Skip to content

Could the Dodgers’ giant TV deal be the beginning of the end for giant TV deals?

Jan 23, 2013, 12:52 PM EDT

old TV

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.

Latest Posts
  1. Mets acquire lefty reliever Eric O’Flaherty from A’s

    Aug 4, 2015, 11:02 PM EDT

    Texas Rangers v Oakland Athletics Getty Images

    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.

  2. Richie Shaffer’s first major league hit was a home run

    Aug 4, 2015, 10:50 PM EDT

    Richie Shaffer AP

    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.

  3. Video: Billy Hamilton sprints, soars for tremendous grab

    Aug 4, 2015, 10:21 PM EDT

    Billy Hamilton AP

    Reds center fielder Billy Hamilton robbed Jason Heyward of extra bases on Tuesday night in Cincy …

  4. Dodgers first-rounder Walker Buehler requires Tommy John reconstructive elbow surgery

    Aug 4, 2015, 9:13 PM EDT

    dodgers logo

    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.

  5. Video: Jimmy Rollins returns to Philadelphia

    Aug 4, 2015, 8:08 PM EDT

    Carlos Ruiz, Jimmy Rollins AP

    Jimmy Rollins received a huge ovation Tuesday evening in his first game back in Philly …

  6. Justin Turner expects to return on August 12

    Aug 4, 2015, 7:15 PM EDT

    Justin Turner, Wilmer Flores AP

    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.

  7. Brad Ausmus receives a vote of confidence from new Tigers general manager Al Avila

    Aug 4, 2015, 6:32 PM EDT

    Seattle Mariners v Detroit Tigers Getty Images

    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.

  8. Title or no title, Dave Dombrowski’s tenure in Detroit was a success

    Aug 4, 2015, 5:20 PM EDT

    Dave Dombrowski

    After arriving in 2002, Dombrowski rebuilt an organization that was an utter dumpster fire.

  9. Rangers demote center fielder Leonys Martin to Triple-A

    Aug 4, 2015, 5:01 PM EDT

    Leonys Martin AP AP

    Martin heads back to the minors as a 27-year-old with nearly 1,500 plate appearances as a big leaguer.

  10. Braves lose Freddie Freeman to another injury

    Aug 4, 2015, 2:46 PM EDT

    Freddie Freeman AP

    In between the DL stints Freeman played just 10 games.

  11. Believe the hype: Carlos Correa is already a superstar

    Aug 4, 2015, 12:27 PM EDT

    150804-Carlos-Correa Getty Images

    Incredible numbers for a 20-year-old shortstop.

  12. The Tigers may be calling up Matt Boyd

    Aug 4, 2015, 10:30 AM EDT

    Matt Boyd Getty Images

    He’s pitcher number two they received in the David Price deal.

  13. An English soccer club effectively bars media. Get used to this, U.S. sports fans.

    Aug 4, 2015, 9:48 AM EDT

    press hat

    Not having access to athletes and coaches would be a bummer at first, but over time the press would do just fine with it.

Top 10 MLB Player Searches
  1. C. Gomez (4795)
  2. Y. Cespedes (4670)
  3. B. Revere (3519)
  4. C. Hamels (3352)
  5. D. Price (3284)
  1. J. Soria (3107)
  2. H. Olivera (2968)
  3. B. Moss (2862)
  4. G. Parra (2806)
  5. M. Leake (2740)