Chad Moriyama Dodgers, Sabermetrics, Scouting
The Dodgers have reached a deal with Time Warner Cable on a television contract worth between $6 billion and $7 billion dollars, according to Bill Shaikin of the Los Angeles Times, but that’s not the most interesting part to me.
The Dodgers have agreed with Time Warner Cable on a new television contract that will provide the team with a channel of its own, according to two people familiar with the deal but not authorized to discuss it.
The Dodgers’ deal is expected to be finalized and announced Thursday. The team has not yet submitted the deal to Major League Baseball for approval, but the control of the channel is expected to rest with the Dodgers’ owners rather than with Time Warner.
The Time Warner Cable deal is believed to be worth between $6 billion and $7 billion.
Most are focused on the staggering amount of money, which is certainly amazing, but we already sort of knew the total would be around there since it was rumored that the team was close with FOX on a deal. However, the news to me is that the team will now have its own channel on Time Warner Cable.
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I’m interested for a couple of reasons: one revolves around whether or not this means the Dodgers assume part ownership of the channel, like the courts and MLB apparently want them to (increases their risk), and one revolves around how the hell they are going to fill that channel with content.
From the ownership perspective, does this mean the Dodgers will be forced to take on a share? And if so, how much?
The league believes — and there are indications the court might agree — that the Dodgers must take some element of risk with any money not subject to revenue sharing.
In other words, this deal seems far from over, as there are still a lot of questions to be answered and a lot of details still to come out. Nevertheless, this eases concerns about the payroll going forward, I think.
From the programming perspective, how does this work? Have you ever watched Prime Ticket when there’s no Dodgers on? There’s basically nothing on that channel, so I don’t understand why the team needs their own channel or what they’re going to do with the rest of the time blocks. My hope is that they come up with exclusive content and interesting programs, but judging by the current state of television, I highly doubt it.
This can all be redeemed by giving A.J. Ellis his own show for “Between Two Palm Trees“, where he continues to troll teammates.
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Update
Bill Shaikin now writes that the deal is in the $7 billion to $8 billion range.
Thought MSTI noted the dealing being worth between 7 and 8 billion? Ah, whatever, what’s a few billion between friends?
Dunno, Bill Shaikin said 6-7 in print, so I’m going with that.
As always with these things, there are so many moving parts. The Dodgers (baseball team) obviously don’t want risk and wants to maximise dollar signs. However, Dodgers (owners/GBM) probably prefers an ownership stake in the TV station because even though it does come with risks, it also presents a much more massive revenue upside.
So GBM might actually be okay with a significant stake then? Because that’s what MLB/bankruptcy court might say.
I think from the Shaikin article, basically the structure of the new channel is that the Dodgers (be it the corporate entity which owns the team or the actual team or most likely some newly created corporation which would hold the media rights) are essentially partnering with TW and that’s how the joint venture is formed. E.g. Dodgers provide the media rights for which they are paid X up front dollars and Y ad revenue dollars that Time Warner sells on behalf of the JV.
For me, and I’m not media expert, but that was always the scenario that would present the most ultimate upside for GBM.
Think of it this way, everybody knows that live sports is pretty much the only game that’s left in town anymore. (Hell, a big part of the reason why my monthly cable bill is around $100 is for the sports.) So this way, for GBM, who’s been getting into media a big way (note that they also recently purchased Dick Clark Productions, which is also all about live events), they are locking up premium content and a fixed price.
If we think of GBM and Dodgers are separate entities, and GBM is paying the Dodgers a fixed amount $250MM/yr over 20 years. (let’s just say that’s what it is.) GBM is free to capture everything that the channel generate above $250MM.
Interesting.
I haven’t a clue what they show on there, besides the pieces i’ve seen on Dodger Stadium history. I do find it hilarious how TWCSN has all these Laker shows and the team is a big flop :P How are the ratings on those? I’ll record everything on this channel if it means good things for the club, a new dawn is upon us!
I think that the ability to avoid a big revenue sharing bill is worth the added risk alone, but I also thought about the lack of programming to fill a whole channel and it occurred to me that Guggenheim was looking at buying AEG… Maybe they would add an NFL team to the network one day?
Well that would certainly make things interesting.
Can’t imagine they would enjoy the scheduling conflicts though.
I was hoping that Time Warner would just add them to TWCSN but I guess that’s not gonna happen. That would be my dream channel.
it really surprised me that they’re devoting yet another channel to the Dodgers. Baseball in the spring/summer basketball in the fall/winter is the ideal sport channel scheduling. This perplexes me somewhat.
Part of an ownership stake requirement?
Ya, the current TWCSN channel is a JV between the Lakers and Time Warner and you may be right that the Buss family/Lakers don’t want to dilute their ownership percentage (by selling parts of it to the Dodgers) and so TWC had to go and create a new channel for the Dodgers.
To me that smacks of poor management on the part of TWC. Everybody could see the writing on the wall last year that the Dodgers’ rights were about to come onto the market.
Admittedly, I’m out of depth commenting on media rights stuff, but yeah, just seemed odd.
That was exactly my thought.