80s seems an odd claim to make about a franchise that won ROY five consecutive years from 1992-96. Not to mention producing two first ballot HOFers in Pedro Martinez and Mike Piazza during that time.

that's a good point, but what happened to those ROYs? and didn't the dodgers trade both martinez and piazza? that speaks to the institutional myopia of management, which i agree with. tora's overall point is not without merit.

Farm system tapering out in the late '80s seems an odd claim to make about a franchise that won ROY five consecutive years from 1992-96. Not to mention producing two first ballot HOFers in Pedro Martinez and Mike Piazza during that time.

Good call there. I was working from memory alone when I made my comments.
That said, I'm not sure people realize how deep the Dodgers farm system was once upon a time. For decades they produced ML ready players assembly line fashion, especially SP who they would overwork and send on their way, only to pull up their next stud ace to slot in the gap.
This is a team that in the 70's started a home grown IF and through much of the 80's produced almost all of their own pitchers. Not to mention the many many ex Dodgers prospects that littered other teams via trades, rule 5 signings.

As the game changed, other teams got smarter, the draft tightened up signing players, some of their best FO talent went on to greener pastures, and O'Malley spent less, the Dodgers system slowly dried up.

And, to defend myself a bit, of those five ROY, Piazza was an absolute crapshoot hit the lotto deal, the last pick in the draft who miraculously turns into a HoF'er.. Nomo was signed from Japan and wasn't a Dodgers farm system product and, while they were serviceable major league players, I wouldn't exactly be shouting from the rooftops about the trio of Mondesi, Hollandsworth and Karros

What's the MLB record for the most money eaten on a contract? Would be an interesting chart.

Absolute dollars were much smaller back then, but I recall that at one point the Braves were paying more to players not on their roster than the Expos were paying their entire team.

What's the MLB record for the most money eaten on a contract?

I believe at one time, the Tigers held the record with Damion Easley, but that was long time ago. Mike Hampton might be up there. Tigers ate a lot of money letting Gary Sheffield go. The Giants released Aaron Rowand with some $12 million owed to him.

Good call there. I was working from memory alone when I made my comments.

The Dodgers had a run of first round draft pick busts which is probably what you're remembering (Dan Opperman, Bill Bene, Kiki Jones, Ronnie Walden, David Yocum) but overall the system seemed to still churn out decent players (also overlooked - they produced Paul Konerko).

Didn't the Mets owe Bobby Bonilla 12 bazillion dollars when they released him?

MLB just signed a deal with ESPN that is double what ESPN paid last time. The tidal wave of tv money shows no signs of letting up.

MLB just signed a deal with ESPN that is double what ESPN paid last time.

Well looks like the sportswriters are right, baseball is losing popularity and no one wants to watch it on TV.

Natioanl contracts don't really mean much to the teams. The deal comes out to something like 20 million per team.


One little thing in the contract that is going to be huge is that ESPN gets to increase the amount of Yankees and Red Sox games they air.

Natioanl contracts don't really mean much to the teams. The deal comes out to something like 20 million per team.

It's indicative that tv rights are going to continue to increase at the speed of light which is what this thread is nominally about.

The entities that require and enforce these Byzantine blackout restrictions are not the content providers, but the sport bodies themselves. If given the choice, MLB.TV wouldn't black out anyone, and neither would E5PN. MLB wants to sell the Yankees, for example, as many times as they can. But they know that viewership is a zero-sum game, as do the bidders. So they sell the rights to YES, who have an interest in not seeing this valuable content get put all over the other screens in their area; people won't watch the games on YES then. So MLB requires others to whom they sell the rights to black out their coverage, so that eyeballs don't leave YES and watch the game on E5PN or MLB.TV or whatever. This makes Yankee broadcast rights more valuable and more exclusive, and allows MLB to sell the same games multiple times (they get local money from YES; national money from E5PN, FOX, and others; streaming money from MLB.TV; and international broadcast rights from E5PN again).

Fair enough, up to a point. But before we go any further, I think I'm going to stop using "content providers" as it's a vague term IMO. So let's talk about content creators (studios that produce shows, or the sports teams/leagues themselves), content financiers/aggregators (individual networks), and content deliverers (cablecos/telcos/sat providers).

