The Los Angeles Dodgers formally announced a deal with Time Warner Cable on Monday to create a new TV channel that people familiar with the situation say assures the team more than $7 billion over 25 years. That is double what Major League Baseball thought the local TV rights were worth when the team was sold out of bankruptcy just last year.
The gap will be the subject of discussions going forward as the league attempts to haggle over how much of that extra money will go into a revenue-sharing pool to help out baseball's lower-revenue franchises.
MLB calculates that 34 percent of a team's local revenue, after subtracting costs, is available for redistribution throughout the league. When the Dodgers were mired in bankruptcy last year, the league agreed to value the potential TV rights of any future deal at $84 million the first year, rising 4 percent every year thereafter. Over 25 years, that is estimated TV rights revenue of $3.5 billion.
The actual TV rights contract represents...