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.
Mar 29, 2015, 6:05 PM EDT
Phillies manager Ryne Sandberg shook up his outfield a bit on Sunday, announcing that Ben Revere would be moving to left field.
Mar 29, 2015, 5:01 PM EDT
Hamels tossed five scoreless innings in his latest Grapefruit League start. He’ll take on the Red Sox on April 6 — a team he has been connected to in trade talks throughout the offseason.
Mar 29, 2015, 3:37 PM EDT
Ryan Hanigan is expected to open the season as Boston’s starting catcher. And season-ending surgery for Vazquez would likely accelerate the timetable for top prospect Blake Swihart’s debut.
Mar 29, 2015, 2:23 PM EDT
Uehara originally strained his right hamstring on March 17 while doing conditioning drills in Red Sox camp.
Mar 29, 2015, 1:15 PM EDT
Russell Wilson spent nearly seven minutes with the Rangers’ television crew on Saturday …
Mar 29, 2015, 12:08 PM EDT
According to Sean McAdam of CSN New England, the Red Sox have named right-hander Clay Buchholz their Opening Day starter.
Mar 29, 2015, 11:12 AM EDT
Jose Fernandez would have been given the nod, but he’s not expected to be recovered from Tommy John reconstructive elbow surgery until sometime in June.
Mar 29, 2015, 10:14 AM EDT
MLB.com’s Mark Bowman reports that the Braves have released left-hander James Russell.
Mar 28, 2015, 11:25 PM EDT
Let Marlins outfielder Ichiro Suzuki tell you how being a free agent is like being a puppy in a pet shop.
Mar 28, 2015, 10:35 PM EDT
Promising Mariners pitching prospect Victor Sanchez died on Saturday night after he was involved in an unfortunate boating accident in February.
Mar 28, 2015, 10:10 PM EDT
Outfielder Nate Schierholtz is a free agent again, opting out of his contract with the Rangers after a disappointing spring showing.
Mar 28, 2015, 9:05 PM EDT
Two baseball superstars put their talented display in spring training action on Saturday afternoon.
Mar 28, 2015, 8:05 PM EDT
More shoulder problems for Jaime Garcia, who has made 16 combined starts since the beginning of the 2013 season.
Mar 28, 2015, 7:15 PM EDT
Shane Victorino didn’t like the way a pair of radio personalities in Boston interpreted his desire to see the Red Sox acquire Cole Hamels from the Phillies.
Mar 28, 2015, 6:25 PM EDT
Giants minor league catcher Matt Paré discussed the thrifty lifestyles minor league players are forced into.
Mar 28, 2015, 5:30 PM EDT
Rodriguez is now batting .306 (11-for-36) with three home runs, a double and a .925 OPS across 15 games this spring.
Mar 28, 2015, 5:18 PM EDT
Lucas Duda is coming off a breakout year with the Mets and the two sides are now discussing a contract extension.
Mar 28, 2015, 4:13 PM EDT
Gregorius injured his wrist Saturday while trying to dive for a ground ball in the second inning.
Mar 28, 2015, 3:40 PM EDT
Doubront really struggled during Cactus League action, allowing nine runs on 17 hits (including two home runs) in seven innings across four appearances.
Mar 28, 2015, 2:51 PM EDT
Freeman owns a 3.33 ERA with a 61/34 K/BB ratio over 70 1/3 innings in the majors.
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