Now the normal arrangement for TV shows (non-sports division) is: content creators have an idea for a cool new show where a rogue former Navy Seal becomes a private eye who can solve cases because he doesn't have to follow the Rules. (Wholly original idea!) The content creator starts shopping the show around to the content financiers/aggregators like CBS, Fox, AMC, and so on. FX decides they'll bite, and they order up a pilot. They give the content creator a couple million bucks to go make the pilot. Content creator goes and starts hiring people, settling on Mark Wahlberg as the former Navy Seal, Chris O'Donnell as a current cop who views Marky Mark as a dangerous vigilante, Kevin Weisman as the socially-inept nerd who handles Marky Mark's tech needs, and Zooey Deschanel as Marky Mark's quirky love interest. They shoot the pilot, and FX likes it (although they want some minor changes). They agree to a $1m/episode license fee, which becomes the show's budget, and order up 12 more episodes. FX then sells advertising time during the show, thus hopefully recouping the money for the license fee. If the show's especially popular, they might be able to negotiate higher carriage fees with the various content deliverers. Meanwhile, the creators don't technically make a profit from the license fee (though obviously everybody gets paid, etc.); they normally get money from merchandising, DVD/Blu-Ray sales, agreements with rental outfits like Redbox and Netflix, and syndication (re-selling the show after first run to other networks).

So the function of the middle-men is to finance the show creation, gather a bunch of them together, and sell advertising time (as well as the network itself to the content deliverers).

The model isn't all that different with sports. The networks (RSN, national, etc.) provide funding for the leagues to run (well, partially anyway, along with ticket sales and whatnot). They then sell advertising and themselves.

So basically, they're brokers. And they can function as brokers because they more or less have monopolies, in the sense that if you want to watch Private Aye, you have to watch it on FX. If you want to watch the Yankees game, you need YES (assuming it's not a national game). But like all middle-men, they take a cut. So do the content deliverers. (The reason Verizon and AT&T got into the game is because delivering TV services is a lot more profitable than consumer-grade Internet services.) And sooner or later, content creators are going to start thinking about how they could make more money by eliminating the middle-men.

Baseball, of course, is a bit different from other sports because while the league handles the national deals, the teams individually do local deals. And it's even more complex because some/many/most(?) teams financially participate in the RSNs themselves. But I still believe that it's possible to get the revenue streams direct (either advertisers->creators or end users->creators, or some mix of the two).

Now, is that possible today? No. Nor is it possible anytime soon. But eventually, I suspect a mechanism will be developed. I'm not smart enough to know exactly how that will work. And maybe it won't exactly; maybe there will still be some kind of aggregator or aggregators like Hulu. But it's going to change fairly radically at some point, and yeah, the deliverers will be the first to die.

It's indicative that tv rights are going to continue to increase at the speed of light which is what this thread is nominally about.

Except that's not sustainable; as someone else rightly said, it's a bubble.

Except that's not sustainable; as someone else rightly said, it's a bubble.

So where is all the money going to go? TV might be a bubble but I seriously doubt media revenue is a bubble. So the issue is who captures that revenue and how do they dole it out. Sports being a live form of entertainment that goes stale quickly is very well positioned to be a major market force in the media industry regardless of how the content is delivered. I can't see how sports leagues are not going to be able to cash in on this strength over the next few decades.

Also, if a "bubble" lasts for 20 to 30 years is it really a bubble?

Except that's not sustainable; as someone else rightly said, it's a bubble.

Maybe. I honestly don't know as I haven't looked under the hood at this. It's an interesting investment project, though. Makes you feel sorry for the NFL, though, no? I'm sure they would kill hundreds to have as much content as baseball...

Now the normal arrangement for TV shows (non-sports division) is: content creators have an idea for a cool new show where a rogue former Navy Seal becomes a private eye who can solve cases because he doesn't have to follow the Rules. (Wholly original idea!) The content creator starts shopping the show around to the content financiers/aggregators like CBS, Fox, AMC, and so on. FX decides they'll bite, and they order up a pilot. They give the content creator a couple million bucks to go make the pilot.

My impression is that networks are going away from the independent producer model, and trying to keep programming in-house as much as possible. Since the value of network assemblage itself is probably diminished, this seems to make sense.

Natioanl contracts don't really mean much to the teams. The deal comes out to something like 20 million per team.


One little thing in the contract that is going to be huge is that ESPN gets to increase the amount of Yankees and Red Sox games they air.

What is the national audience for Red Sox/Yankees now? Or are they just narrowcasting to Northeasterners and their ex-pats? I am honestly asking, this may be the right move for them. I would never sit down to watch one of these games, since I can watch my own team.

Maybe narrowcasting is the way to go for them. They don't televise the WS, who cares if no one watches because people don't know the players.

