Jan 23, 2013, 12:52 PM EST
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.
Nov 28, 2014, 4:42 PM EST
It’s one and done in the booth for the old lefty.
Nov 28, 2014, 1:00 PM EST
That is, if he makes the rotation.
Nov 28, 2014, 12:23 PM EST
Crow made the All-Star team as a rookie in 2011.
Nov 28, 2014, 12:00 PM EST
And he’d like you to tell him who’s a better option.
Nov 28, 2014, 11:00 AM EST
He’s reportedly uninjured, though details are scarce at the moment.
Nov 28, 2014, 10:47 AM EST
Barring some trades he’ll fill a middle relief role for the bullpen-rich Royals in 2015.
Nov 28, 2014, 10:15 AM EST
“Their interest in the lefty appears as much opportunistic as enthusiastic.”
Nov 28, 2014, 9:30 AM EST
It’s an artificial turf thing.
Nov 28, 2014, 8:15 AM EST
Won’t somebody think of A.J. Hinch’s children?
Nov 27, 2014, 9:20 PM EST
The AL Central seems to be particularly fond of free agent pitcher Justin Masterson.
Nov 27, 2014, 8:15 PM EST
The Padres have three worthy catchers and all of them are drawing trade interest.
Nov 27, 2014, 7:10 PM EST
Billy Butler, now with the Athletics, thanked Royals fans for an “amazing ride” in Kansas City.
Nov 27, 2014, 6:05 PM EST
A couple more options have appeared on the Marlins’ radar for an upgrade at first base.
Nov 27, 2014, 4:00 PM EST
Your one-stop shop for all of the offseason signings.
Nov 27, 2014, 10:15 AM EST
Martinez was passed over for the manager job in Tampa Bay.
Nov 26, 2014, 10:04 PM EST
Here’s the farewell Instagram post from third baseman Pablo Sandoval, who signed a five-year, $98 million free agent contract with the Red Sox earlier this week …
Nov 26, 2014, 8:18 PM EST
Jackson was limited to 11 minor league games in 2014 due to a right wrist injury that ultimately required surgery.
Nov 26, 2014, 6:43 PM EST
From FOX Sports’ Ken Rosenthal comes word that the Padres have shown interest in trading for Dodgers outfielder Matt Kemp …
Nov 26, 2014, 5:10 PM EST
The Dbacks were not in the picture until very recently. But better late than never.
Nov 26, 2014, 4:25 PM EST
Since there’s no such thing as a stupid question …
- Yasmany Tomas signs a six-year, $68.5 million deal with the Diamondbacks 86
- No, the Red Sox signing Pablo and Hanley is not proof that baseball needs a salary cap 163
- Red Sox announce four-year, $88 million deal with Hanley Ramirez, DFA Juan Francisco 35
- The Cubs have offered Jon Lester “north of $135 million” 68
- Pablo Sandoval’s deal: five years, $98 million plus an option 43
- Kyle Seager, Mariners close to $100 million extension 26
- The 2015 Hall of Fame ballot is out — Randy Johnson, Pedro Martinez are new on the ballot 286
- So what would the Red Sox look like with Hanley Ramirez and Pablo Sandoval? 49
- The 2015 Hall of Fame ballot is out — Randy Johnson, Pedro Martinez are new on the ballot (286)
- No, the Red Sox signing Pablo and Hanley is not proof that baseball needs a salary cap (163)
- More Hall of Fame ballots like Adam Rubin’s please (140)
- Report: Pablo Sandoval chose the Red Sox over the Giants because he felt disrespected (138)
- UPDATE: The Pablo Sandoval-Red Sox deal is done, pending a physical (133)