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The Dodgers, MLB discussing how much of their mega TV deal the Dodgers have to share

Dec 18, 2012, 1:31 PM EDT

Image (1) dodgers%20logo.jpg for post 3955

We’ve heard a lot about how much bank the Dodgers stand to make with their new TV deal. Some estimates have it at six billion bucks.  But as Bill Shaikin notes, the bankruptcy court that handled the Dodgers transition out of Frank McCourt’s hands — and Major League Baseball itself — has some say about how much of that the Dodgers get to keep and how much shall be subject to revenue sharing.

The details may be of interest to some, but for those of you who don’t care about the specific numbers, note how these negotiations are a function of Major League Baseball teams’ right to a specific market in which other teams can’t compete and the relatively small amount of money each has to share with the rest of the league.

Think about it: the Dodgers are working with MLB to figure out how much of its massive TV deal it can shield from the other teams, with the rounding error on those numbers alone representing more than teams like the Brewers see from their entire TV deal.

  1. vallewho - Dec 18, 2012 at 1:37 PM

    And why should they “share” any of it???

    • The Dangerous Mabry - Dec 18, 2012 at 1:45 PM

      “The details may be of interest to some, but for those of you who don’t care about the specific numbers, note how these negotiations are a function of Major League Baseball teams’ right to a specific market in which other teams can’t compete

      For one reason. If MLB is going to give you territorial rights, which directly impact the value of your TV deal, then you’re going to owe some of that TV deal to MLB.

    • b453841l - Dec 18, 2012 at 1:46 PM

      Monopoly, baby! “note how these negotiations are a function of Major League Baseball teams’ right to a specific market in which other teams can’t compete and the relatively small amount of money each has to share with the rest of the league.”

    • ezthinking - Dec 18, 2012 at 1:48 PM

      They must “share” because contractually and legally they have too. Feel free to do some research for yourself.

      • davidpom50 - Dec 18, 2012 at 1:51 PM

        They SHOULD share because it makes sense for the league as a whole and the Dodgers individually. If the Dodgers don’t want to be part of Major League Baseball, they’re gonna have a hard time finding teams to play against.

      • vallewho - Dec 18, 2012 at 6:37 PM

        Well, I know why…but it doesn’t make it right. Think about it this way…who the hell want’s to pay money to see the Houston Astros ( Sorry for picking on you) / Miami Marlins (not sorry)…etc ??? Maybe certain teams should find an alternate league to play in. No more subsidies for greedy billionare owners. Want to play. Put up your money /put out a good product that people want to buy. You know…a viable business.

        And more to the question as to why, of course I know the answer. But as a fan this brings home the point of why I can’t enjoy watching my favorite team on a Saturday, even though I’m paying for 2 services. I guess MLB want me to pay for 3. The legal monopoly game is working out great for them.

    • cur68 - Dec 18, 2012 at 2:11 PM

      Because MLB functions as a kind of communist enterprise dedicated to enriching ALL owners. The teams are supposed to collectively make money. That’s why entrance into the club of MLB owners is so difficult (unless you’re a buddy of Selig’s. Ever notice the amount of slime on Selig’s friends? McCourt? Wilpon? Loria? It has been said that you can tell a lot about a guy by his friends).

      Commies, eh?

      • historiophiliac - Dec 18, 2012 at 2:23 PM

        ha ha Uncle Bud wants to re-educate you.

        (Reminds me, I really, really need to get that @deadmargeschott account going.)

      • moogro - Dec 18, 2012 at 5:19 PM

        MLB is remarkably similar to “the Commission” set up by the Mafia, complete with a Commissioner. Neither fascist, capitalist or communist, it is a protected “monopoly club” of made owners.

  2. sabathiawouldbegoodattheeighthtoo - Dec 18, 2012 at 1:47 PM

    If MLB has its own network now, how long before they stop licensing these broadcast rights to the likes of Fox? I mean, if Fox is willing to pay out 6 billion, they muc=st be taking in quite a bit more than that. MLB could go for the whole prize themselves.

    • davidpom50 - Dec 18, 2012 at 1:53 PM

      Fox is also bearing the costs of production though, which they can probably accomplish cheaper than MLB Network could.