So where is all the money going to go? TV might be a bubble but I seriously doubt media revenue is a bubble. So the issue is who captures that revenue and how do they dole it out. Sports being a live form of entertainment that goes stale quickly is very well positioned to be a major market force in the media industry regardless of how the content is delivered. I can't see how sports leagues are not going to be able to cash in on this strength over the next few decades.

If the numbers-crunchers thought the cable companies would make more money by putting a channel like YES on the premium tier and charging $10 or $20 per month instead of charging every subscriber $3/mo., they would have done so by now. The current model is only working because the cable companies are able to force millions of non-sports fans to pay for high-price sports channels they don't really want. It's a great racket the cable companies have, and they've had it for decades, but I wouldn't bet that it will remain in place for 20 more years to come.

MLBAM is a multibillion dollar company making a boatload of money each year and their content by and large is not forced down anyone's throat. If you want to stream their games online you pay them. If you don't you don't pay them. If you want to be able to watch 10 to 12 games a day on your TV you pay them. If you don't want that you don't give them a dollar. There is ample evidence that there are billions and billions of dollars out there that people want to spend on sports and baseball.

It's indicative that tv rights are going to continue to increase at the speed of light which is what this thread is nominally about.
Except that's not sustainable; as someone else rightly said, it's a bubble.

I've been hearing that since the 1960's

I for one, am really eager for the season premiere of "Private Aye."

Copper is pretty bad. Hell on Wheels is rudderless. Breaking Bad is getting to point where the transformation of Walt to evil is pretty much complete thus the show is becoming less enjoyable. True Blood went all religious on us. Mad Men was kind of "eh". The Borgias are just okay. Basically at this point I'm looking forward to the day when Justified, Game Of Thrones, and Newsroom come back.

MLBAM is a multibillion dollar company making a boatload of money each year and their content by and large is not forced down anyone's throat. If you want to stream their games online you pay them. If you don't you don't pay them. If you want to be able to watch 10 to 12 games a day on your TV you pay them. If you don't want that you don't give them a dollar. There is ample evidence that there are billions and billions of dollars out there that people want to spend on sports and baseball.

I love MLB.tv, but it's mostly a niche product right now. Due to the blackouts, most baseball fans can't truly cut the cord in favor of MLB.tv.

Anyway, MLB.tv is $150 per year, while the average cable bill is about $90 per month. I wonder how much a blackout-free MLB.tv could charge. I'm assuming the numbers aren't favorable or else MLB would be moving away from the blackout policy.

MLBAM is a multibillion dollar company making a boatload of money each year and their content by and large is not forced down anyone's throat.

Are you saying MLBAM's revenue is several billion/yr? I didn't know it's revenue was that high.

It's indicative that tv rights are going to continue to increase at the speed of light which is what this thread is nominally about.
Except that's not sustainable; as someone else rightly said, it's a bubble.

wasn't that the conventional wisdom about salaries when they first started ramping up in the 80s? i seem to remember even james said once in one of the abstracts that it couldn't go on ...

Mad Men was kind of "eh".

i want to disagree with you -- there were some real great episodes/parts of episodes this past season -- but on the whole it was not what i was hoping for.

what turned it into an overall disappointment to me was roger taking acid again at the very end of the last episode and flashing new york. completely gratuitous.

I love MLB.tv, but it's mostly a niche product right now. Due to the blackouts, most baseball fans can't truly cut the cord in favor of MLB.tv.

Anyway, MLB.tv is $150 per year, while the average cable bill is about $90 per month. I wonder how much a blackout-free MLB.tv could charge. I'm assuming the numbers aren't favorable or else MLB would be moving away from the blackout policy.

I'm not sure what this is addressing. The argument isn't that people will cut the cord and pay for MLB.tv. The argument is that the presence of MLB.tv proves that people are willing to actually select baseball and pay for it thus the notion that we are in a "bubble" is probably false and that there is an ocean of money out there and people want to spend it on sports.

I also don't really understand bringing up cable bills in the second paragraph.

wasn't that the conventional wisdom about salaries when they first started ramping up in the 80s? i seem to remember even james said once in one of the abstracts that it couldn't go on ...

Except aren't sports TV contracts rapidly outstripping inflation? Salaries do tend to correlate more or less to economic movement, but sports contracts don't seem to.

I dunno, maybe they will keep growing at dizzying rates. But it's hard to believe (especially as ratings decline) that advertisers will put up with this indefinitely.

I'm not sure what this is addressing. The argument isn't that people will cut the cord and pay for MLB.tv. The argument is that the presence of MLB.tv proves that people are willing to actually select baseball and pay for it thus the notion that we are in a "bubble" is probably false and that there is an ocean of money out there and people want to spend it on sports.

