Posted January 22, 2013 on AP on Fox
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 a huge mark-up from that initial forecast. It could be a boon to the league, depending on how much of that revenue its internal rules committee says is subject to sharing. The contract is also a big win for the owners, including Guggenheim Partners and Magic Johnson, who bought the team out of bankruptcy last year for $2 billion from Frank McCourt. The broad strokes of the deal terms were confirmed by three people who requested anonymity because they were not authorized to speak about them publicly. MLB spokesman Pat Courtney wouldn't comment on the deal, but said the league would need to approve it. ''We are still awaiting further information,'' he said. If approved, fans in the Los Angeles area and Hawaii would have to switch from watching Dodgers games on FOX Sports' regional sports channel Prime Ticket after the 2013 season. The high price tag also means monthly TV bills are likely headed upward, in the Los Angeles market and elsewhere. ''There's no question that there's a huge problem with sports rights,'' said Derek Baine, a senior analyst with research firm SNL Kagan, adding that one big question is ''when is this going to stop?'' Baine also blamed higher TV bills on the proliferation of new channels and rising fees for once-free TV station broadcasts. Time Warner Cable Inc., which agreed to pay the fees, is now aiming to cut deals with other local TV distributors to offset the cost, which could spread any fee hikes across the TV landscape, including in other markets. The new channel, SportsNet LA, will be launched and operated by a subsidiary of the team formed in December called American Media Productions LLC. Along with selling the channel to other TV distributors, Time Warner Cable will have the exclusive advertising rights and certain branding and programming rights. It will also offer production and technical services outside of regular game coverage, which will be handled by the team's subsidiary. Ownership of the network was important, according to the people familiar with the situation, because the league allows teams to reduce their revenue-sharing contributions by the cost of running their own TV networks. The contract marks the second major sports rights deal in three years for Time Warner Cable, which bought the rights to Los Angeles Lakers games in 2011 and launched regional sports networks covering them last year. After paying an estimated $3 billion for the Lakers rights for 20 years, Time Warner Cable eked out higher fees from other TV distributors in Los Angeles, including DirecTV. The cable operator has said it is bidding for long-term sports carriage agreements to give itself certainty about rising sports costs. ''This deal, like our Lakers deal, furthers our efforts to attain greater certainty and control over local and regional sports programming costs,'' David Rone, president of Time Warner Cable Sports, said in a statement. However, Time Warner Cable is not the only network operator looking to recoup the cost of sports rights by hiking fees on other TV distributors. The New York Yankees' YES Network, which is part owned by News Corp.'s Fox network, is also expected to seek a fee hike from Time Warner Cable when that agreement expires early next year. Dodgers owner Mark Walter said in a statement, ''we concluded last year that the best way to give our fans what they want -- more content and more Dodger baseball -- was to launch our own network.''
THE BACKYARD
BEST OF MAXIM
AROUND THE WEB
RELATED ARTICLES

We figured Don Mattingly would be managing for a contract in 2013 and now it’s all but official

Dodgers fans have assumed for a while now that 2013 would determine how much longer Don Mattingly would be with the club (maybe Ned Colletti as well), and now that’s all but official. Last fall, Mattingly politely asked the club to exercise its one-year option before this final year of his contract. The Dodgers politely refused. He will thus begin the summer as a lame duck, except...

Los Angeles Dodgers channeling the money

Former Dodgers owner Frank McCourt may have been driven out of baseball but his dream lives on. The Dodgers new TV deal should make it easy to pay the contracts of Clayton Kershaw (left) and Matt Kemp. McCourt had always wanted to take a page from Yankees owner George Steinbrenner’s playbook and start the Dodgers own network. In 1999, Steinbrenner created the YES network and made...

Podcast: 'Dugout Blues' episode 20 - Blake Smith interview, Koufax, TV deal

On this episode of "Dugout Blues," Jared Massey (L.A. Dugout) and I have our first guest in the history of the podcast: Dodgers' outfield prospect Blake Smith. Smith joined us to talk about his career to this point, what he expects for 2013 and a bit about some of the pitchers he faced last season in Double-A. We talk about the Dodgers bringing back Sandy Koufax...