  3. iamjimmyjack - Dec 18, 2012 at 1:57 PM

    The court decision has already specified what percentage of the tv revenues the dodgers must share. Other teams are furious because its a lower number than other teams contribute. The reason why MLB settled on a lower number was because they wanted to make the team more attractive to buyers. That was part of the reason the Dodgers dropped 2.15 billion on the price. MLB cant now change whats been settled already in bankruptcy court. This is going to get messy. Im so sick of these small market owners crying foul because they cant hang financially. If you cant foot the bill for your teams payroll, then sell. There are plenty of billionaires waiting for the opportunity to purchase a sports franchise. Teams like the Marlins have been collecting MILLIONS in revenue sharing every year and they have nothing to show for it. Why should the Dodgers pay a higher percentage of their revenue to support owners like Loria. Its not Guggenheim’s fault that your owners are unfit to hang with the big boys. If your owners dont like being in a small market, tough luck. Why’d they pay for the team? By the way, the TV money is coming out of the pockets of the fans who live in Los Angeles and pay an extra $4.00 a month to their TV bill. The fans pay extremely high tv bills. The fans money should only be going toward their favorite teams players. Why should a Los Angeles resident pay higher bills just so our money can go to the Baltimore Orioles? or the Pittsburg Pirates? It shouldnt.

    • echech88 - Dec 18, 2012 at 2:08 PM

      I don’t think these problems are mutually exclusive. The league would likely benefit in the long term by getting rid of Loria-type owners as well as putting some kind of deterrent to inflating a free agent market with thoughtless spending like the Dodgers have done.

      High payrolls aren’t a problem, but one or two that are extremely out of whack could have a negative effect on how the entire league is forced to spend.

      • iamjimmyjack - Dec 18, 2012 at 2:14 PM

        all im saying is you guys shouldn’t be mad at the Dodgers for having owners who want to win at ALL costs. Instead you should focus your hatred towards your owners, and ask the question of why are they in the baseball business? is it for the profits? is it cause they want to win? Most likely its because they are pocketing the profits instead of putting that money back into the product on the field. Guggenheim is showing the Dodgers fans that they arent going to be like Frank McCourt. Every dollar thats gained in ticket sales etc. is put back into the team payroll. You guys should demand owners like that instead of knit picking about our owners. Besides if their was a hard cap, hundreds of millions in shared taxes would otherwise be unavailable to the bottom feeders.

      • koufaxmitzvah - Dec 18, 2012 at 2:46 PM

        Thoughtless spending?

        It cost the Dodgers a young pitcher with great potential to pick up a starting 3rd baseman with an expensive contract.

        It cost the Dodgers 2 young pitchers with great potential, two minor league position players, and one James Loney to pick up a 1st basman, an outfielder, and a starting pitcher with expensive contracts.

        Yes, the free agent signing this year cost a lot of money, but apparently, other teams were willing to dish out similar numbers to the same starting pitcher.

        Juan Uribe for 3 years at $22 million is reckless until you consider the system allowed the aforementioned James Loney to pocket $7 million last year.

        Nothing reckless about the Dodgers. If anything, the whole MLB is crazy.

      • lanflfan - Dec 18, 2012 at 4:33 PM

        If you want to solve the problem of fiscally irresponsible and/or cheapskate “whack job” owners in MLB immediately institute a salary cap system (floor and ceiling). MLBPA will never go for it, heck most of the owners probably wouldn’t go for it, but that is really the only way your will ever ensure even the appearance of fairness, financially speaking, between the teams of different market sizes.

    • iamjimmyjack - Dec 18, 2012 at 2:16 PM

      you guys who dont like this comment are the same ones who have been collecting unemployment benefits for the past 99 months.

      • albertmn - Dec 18, 2012 at 2:26 PM

        It has come to fruition that Dodger fans will now be as insufferable as Yankee fans have always been. And, they haven’t even won anything yet.

      • lanflfan - Dec 18, 2012 at 4:29 PM

        Because there are millions of jobs out there ripe for the taking yet the millions of unemployed would rather sit on their ass than work to feed their family and keep a roof over their head. /delusion off

      • bougin89 - Dec 18, 2012 at 5:28 PM

        I’ve never been on unemployment and I root for the Brewers. I gave you a thumbs down because the way you thought process is, buying championships is not only acceptable but should be promoted. The way you write your comments why not have two professional baseball leagues, one with the Dodgers, Angels, Yankees, Red Sox, Phillies, Rangers and Tigers and the other league consist of the small market teams?