Wait...because some people pay *something* for MLB.TV, it therefore follows that current TV contracts are sustainable and not at all representative of a bubble?

I'm not following.

I thought this was the best season of Mad Men, although I had low expectations now that Don was married.

I can't believe anyone is looking forward to an episode of "Newsroom" unless it is to make snarky comments about it on Twitter.

that's a good point, but what happened to those ROYs? and didn't the dodgers trade both martinez and piazza?

They traded Pedro too early, but they got 5 MVP level seasons out of Piazza. Between him, Nomo, and Mondesi, the Dodgers got full benefit of their cheap early years. Dodgers in this time were not shy about spending, from Darryl Strawberry to Darren Driefort to Kevin Brown.

They spent big money on big names, and produced big talent out of their system, but they just couldn't stick to a plan long enough to piece a real team together. They'd hire a new sheriff, and the second something goes wrong they blow up the whole thing and hire another one.

Wait...because some people pay *something* for MLB.TV, it therefore follows that current TV contracts are sustainable and not at all representative of a bubble?

I'm not following.

I would guess you aren't following as well.

So where is all the money going to go? TV might be a bubble but I seriously doubt media revenue is a bubble. So the issue is who captures that revenue and how do they dole it out. Sports being a live form of entertainment that goes stale quickly is very well positioned to be a major market force in the media industry regardless of how the content is delivered. I can't see how sports leagues are not going to be able to cash in on this strength over the next few decades.

Also, if a "bubble" lasts for 20 to 30 years is it really a bubble?

My personal belief is that there is a bubble at play here, but it may well last for 20 years. If/when it bursts it'll be a generational thing. Anybody who grew up with cable/sattelite is going to keep paying it whether it makes economic sense or not, because they simply aren't capable of accepting alternatives. It'll still be some time before the generation that grows up with on demand alternative vowing controls enough of the purse strings for the cable companies to cut costs.

Edit: as to the MLB.tv thing, I think it proves that these kind of revenue streams might still be possible, but at the very least there will be a huge paradigm shift.

Haven't networks admitted they are overpaying for sports packages on value alone, but because most viewers can't fast forward through ads (because they watch live) its not only lucrative for advertisers, but also the best way to promo the other content on their network? Like I'm not sure NBC turned a profit with the Olympics, but I guarantee you everyone knows Matthew Perry is in a new comedy about a sports talk radio host who awkwardly attends group therapy with hilarious results.

So where is all the money going to go? TV might be a bubble but I seriously doubt media revenue is a bubble.

If media revenue isn't a bubble, why do the cable companies apparently fear an a la carte system rather than move toward an a la carte system? Right now, every cable subscriber is forced to pay $x for channels like YES. Obviously, the bean-counters have figured out that there aren't enough people willing to pay 2x or 3x for YES to make up for the people who would drop sports programming under an a la carte system.

82 Then A) that was a miscalculation because it makes me less likely to turn to NBC for fear of accidentally seeing that show and B) that only works so long as people are willing to overpay for the channels they do see. As alternatives become more prevalent and accepted people are going to quit buying cable. When I started college in '04 everyone who could afford it bought cable. By the time I finished law school this year I bet less than half went in for more than they needed to get Internet access, whether they could afford more or not. The networks would be a special case because they're everywhere and don't sign the kind of regional deals at issue here, they sign national deals that don't impact individual teams much at all.

If media revenue isn't a bubble, why do the cable companies apparently fear an a la carte system rather than move toward an a la carte system? Right now, every cable subscriber is forced to pay $x for channels like YES. Obviously, the bean-counters have figured out that there aren't enough people willing to pay 2x or 3x for YES to make up for the people who would drop sports programming under an a la carte system.

It's more complicated than that. The media companies that own the various networks bundle their offerings together; if you're Comcast and you want to carry Nickelodeon, then you'd better also take NickFour or whatever.

Also, many channels (e.g. shopping channels) PAY the cablecos/etc. for carriage; these, effectively, subsidize the more expensive, big channels. Almost nobody is going to pay for a shopping channel in an a la carte scenario.

EDIT: Furthermore, YES doesn't WANT to be an a la carte option. A common fight is between channel providers (who want to be in the most basic package possible, so as to reach more homes) and the cable/telco/sat providers, who want to put highly desirable channels in the most expensive packages.

Wait...because some people pay *something* for MLB.TV, it therefore follows that current TV contracts are sustainable and not at all representative of a bubble?

I'm not following.

