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UPDATE: Maybe the Rangers-FOX deal is not 20-years, $3 billion

Sep 27, 2010, 5:13 PM EST

UPDATE: Evan Grant of the Dallas Morning News hears that the Rangers’ deal with
FOX is actually worth $1.5-1.6 billion, not $3 billion
as reported by Bob Nightengale of USA Today, but that there are some incentives and escalators and stuff.  Even if it stays flat at $1.5 billion, however, that makes it, on average, a $75 million deal, which is over and above every team’s TV deal with a non-affiliated network of which I’m aware (remember: the Dodgers get $45 million; the Mariners are reported to get around $40 million). So, still a great deal for Texas, even at its lowest.

4:54 PM: I shoulda listened to those killjoys who go on about how things that sound too good to be true likely being too good to be true. A FOX spokesman tells Sports Business Journal that the figures reported by USA Today earlier this afternoon were “wildly inflated.”

Of course, the definition of “wildly inflated” matters here too. If the truth of the matter is that the deal is for, say, $50M a year over 20 years, sure, USA Today was out to lunch and this deal would represent a healthy, but not necessary crazy figure for the Rangers. If, on the other hand the truth is that the deal starts at $50M or $75 million but increases
every year and inflates until it’s still a $3 billion deal, then it’s
still kind of nuts
.  The devil is in the details, as they say.

By they way: I was chatting with Gleeman as this update came down a few minutes ago. He observed that it’s entirely possible that there will be no Rangers games on television at all in 20 years and, in fact, there may be no television. I think he meant that everything could go to some streaming internet or wireless kind of system that renders television as we know it obsolete. It’s possible, however, that he has inside information on an imminent nuclear war or zombie apocalypse.  Which, I don’t need to tell you, would totally be a buzzkill for Rangers baseball.

1:58 P.M.: It’s going to be hilarious when FOX executives realize that the contract they just signed was with the Rangers, not the Cowboys or Vivid Video or something else more marketable than baseball is thought to be:

The Texas Rangers, who clinched their first division title in 11
years over the weekend, just might start making this an annual routine
considering their giant financial windfall.

The Rangers,
cash-strapped for years with owner Tom Hicks, have signed a 20-year
extension with Fox Sports Southwest that will guarantee them $3 billion.

$150 million a year!  To put that in perspective, the Dodgers get about $ 45 million a year from FOX. The Yankees get less than $100 million from YES (though, obviously, they own a big chunk of the network so it’s not apples-apples). I doubt any team currently gets anything like $150 million from a non-affiliated network.

Two questions that immediately spring to mind in light of this deal:

  • Is it any wonder why so many people were willing to jump into protracted litigation to get a piece of this team? and
  • How bad a businessman is Tom Hicks if he couldn’t make the Rangers solvent with that kind of scratch available?

Whatever the case, with this TV deal, the Rangers shouldn’t be lumped in with the mid-market teams going forward. They should be considered a high-dollar player the moment the first check comes in.

  1. matt - Sep 27, 2010 at 2:05 PM

    It would be cool if they signed Cliff Lee. The Yankees talk like its a forgone conclusion that nobody else would be able to afford him. Spread the wealth!!

  2. Giant Space Ants - Sep 27, 2010 at 2:08 PM

    Greenberg said he’d make use of that 5th largest market- guess this is a first step.

  3. Chris Fiorentino - Sep 27, 2010 at 2:18 PM

    Isn’t this part of the problem with baseball? The big teams get the big local money and they don’t really have to share much of it with anyone. There would be no Texas without Kansas City, Tampa Bay, and Florida. Yet, Texas will now have a major advantage over about 80% of the teams because of a monster contract they signed. Whether they spend it right or not is not the issue…the issue is that Cliff Lee will be the #1 free agent and there’s only about 8 teams that can truly afford to sign him. In the NFL, all 32 teams have an equal chance to sign a free agent. In baseball, the biggest free agents can only go to about 25% of the teams…if that.

  4. Detroit Michael - Sep 27, 2010 at 2:18 PM

    Given that for the next 19 seasons or so that the Rangers’ off-field success has no impact on their local television revenue, doesn’t this decrease the incentive to spend more on major league payroll? Sorry to be a wet blanket.

