Jan 23, 2013, 12:52 PM EDT
We talk a lot about the skyrocketing TV deals baseball teams are getting from cable operators these days. One wonders, though, whether or not we’re witnessing a bubble that’s going to soon burst. If it does, we may look at the Dodgers’ new TV deal as the beginning of the end.
The Dodgers TV deal with Time Warner is reported to be upwards of $8 billion. To pay for that, Time Warner is going to charge other carriers (Direct TV, Dish Network, other cable systems) $4 or $5 per subscriber for the right to carry the new Los Angeles Dodgers network they’re operating, with those costs passed on to the other carriers’ customers. This is how all sports TV rights deals go. It’s just way bigger with the Dodgers and Time Warner.
Many — probably most — of the customers who are seeing their cable bill go up are not Dodgers fans. They just want to watch Nick Jr. or History Channel or BBC America or any number of other channels. But, because you can’t (for the most part anyway) pick and choose which channels you get, the non-sports watchers are helping subsidize the sports watchers. Again, this is how it always works, but this time the rate hikes in question are going to be quite large.
Joe Flint and Bill Shaikin of the L.A. Times write about this today, and they talk to one former TV executive who thinks that such a pattern is unsustainable:
But non-sports fans and pay TV companies are increasingly frustrated at having to pick up the tab for big sports deals. There have been calls to sell sports channels “a la carte,” or separately from other programming.
The Dodger agreement with Time Warner Cable may be a tipping point.
“That is the solution everyone should be looking at seriously,” said Derek Chang, a former senior executive at satellite broadcaster DirecTV. Such a move, he added, may be the only way to lower the cost of TV sports. “Ultimately the market for fees would then reset.”
All it takes is a political groundswell — and someone talking about how we should think of the children who just want to watch “Spongebob” is a great way to get that going — for Congress to wade in and either begin legislating or begin threatening to legislate with respect to cable TV in such a way that a la carte pricing becomes available. If it does, companies in Time Warner’s position won’t be able to demand across-the-board rights fees like they are now and, in turn, they won’t be able to offer sports teams like the Dodgers the billions of dollars in rights fees like they’re currently doing.
If that bubble bursts, down with it comes the TV money. Then down go the franchise values, which are escalating due to the TV money sports teams are attracting. If team values go down, team payrolls will eventually come down too. No aspect of baseball finances would be untouched by it.
Will it happen? I don’t know. And if it does, I don’t know when. But I also know that no bubble in history has ever failed to burst, and that when they do burst, the bubbles tend to take down just about everyone.
Aug 4, 2015, 11:02 PM EDT
O’Flaherty owns an ugly-looking 5.91 ERA in 25 appearances this season, but the 30-year-old has held left-handed batters to a .186/.286/.209 batting line in 2015 and a .201/.266/.263 line for his career.
Aug 4, 2015, 10:50 PM EDT
Shaffer, a first-round pick in 2012 out of Clemson University, was sporting an impressive .954 OPS and 16 home runs through 55 games this season at Triple-A Durham.
Aug 4, 2015, 10:21 PM EDT
Reds center fielder Billy Hamilton robbed Jason Heyward of extra bases on Tuesday night in Cincy …
Aug 4, 2015, 9:13 PM EDT
Walker was selected 24th overall back in June and later agreed to a $1.78 million signing bonus — around $314,400 under his recommended slot value.
Aug 4, 2015, 8:08 PM EDT
Jimmy Rollins received a huge ovation Tuesday evening in his first game back in Philly …
Aug 4, 2015, 7:15 PM EDT
Turner is having a tremendous season for the National League West-leading Dodgers, boasting a .323/.387/.563 slash line with 13 home runs, 20 doubles, and 44 RBI in 87 games.
Aug 4, 2015, 6:32 PM EDT
Tigers owner Mike Ilitch cut ties with longtime general manager Dave Dombrowski on Tuesday afternoon, but it doesn’t sound like anybody else is on the chopping block yet.
Aug 4, 2015, 5:20 PM EDT
After arriving in 2002, Dombrowski rebuilt an organization that was an utter dumpster fire.
Aug 4, 2015, 5:01 PM EDT
Martin heads back to the minors as a 27-year-old with nearly 1,500 plate appearances as a big leaguer.
Aug 4, 2015, 4:14 PM EDT
A shocking announcement from the Tigers today.
Aug 4, 2015, 3:45 PM EDT
He has a strained forearm.
Aug 4, 2015, 3:12 PM EDT
No Royals were suspended.
Aug 4, 2015, 3:00 PM EDT
He calls it a “hail Mary”
Aug 4, 2015, 2:46 PM EDT
In between the DL stints Freeman played just 10 games.
Aug 4, 2015, 1:19 PM EDT
He played two games for the Yankees.
Aug 4, 2015, 12:27 PM EDT
Incredible numbers for a 20-year-old shortstop.
Gregg Zaun to Yordano Ventura: “stop writing checks with your mouth that your skinny ass can’t cash”
Aug 4, 2015, 11:44 AM EDT
Gregg Zaun, as always, providing a voice of reason.
Aug 4, 2015, 10:30 AM EDT
He’s pitcher number two they received in the David Price deal.
Aug 4, 2015, 10:15 AM EDT
“I only have one head.”
Aug 4, 2015, 9:48 AM EDT
Not having access to athletes and coaches would be a bummer at first, but over time the press would do just fine with it.
- Brad Ausmus receives a vote of confidence from new Tigers general manager Al Avila 9
- Title or no title, Dave Dombrowski’s tenure in Detroit was a success 27
- Dave Dombrowski out as Tigers General Manager, team president; Al Avila takes over 59
- Blue Jays’ Aaron Sanchez, John Gibbons disciplined in the wake of Sunday’s plunkings 72
- Believe the hype: Carlos Correa is already a superstar 34
- Gregg Zaun to Yordano Ventura: “stop writing checks with your mouth that your skinny ass can’t cash” 100
- And That Happened: Monday’s scores and highlights 55
- Adrian Beltre needs just five innings for the third cycle of his career 16
- The benches cleared in Friday’s Giants-Rangers game (208)
- Blue Jays acquire David Price from the Tigers (113)
- Rangers land ace left-hander Cole Hamels from Phillies (106)
- Gregg Zaun to Yordano Ventura: “stop writing checks with your mouth that your skinny ass can’t cash” (105)
- And That Happened: Sunday’s scores and highlights (88)