I would guess you aren't following as well.

So where is all the money going to go? TV might be a bubble but I seriously doubt media revenue is a bubble. So the issue is who captures that revenue and how do they dole it out. Sports being a live form of entertainment that goes stale quickly is very well positioned to be a major market force in the media industry regardless of how the content is delivered. I can't see how sports leagues are not going to be able to cash in on this strength over the next few decades.

Also, if a "bubble" lasts for 20 to 30 years is it really a bubble?

Thanks; by re-posting exactly what you've said before, you've made it totally clear. Care to respond to what I actually wrote?

I'm not arguing that sports, more than most other things, will be able to pull in revenue, regardless of the distribution method. And yeah, I don't see why a bubble can't last for that long, but I'm not sure it really has lasted that long either.

McCoy, if Crawford's contract is not a "sunk cost" because they haven't paid it yet, how will they get out of paying it?

EDIT: Furthermore, YES doesn't WANT to be an a la carte option. ...

I know; that's been my main point all along. Right now, YES gets paid by every cable subscriber in the NYC area, including millions of people who aren't big baseball fans. This is great for YES but not so great for non-baseball fans.

It's also great for baseball fans. We pay less for NESN as part of basic cable than we would "a la carte", (if in addition to what we'd pay for basic cable without NESN included in the package). (I'm guessing).

McCoy, if Crawford's contract is not a "sunk cost" because they haven't paid it yet, how will they get out of paying it?

The same way the Red Sox did.

It's also great for baseball fans. We pay less for NESN as part of basic cable than we would "a la carte", (if in addition to what we'd pay for basic cable without NESN included in the package). (I'm guessing).

Sure, but it's the rough equivalent of splitting the check between a person who enjoyed a steak and a person who had a salad.

I love MLB as much as anyone, but I'm not sure my non-MLB-loving neighbors should be forced to subsidize my enjoyment of it.

McCoy, if Crawford's contract is not a "sunk cost" because they haven't paid it yet, how will they get out of paying it?

Same way the Red Sox did.

Am I eating the steak or the salad here? (I prefer the salad.)

The Dodgers will send Crawford and Gonzalez where?

I'm sure there are there are things on basic cable that your neighbors like that you don't like, too, but that's how it goes, and I think we all pay less because of it.

edit...at least, I think *I* do, because I like choices! I watch a lot of stuff that happens to be on basic cable that I'm sure I wouldn't had I had to pay for them "a la carte".

The Dodgers will send Crawford and Gonzalez where?

They could send Crawford to any number of places. It may be that they have to send very valuable players to do it, but it can still be done.

Now, if they released Crawford, we could consider the remaining contract minus 5 years of the minimum salary to be both sunk and future costs since they have to pay it no matter what.

I suppose they could, given similar circumstances. The point is that Crawford's contract is likely to be a "sunk cost" for someone, and right now, tag, the Dodgers are "it".

If media revenue isn't a bubble, why do the cable companies apparently fear an a la carte system rather than move toward an a la carte system? Right now, every cable subscriber is forced to pay $x for channels like YES. Obviously, the bean-counters have figured out that there aren't enough people willing to pay 2x or 3x for YES to make up for the people who would drop sports programming under an a la carte system.

Why are the cable providers the issue here? I don't care about them. I don't care about YES. I don't care about MLBAM. The point is that their is an ocean of money out there for sports entertainment and someone somewhere is going to give a lot of it to MLB.

Thanks; by re-posting exactly what you've said before, you've made it totally clear. Care to respond to what I actually wrote?

I'm not arguing that sports, more than most other things, will be able to pull in revenue, regardless of the distribution method. And yeah, I don't see why a bubble can't last for that long, but I'm not sure it really has lasted that long either.

No, I don't care to respond to gibberish.

If something lasts for 30 to 50 years it ain't a bubble it's an era.

McCoy, if Crawford's contract is not a "sunk cost" because they haven't paid it yet, how will they get out of paying it?

Answered several times. A sunk cost is a cost already paid and not retrievable. Even cutting Carl Crawford does not make his future costs sunk costs because there is still a possibility that they can avoid paying it. You can call it an expected sunk cost if you want but it is not a sunk cost yet.

I don't see the cable TV model disappearing for a while. Next recession I think more mid-range retail goes down, mid-range restaurants. Anything that requires people to get out of the house and spend money. Cable TV doesn't require that, it's a relatively cheap entertainment option, scales for a family, makes people feel more well off. It's going to be here for a while.

Cable providers have very smartly also become your internet providers. They aren't going away anytime soon.