November 25, 2012 at 2:40 PM
Report: Dodgers nearing TV deal worth between $6 billion and $7 billion over 25 years
Remember all the hand-wringing and teeth-gnashing over all the expensive trades the Dodgers made in the second half of last season. Predictions of how they’d come to regret taking on that plethora of contracts from the Boston Red Sox, including the likes of Adrian Gonzalez and Carl Crawford?
Well, guess again.
Word comes down from Nikki Finke of Deadline that the Dodgers are on the verge of signing a new local cable TV deal with Fox said to be work between $6 billion and $7 billion over 25 years.
So, no, the contracts taken on last season aren’t about to slow the Dodgers down any time soon.
At the risk of repeating myself, yet again, welcome to the new world of Major League Baseball.
Teams that spent the 1990s and last decade financing their operations thanks to sweetheart stadium deals where taxpayers bore the brunt of costs have now come up with a new generation’s cash cow in regional sports network (RSN) deals.
The Dodgers’ record-setting deal comes just under a year after the crosstown Los Angeles Angels of Anaheim signed free agents Albert Pujols and C.J. Wilson to deals that had the doomsayers chirping. Then, within 48 hours, the Angels revealed how they were paying for it all: with a cable TV deal said to be worth $3 billion over 20 years.
That came soon after a similar $3-billion, 20-year deal the Texas Rangers closed for themselves, enabling them to take payroll well north of $100 million and splurge on free agent Yu Darvish, among others.
Television is fueling the next wave of big spending in baseball (something always will) and teams with cable TV deals upcoming — hello, Mariners — know they’re in-line to score huge in the very near future.
What is driving these staggering costs being paid to teams? As mentioned in the linked-to article, as well as others written on this blog the past year, televised sports are one of the last places where advertisers know that viewers won’t be as likely to skip through commercials via recorded DVR watching. Let’s face it: most of us still watch our live sporting events live. That’s not the case with our favorite weekly shows, is it?
How long will this last? Good question. The experts I’ve talked to say we’ve got a good couple of years to go before somebody comes up with technology to help us skip ads while watching live TV (good luck with that) or legislators stop making cable customers foot the bill for sports teams.
At issue is the so-called bundling of sports programing on top of other networks and shows that cable customers are paying for. In many cases, people who don’t even like sports are forced to pay increasingly high rates to watch the non-sports shows they like because a cable company bundles them together with sports channels they don’t want.
That could change if lawmakers ever get their act together and start working for consumers rather than cable companies they’re supposed to be policing.
I’m not holding my breath on that one for now, which means the Mariners should be well-positioned to score a huge cash windfall within the next year or so. Remember, they can opt out of their cable deal with ROOT Sports in 2015 and you tend to negotiate new stuff well ahead of the actual drop dead date.
No, the Mariners won’t get as much as the Dodgers.
But yeah, they should make enough money to take their payrolls beyond $100 million for years to come.
What’s stopping them from getting a head start on that? Absolutely nothing.
Remember that the next time a discussion surfaces about the team’s pursuit of a free agent. No, the fit may not always be perfect. And yeah, the Mariners may have to go an extra year, or beyond market value to lure a free agent over here.
But so what? The question you should be asking is whether the free agent makes the Mariners better. After that, let the Mariners worry about the cost-effectiveness of the whole thing.
Because that’s a lesson we should have learned a year ago with the Angels. And in case we missed it, it’s a lesson this Dodgers deal hammers home yet again for those paying attention to what matters.
Cost-effectiveness is overrated.
That is, unless you happen to live in Tampa Bay or Oakland, two of the only places where taxpayers have yet to cough up free money stadium deals for super-wealthy owners. So, unless those owners start diping into their own portfolios to keep up with the Joneses, every bit of $WAR value matters.
But the rest of the teams? Give me a break. Somehow, the Tigers, in an economically-savaged smaller market like Detroit, managed to find a way to be a top-10 spender and consistent winner.
Baseball is not an equal sport when it comes to salary. And teams will keep on spending big in an effort to win as soon as they get a sniff of potential new money being gifted them by taxpayers and/or cable TV subscribers.
So, if your team is counting its pennies and still losing on a consistent basis? Don’t be afraid to ask why. Especially if there’s word of big money coming around for that team in the near future.
Nothing wrong with some of the “wealth” being passed along to long-suffering fans. The excuses for not doing so grow thinner with each new deal that gets announced.