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.
Apr 23, 2014, 3:01 PM EDT
Sammy Sosa hit 293 homers at Wrigley Field, but the Cubs are trying to make people forget that happened.
Apr 23, 2014, 2:30 PM EDT
Matt Harrison will come off the disabled list and start Sunday for the Rangers, seeing his first big-league game action in more than a year following multiple back surgeries and Thoracic Outlet Syndrome.
Apr 23, 2014, 1:35 PM EDT
Daniel Nava is headed to the minors one season after hitting .303.
Apr 23, 2014, 1:05 PM EDT
Nick Franklin is trying to find a way into the Mariners’ lineup.
Apr 23, 2014, 12:16 PM EDT
Jesse Crain hasn’t thrown a pitch in a game since June 29 and it doesn’t look like that will be changing any time soon.
Apr 23, 2014, 11:36 AM EDT
It’s been an awful start for the Snakes. Awful enough to get someone fired?
Apr 23, 2014, 11:19 AM EDT
Brewers pitching prospect Johnny Hellweg, who was acquired from the Angels as part of the Zack Greinke swap in July of 2012, has been diagnosed with a torn ulnar collateral ligament and is expected to undergo Tommy John elbow surgery.
Apr 23, 2014, 11:02 AM EDT
Mariners right-hander Hisashi Iwakuma was expected to begin a minor-league rehab assignment this week as he comes back from a spring training finger injury, but instead the team had him throw a 58-pitch simulated game yesterday.
Apr 23, 2014, 10:48 AM EDT
Fenway may be the site of more accomplishments, but it’s easier to see ourselves in Wrigley Field.
Apr 23, 2014, 10:15 AM EDT
San Diego is looking to trade one-time starting catcher Nick Hundley.
Apr 23, 2014, 9:29 AM EDT
Not the best call by instant replay officials in the system’s brief history.
Apr 23, 2014, 9:08 AM EDT
Right now, Cuban players have an incentive to avoid coming straight to the United States. That incentive should be eliminated.
Apr 23, 2014, 8:40 AM EDT
The columnist’s name is Anthony Rieber. And he apparently doesn’t get out much.
Apr 23, 2014, 6:35 AM EDT
Pitching porn in Atlanta. Graphic, hard core pitching porn.
Apr 22, 2014, 11:20 PM EDT
CSNNewEngland.com’s Sean McAdam reports that outfielder Shane Victorino may be activated from the disabled list Wednesday if he makes it through his third minor league rehab game Tuesday night at Triple-A Pawtucket without experiencing any issues.
Apr 22, 2014, 10:01 PM EDT
Cardinals ace Adam Wainwright landed awkwardly while trying to chase down a high-chopper off the bat of Chris Young in the seventh inning Tuesday at Citi Field and left the game with a hyperextended right knee.
Apr 22, 2014, 9:17 PM EDT
Angels fan Tim Sherrill, a resident of Ponoma, California and a member of the United States Air Force, caught Albert Pujols’ 500th career home run on Tuesday night in the nation’s capital …
Apr 22, 2014, 8:53 PM EDT
Albert Pujols hit a three-run shot to left field off Nationals starter Taylor Jordan in the top of the first inning and then crushed a two-run bomb to deep left-center off Jordan in the top of the fifth for the 499th and 500th home runs of his 14-year major league career on Tuesday night in Washington, D.C.
Apr 22, 2014, 8:39 PM EDT
Manny Machado will soon be one phone call away from rejoining the Orioles’ active major league roster. According to Eduardo A. Encina of the Baltimore Sun, the young third baseman has been cleared to embark on a minor league rehab assignment this Friday with the High-A Frederick Keys.
Apr 22, 2014, 7:51 PM EDT
Watch as Albert Pujols hits his 499th career home run Tuesday off Nationals starter Taylor Jordan …
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