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 25, 2015, 12:24 PM EDT
Six players were suspended for Thursday’s benches-clearing brawl between the White Sox and Royals. Yordano Ventura got the longest suspension with seven games.
Apr 25, 2015, 12:01 PM EDT
Nelson Cruz just keeps on mashing for the Mariners.
Apr 25, 2015, 11:15 AM EDT
Five players were ejected after Thursday’s benches-clearing brawl between the White Sox and Royals, but there was also some drama behind the scenes.
Apr 25, 2015, 10:20 AM EDT
Could a trip to the disabled list be in Yasiel Puig’s future?
Apr 25, 2015, 9:38 AM EDT
Check out a double-dose of defensive excellence from Rockies third baseman Nolan Arenado.
Apr 25, 2015, 8:49 AM EDT
A quick recap of a busy Friday night around MLB, including another promising outing from Carlos Martinez.
Apr 24, 2015, 11:35 PM EDT
The Dodgers made a couple of moves to make room for reliever Sergio Santos, called up on Friday.
Apr 24, 2015, 11:00 PM EDT
Hisashi Iwakuma is dealing with a strained right lat muscle.
Apr 24, 2015, 10:05 PM EDT
The Mets have lost for the first time since April 11.
Apr 24, 2015, 9:10 PM EDT
Michael Saunders should be activated from the disabled list by the Blue Jays on Saturday.
Apr 24, 2015, 8:15 PM EDT
Wandy Rodriguez is starting on Friday night against the Angels.
Apr 24, 2015, 7:27 PM EDT
Hamilton’s return to Texas is the best-case scenario
Apr 24, 2015, 6:55 PM EDT
Mets reliever Bobby Parnell won’t throw for a week as he experienced forearm tightness during his Tommy John rehab.
Apr 24, 2015, 5:55 PM EDT
The Angels and Josh Hamilton are reportedly parting ways.
Apr 24, 2015, 5:09 PM EDT
Bonus of Tommy John rehab: more time to study for your naturalization test.
Apr 24, 2015, 4:51 PM EDT
To be fair, the guy was being a jackwagon.
Rob Manfred was asked again about the leaks in the Josh Hamilton case. His answers weren’t much better.
Apr 24, 2015, 4:05 PM EDT
Two weeks ago he said there would be no investigation. No he says the league has “tried mightily” to figure out the leaks. Really?
Apr 24, 2015, 3:15 PM EDT
Yelich, who agreed to a seven-year, $49 million contract this spring, was off to a slow start by hitting .200 with zero homers and a .488 OPS through 11 games.
Apr 24, 2015, 3:05 PM EDT
A-Rod’s habit of destroying narratives explains an awful lot about why reporters have developed a habit of destroying A-Rod.
Apr 24, 2015, 2:49 PM EDT
That leaves Everth Cabrera and Jimmy Paredes as the Orioles’ double-play duo.
- Suspensions announced for Thursday’s brawl between the White Sox and Royals 12
- Settling the Score: Friday’s results 63
- Report: Angels, Rangers agree on Josh Hamilton trade 63
- Must-Click Link: Alex Rodriguzez: the slugger with a thousand faces 21
- And That Happened: Thursday’s scores and highlights 114
- The Royals and White Sox had a benches-clearing fracas, five players ejected 155
- Bartolo Colon picks off a baserunner. By running him down all by himself. 54
- Pete Rose will be allowed to participate in All-Star Game festivities 69
- The early leaders in MLB’s “Franchise Four” thing have been announced (166)
- The Royals and White Sox had a benches-clearing fracas, five players ejected (155)
- Kelvin Herrera gets a five-game suspension; Yordano Ventura fined (133)
- Jose Bautista and the Orioles exchanged some words last night (117)
- Joe Buck has a truly awful suggestion about how to improve MLB broadcasts (115)