  5. Jonny5 - Sep 27, 2010 at 2:21 PM

    Maybe Nolan Ryan is 20 times smarter than he seems to be in those Scotts commercials. It would be totally awesome if they gave the middle finger to the Yanks and kept Lee. With that much money they could probably land……… Wow, Like a whole pitching staff full of aces…

  6. Trevor B - Sep 27, 2010 at 2:26 PM

    Yeah, this could greenlight them to be stingy for 15 years and line their pockets. Then rebuild the team for a few seasons and spend more money to have one great season to get the contract renewed another 20 years! :-)

  7. lardin - Sep 27, 2010 at 2:35 PM

    Did you ever think the reason the Yankees talk like Lee is a forgone conclusion is because CC is his best friend in baseball and there wives are extremely close also. At the trade deadline, before he went to Texas, Lee’s wife was discussing where to live with CC’s wife.
    Throw in the fact that he shares an agent with AJ Burnett. The Yankees like their chances.
    The Yankees also believe that Cliff Lee will be all amount the money. Do you really expect Texas to win a bidding war with the Yankees?

  8. Professor Dave - Sep 27, 2010 at 2:41 PM

    Any clue what LAA makes?

  9. Craig Calcaterra - Sep 27, 2010 at 2:42 PM

    No idea about the Angels. I heard the Mariners make something like $40 million a year.

  10. JimmyY - Sep 27, 2010 at 3:05 PM

    …….and SD’s is like $4 million (I think, please correct if not) and a playoff contender

  11. Chris Fiorentino - Sep 27, 2010 at 3:16 PM

    Rangers can pay Lee more than C.C. The Yankers can’t.

  12. andrewlw - Sep 27, 2010 at 3:20 PM

    I’m curious to see what implications this will have on payroll. Given that this seems to be the most by far any team receives they should have a massive payroll increase while at the same time remain profitable.
    I gotta ask what was FOX thinking? Is there a reason they would pay this much compared to other teams?
    Finally anyone know where I can find out how much Rogers’ right hand charges it’s left hand to broadcast Blue Jay games.

  13. Simon DelMonte - Sep 27, 2010 at 4:03 PM

    On the one hand, the Yanks own their own network. OTOH, they have a budget.
    All I know is that unless Cliff Lee spends the next three weeks throwing home run balls, he’s likely to be at the center of a bidding war.

  14. ThatGuy - Sep 27, 2010 at 4:05 PM

    I found an article from 2004 that said the Twins signed a 8 year, 12 million dollar a year deal. 1.5 million a year vs 150 million a year. Thats a crazy disparity.

  15. Tony A - Sep 27, 2010 at 4:39 PM

    WOW! The Texas Rangers, America’s Team…

  16. Tony A - Sep 27, 2010 at 4:52 PM

    WOW! The Texas Rangers, America’s Team…

  17. geoknows - Sep 27, 2010 at 5:11 PM

    “It’s possible, however, that he has inside information on an imminent nuclear war or zombie apocalypse.”
    Well, there’s that whole Mayan calendar thing…

  18. Giant Space Ants - Sep 27, 2010 at 5:22 PM

    Of course the Rangers franchise would be faced with the end of the world once they got good- one playoff win in fifty years says someone somewhere has it in for you.

  19. Dan in Katonah - Sep 27, 2010 at 5:30 PM

    Craig,
    We’ve had law discussions here before, but I don’t do bankruptcy. My question is, obviously a deal of this size was in the works for some time – so how could the team be shielded by bankruptcy if they had this much cash flow on tap and waiting to come in? If I was a creditor who was getting paid back a reduced amount on what the Rangers owed me (after they tried to accept a lower purchase price), I’d be pretty pissed off right now. Can we call shenanigans?

  20. sportsdrenched - Sep 27, 2010 at 5:40 PM

    At first thought, I was like wow, The Rangers? Really.
    Then I remember a lot of the discussion during this past summers Big 12 morph into the Texas 10. Texas is expected to double in population in the next 20 years, the life of this contract. Now it makes perfect sense that FOX would try and get ahead of the curve on this.
    Because like a Good Royals fan, and Big 12 North fan knows. It’s a not about athletic performance anymore…it’s how many TV’s you can bring.

  21. RichardInBigD - Sep 27, 2010 at 5:42 PM

    Evan Grant of the Dallas Morning News is reporting 1.6 billion for 20 years.

  22. APBA Guy - Sep 27, 2010 at 6:20 PM

    Craig- if Tiffany is living in your basement what are you doing referencing Vivid Video? How much is enough with you?

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