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.
May 23, 2015, 9:40 AM EDT
The Marlins have lost eight games in a row and are now 0-5 under new manager Dan Jennings, but at least Dee Gordon is doing some cool things.
May 23, 2015, 8:57 AM EDT
A quick recap of a busy Friday around MLB, including the rolling Royals.
May 22, 2015, 11:59 PM EDT
Mike Trout is pretty good at this baseball thing.
May 22, 2015, 11:40 PM EDT
Bad news for the reeling Marlins: starters Mat Latos and Henderson Alvarez both will take at least a couple of weeks off due to injuries.
May 22, 2015, 11:05 PM EDT
Ichiro Suzuki may be close to the end of a brilliant career, but he’s not done moving up baseball’s all-time leaderboards.
May 22, 2015, 10:25 PM EDT
Nelson Cruz kept pace with Bryce Harper, taking back the MLB lead in home runs shortly after losing it.
May 22, 2015, 9:35 PM EDT
Stephen Vogt has been baseball’s best-hitting catcher and GM Billy Beane plans to hold onto him.
May 22, 2015, 8:40 PM EDT
Athletes aren’t born with an ability to speak with the media. We got a look into a media coaching session between Athletics closer Sean Doolittle and girlfriend Eireann Dolan.
May 22, 2015, 7:51 PM EDT
The Dodgers added some pitching depth on Friday, acquiring pitcher Eric Surkamp from the White Sox.
May 22, 2015, 7:45 PM EDT
The White Sox are managing Carlos Rodon’s workload so they pushed the lefty’s start back from Monday.
May 22, 2015, 6:55 PM EDT
Coco Crisp will go back on the disabled list, but has chosen against having career-ending surgery.
May 22, 2015, 6:05 PM EDT
The Mets appear to be heading towards using a six-man rotation after Dillon Gee returns on Saturday.
May 22, 2015, 4:47 PM EDT
The Yankees firmly believe that the only people allowed to disparage Alex Rodriguez are the Yankees.
May 22, 2015, 3:45 PM EDT
Castillo is starting tonight in right field.
May 22, 2015, 2:50 PM EDT
Janssen was signed for $5 million to replace Tyler Clippard as the Nationals’ primary setup man.
May 22, 2015, 2:30 PM EDT
When I see you smile, Barry, I can face the world. You know I can do anything. When I see you smile, I see a ray of light.
May 22, 2015, 2:21 PM EDT
21-year-old right-hander Norge Ruiz.
May 22, 2015, 1:30 PM EDT
But Major League Baseball’s silliness about these kinds of infractions, however, will continue on unabated.
Quote of the Day: Freddie Freeman inadvertently illustrates the silliness of the foreign substance rules
May 22, 2015, 11:03 AM EDT
Paraphrased: “Smith should be way less obvious about the fact that he’s trying to keep us safe!”
May 22, 2015, 10:47 AM EDT
Travis has been a huge bright spot for Toronto this season.
- Settling the Score: Friday’s results 3
- Video: Mike Trout makes a ridiculous slide to beat the tag at third base 5
- Cuba’s best pitching prospect is on his way to America 21
- Will Smith suspended for eight games for the foreign substance on his arm 61
- Will Smith’s ejection once again shows baseball’s silly approach to foreign substance rules 48
- And That Happened: Thursday’s scores and highlights 95
- Who really owns a home run ball? 65
- The story behind the Nationals squirting chocolate syrup on each other after big wins 43
- And That Happened: Wednesday’s scores and highlights (131)
- Bryce Harper on Marvin Hudson ejection: “I don’t think 40,000 people came to watch him ump” (130)
- Bryce Harper ejected for second time in a week (122)
- GM Dan Jennings to be named the Marlins new manager. And it’s a terrible idea. (111)
- And That Happened: Tuesday’s scores and highlights (101)