Dodgers' full-season minor league team preview: Great Lakes Loons

In the first of a four-part series, I'm going to look at my projected rosters for the full-season Dodger minor-league affiliates. First up, the Great Lakes Loons (Low-A). The Loons went 67-73, which placed them sixth in the Midwest League's Eastern Division. The team was led by hitters like O'Koyea Dickson, Scott Schebler and Joe Winker and pitchers Arismendy Ozoria...

Scott Elbert Has Surgery

For the second time in five months, lefty reliever for the Los Angeles Dodgers had elbow surgery, according to the team. Neal ElAttrache, the teams Orthopedist surgeon, operated on Elbert for approximately forty minute. He found and repaired some cartilage damage that hadn’t been detected previously. Elbert will take it easy for a few days and then begin a physical therapy regiment...

Sandy Koufax to join Dodgers as special adviser

Hall of Fame pitcher Sandy Koufax is going to work for the Los Angeles Dodgers as a special adviser. The team announced Tuesday that the 77-year-old Koufax would join them. Koufax will be a special adviser to team chairman Mark Walter. The former Dodgers great also will work with pitchers during spring training, a role he's held for several years. Koufax spent 12 seasons in...

Sandy Koufax to be Dodgers' special adviser

LOS ANGELES (AP) -- Hall of Fame pitcher Sandy Koufax is going to work for the Los Angeles Dodgers as a special adviser. The team announced Tuesday that the 77-year-old Koufax would join them. Koufax will be a special adviser to team chairman Mark Walter. The former Dodgers great also will work with pitchers during spring training, a role he's held for several years. Koufax...

Koufax returns to Dodgers as Special Advisor

LOS ANGELES Hall of Famer Sandy Koufax will return to the Los Angeles Dodgers as Special Advisor to Dodgers Chairman Mark Walter in 2013, it was announced. Koufax will attend a portion of Spring Training to work with Dodgers pitchers and consult with the team throughout the year. The Dodgers are thrilled to have Sandy back with the organization, Dodgers President and CEO Stan...

Matt Kemp has a huge tattoo of his grandparents on his chest (Picture)

In terms of honoring your grandparents, Los Angeles Dodgers outfielder Matt Kemp has them close to his heart in the form of a massive chest tattoo. Check out the below image which features his grandfather Vernon Dukes and his grandmother, Doris: Nice tribute Matt, nice tribute.... (Courtesy of Deadspin)

Report: TWC wins Dodgers TV deal

Time Warner Cable has won a contract to carry Los Angeles Dodgers games for at least the next two decades starting in 2014, according to a person familiar with the matter, who was not authorized to speak publicly. The deal has not yet been finalized, although it is to be announced within days. FOX Sports currently carries the team's rights. The Los Angeles Times earlier reported...

AP Source: Time Warner Cable wins Dodgers TV deal

Time Warner Cable has won a contract to carry Los Angeles Dodgers games for at least the next two decades starting in 2014, snatching the games away from Fox Sports after this year's baseball season ends. That's according to a person familiar with the matter, who was not authorized to speak publicly. The deal has not yet been finalized, although it is to be announced within...

Dodgers, Time Warner agree to carriage deal

The saga of the Los Angeles Dodgers TV rights has finally ended, and the grand champions (aside from the Dodgers, of course) are Time Warner, who Bloomberg is reporting have won the rights to air the team's games starting in 2014. While the exact terms of the deal are not yet known (Bill Shaikin of the LA Times reports that the deal will be between $7 and $8 BILLION DOLLARS...
Today's Best Stuff
For Bloggers

Join the Yardbarker Network for more promotion, traffic, and money.

Company Info
Help
What is Yardbarker?

Yardbarker is the largest network of sports blogs and pro athlete blogs on the web. This site is the hub of the Yardbarker Network, where our editors and algorithms curate the best sports content from our network and beyond.