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.
Aug 22, 2014, 11:55 PM EDT
Garrett Richards had surgery to repair a torn patellar tendon in his left knee, meaning he’ll be out between six and nine months.
Aug 22, 2014, 11:05 PM EDT
The frustrating blackout restrictions could come to an end as early as 2015, according to Maury Brown of Forbes.
Aug 22, 2014, 10:10 PM EDT
Felix Hernandez has struck out 200-plus batters in each of the last six seasons, something no other starting pitcher will have done when the season is over.
Aug 22, 2014, 9:17 PM EDT
Mike Minor is on point in Cincinnati against the Reds on Friday night.
Aug 22, 2014, 9:15 PM EDT
The Giants don’t have any plans to move Buster Posey out from behind the plate just yet, even though his numbers are much better as a first baseman.
Aug 22, 2014, 8:20 PM EDT
The Dodgers’ Triple-A affiliate will reportedly move from Albuquerque, New Mexico to Oklahoma City, Oklahoma for the 2015 season.
Aug 22, 2014, 7:25 PM EDT
Kyle Lohse was dealing with a sore right ankle, but is expected to rejoin the Brewers’ rotation on Monday to start against the Padres.
Aug 22, 2014, 6:33 PM EDT
Manny Machado’s season is likely over, as he is expected to undergo season-ending knee surgery within a week, according to a report.
Aug 22, 2014, 6:20 PM EDT
According to Peter Gammons, the Orioles and Yankees are “claiming everyone” on waivers, which will make it difficult for the Angels to improve their starting rotation after losing Garrett Richards.
Aug 22, 2014, 5:28 PM EDT
His latest, a solo shot off Orioles right-hander Kevin Gausman.
Aug 22, 2014, 3:45 PM EDT
Sometimes the life of a player with a minor-league option remaining just isn’t fair.
Aug 22, 2014, 3:36 PM EDT
One window doesn’t work and there is no air conditioning. It has 166,000 miles on it. Which, actually, isn’t that bad. Hmmm . . .
Aug 22, 2014, 3:19 PM EDT
Oakland’s outfield depth just got a little stronger with Craig Gentry coming off the disabled list after missing the past month with a broken hand.
Aug 22, 2014, 2:57 PM EDT
Seven games in ten days for the AL West leaders
Aug 22, 2014, 1:50 PM EDT
Machado suffered a sprained right knee on August 11 and the Orioles have mostly been using Chris Davis at third base in his absence.
Aug 22, 2014, 12:49 PM EDT
This has been such a fun story so far. So why NOT throw politics into it?
Aug 22, 2014, 11:50 AM EDT
Robinson Cano has a $240 million contract, his new team has a better record than his old team, and he’s hitting .329 with an .865 OPS that’s slightly above his career mark.
Aug 22, 2014, 11:33 AM EDT
Can he make it to the bigs on a new path for a third time?
Aug 22, 2014, 11:19 AM EDT
If any team is going to keep a manager after four straight 90-loss seasons the Twins are the one to do it.
Aug 22, 2014, 11:01 AM EDT
The Red Sox paid a lot of money to get this guy. Expect him in the Sox’ outfield early next season.
- Mike Minor loses his no-hit bid with two outs in the eighth 4
- Manny Machado to undergo season-ending knee surgery 25
- The Cubs grounds crew was short staffed because the Cubs were trying to avoid Obamacare 219
- Cuban outfielder Rusney Castillo to sign with the Red Sox for $72 million 95
- And That Happened: Thursday’s scores and highlights 31
- The Nationals extend their winning streak to 10 games with another walk-off victory 12
- Garrett Richards out 6-9 months with torn patellar tendon 14
- A pitch clock in Major League Baseball? No thanks. 92
- The Cubs grounds crew was short staffed because the Cubs were trying to avoid Obamacare (236)
- Mike Matheny addresses turmoil in Ferguson: “It’s a sad situation. It’s a tough situation for our city” (127)
- Cuban outfielder Rusney Castillo to sign with the Red Sox for $72 million (96)
- A pitch clock in Major League Baseball? No thanks. (92)
- Even if he’s reinstated, does Pete Rose make the Hall of Fame? (86)