        Your only argument against small market teams is the Marlins, which is NOT the standard of any other small market team in baseball.

        Complaining about paying $4 more a month on your cable bill is laughable and contradicts your statement of the Dodgers owners are willing to win AT ALL COSTS. The Dodgers owners are going to make money, you don’t seem to understand this.

    • tgthree - Dec 18, 2012 at 4:31 PM

      You, sir, have no concept of how baseball economics work. Even if my Braves were sold tomorrow for eleventy billion dollars, that would have zero effect on the television deal that will pay them something like a tenth of what the Dodgers will earn over the next 25 years. And even if those new owners plowed every dollar of proceeds from the team (tickets, merchandise, TV revenue, revenue sharing) back into the team, they still wouldn’t be able to hold a candle to the Dodgers’ payroll, simply because the Dodgers are making TEN TIMES as much from their TV deal. And that TV deal has far less to do with Los Angeles or the Dodgers’ “win at all costs” owners than it does with the fact that the franchise lucked into a TV deal that expires at a time when sports television revenues are skyrocketing.

      So quit taking credit for your team just getting lucky. Now, to be frank, I’m conflicted because I believe that the Dodgers should in principle get to keep their local TV revenue. I like MLB’s system in the abstract, and have never had a problem with some larger-market teams having a financial leg up. But the kind of disparity that’s about to be realized, with the Angels, Dodgers, Phillies and Nationals (to name a few with massive or soon-to-be-massive local TV deals) on a completely different playing field is unprecedented in U.S. professional sports and just may not be sustainable.

      • senioreditor2 - Dec 18, 2012 at 5:17 PM

        Hardly luck at all. The Braves signed their TV contract knowing that the market could escalate. They signed a lengthy contract to guarantee revenue not predicting what might happen with the market. The Dodgers will essentially do the same thing over the next 25 years betting that the market will not appreciate too much for a guaranteed return….but don’t be mistaken, they are risking that future TV revenues won’t be significantly greater than today.

      • tgthree - Dec 18, 2012 at 11:03 PM

        senioreditor, I was referring to the Dodgers’ new ownership getting lucky. It is through no skill of Guggenheim that the Dodgers have an expiring TV deal. The poster I was responding to is giving Guggenheim all the credit for the Dodgers’ newfound pile of cash, and I’m saying the credit for that goes not to the new ownership but to the mere fact that their TV deal happens to be up for renewal now.

        Furthermore, if you think that 25 years (or so) ago, when the Dodgers signed their last TV deal, they were trying to time it so that it ended now instead of in 2003, I’ve got some oceanfront property in Arizona you might be interested in. I think there is some luck involved here, because I’m not sure the Braves had an option ten years ago to sign a “short-term” deal in anticipation of TV deals going through the roof now. Even if they had been able to anticipate it, which is debatable, the market between local TV stations and MLB clubs is far from a perfect competitive market, and they may simply not have had a choice but to sign a 20- or 25-year deal, lest they lose their coverage (and fan base) entirely. In which case, it’s absolutely luck that the Dodgers’ deal expired ten years earlier than the Braves’, as both deals were likely signed in an era when no one could have correctly timed the current boom in the value of sports television deals.

    • vallewho - Dec 18, 2012 at 6:41 PM

      Amen!

  4. echech88 - Dec 18, 2012 at 2:02 PM

    Not sure the MLBPA would bite, but why not just institute another threshold in the luxury tax that would really only apply to the teams with insane revenues relative to the rest of the league?

    I don’t think punishing them for securing higher revenues is ethical, but I could see the majority of owners having more issue with the Dodgers inflating the free agent market by being able to overspend recklessly. Make it so that the Dodgers can spend as much as they want, but after a certain point it will result in a big bill going back to other teams.

    • albertmn - Dec 18, 2012 at 2:28 PM

      What exactly did most of these teams (Angels, Dodgers, Yankees) do to “secure higher revenues”, other than be located in a larger metropolitan area?

      • senioreditor2 - Dec 18, 2012 at 5:18 PM

        Pay WAY more for their franchises then small market teams.

      • vallewho - Dec 18, 2012 at 6:49 PM

        Look at the “cable” bills and also look around the stadiums for these teams. compare the the number of empty seats (and also take into account the prices). That should provide some clue as to where the money comes from (and who it comes from).

  5. ktourek - Dec 18, 2012 at 2:09 PM

    Somewhere in Miami, Jeffrey Loria is doing his best Mr. Burns ‘Excellent’ impression…

  6. ireportyoudecide - Dec 18, 2012 at 2:28 PM

    You can’t play yourself. All TV revenue should be split with 50% going to the team and 50% devided amongst the other 29 owners. The Dodgers would still get $120 million plus the average of the other 29 teams.

    • Francisco (FC) - Dec 18, 2012 at 2:41 PM

      It’s not as easy as that. What happens with teams like the Yankees, Red Sox and Blue Jays? Their owners also own the networks that actually broadcast the games. They can do some sleight of hand to make sure their networks pay little to the team to minimize revenue sharing. I think this is addressed by MLB but no time to look it up.

    • vallewho - Dec 18, 2012 at 6:55 PM

      No you can’t “play” yourself, but it also not reasonable to pay someone else to compete against you. Anywhere else that would clearly be seen as a sham. If billionaire owners and their fan base cannot compete in what has been a big-money-game for quite a while now, then get out of the game.

  7. fanofevilempire - Dec 18, 2012 at 2:41 PM

    I hope the Dodgers get to keep a lot of their money, what is the use of handing over some of that to Pittsburg so the owner will write himself a huge x-mas bonus and cheat the Pittsburgh fan base!

    I also loved the idea when the Yankees built the new stadium because they now have a huge bill to write off against their profits.

    Baseball has to stop the welfare to these small teams who rip off the fan base.

  8. rips08 - Dec 18, 2012 at 3:17 PM

    MLB needs all of the teams to be able to compete financially. There are some owners that aren’t putting the money back into the team, but at the same time if teams like the Dodgers, Yankees and Red Sox outspend every other team by huge amounts, it weakens the entire league. There is a balancing act that has to happen.

    Those saying the other owners should not have bought the team or should sell it, the economics have changed. Teams weren’t getting deals like this in the past. Plus, if all those owners decided to fold the team because they can’t compete there are only 3 teams left playing each other and they would not be making near as much money.

    The stronger the league, the better it is for everyone.

  9. jaydoubleyou22 - Dec 18, 2012 at 3:41 PM

    Iamjimmyjack, thanks for injecting reason into the debate.

  10. brentfrazier - Dec 18, 2012 at 4:03 PM

    What baseball needs is a salary floor. Rather than have a maximum that teams can spend each year they should institute a minimum that teams must spend. Require those teams collecting the revenue sharing dollars to use them for on field talent. If it is earmarked or spent on anything else it should be returned to the league.

    • bougin89 - Dec 18, 2012 at 5:39 PM

      This should be obvious. Small market teams shouldn’t just get to collect the revenue sharing with no restrictions but their should also be a hard ceiling so that their isn’t the same 4 or 5 teams in the playoffs every year. Otherwise its the same scenario over and over, small market teams draft and grow talent which then signs with a large market team once they are free agents, rinse and repeat.

  11. onbucky96 - Dec 18, 2012 at 4:25 PM

    Ha ha, laugh @the lowly Brewers. Just compare their record this upcoming year to the Dodgers. You know, when ALL that expensive talent the Dodgers signed flops. We’ll expect an apology up here in great Beer state of Wisconsin.

    • lanflfan - Dec 18, 2012 at 4:41 PM

      And we will expect an apology, and a six-pack of beer for all fans, when the Dodgers have a better record than the Brewers when not ALL of the “expensive talent” flopped.

  12. lostsok - Dec 18, 2012 at 7:36 PM

    What a lot of hot air on the comment boards today. It’s like everyone farted at once.

    LA has a big market. They now have owners committed to the team NOT being a joke. They are going to have a big TV contract and they, and MLB, have to get the numbers straight.

    Why is any of that so difficult?

  13. cardsfan773 - Dec 18, 2012 at 7:37 PM

    They need to share more than other teams due to MLB helping them make payroll, pay park staff, etc when the McCourt’s were fighting over the team. Also its called revenue sharing for a reason.

  14. damnyankee13 - Dec 19, 2012 at 12:27 PM

    hey tgthree…. sooner or later there will be oceanfront property in Az, not that I am wanting it to happen, but California will be underwater. and there will be spanking brand new oceanfront property in Az. So, buy now, while its cheap

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