“Anybody want to watch the World Series?”
-From the movie “One Flew Over the Cuckoo’s Nest.”
One of these days, it may cost almost as much to watch the Dodgers from home as it does to go out to a live game.
In an odd twist, Bud Selig(left) forced owner Frank McCourt out of baseball by nixing McCourt’s $3 billion television deal with FOX. Now, FOX will be forced to pay more than twice that to maintain TV rights.
The Los Angeles Dodgers, who fetched more than $2 billion dollars when former owner Frank McCourt was forced to sell, are reportedly going to be offered at least $6 billion by the local FOX Sports cable network in exchange for television rights. So where will FOX get the money to pay the Dodgers? Get out your wallets, Dodgers fans.
FOX cable has been the cable network of the Dodgers for the last sixteen years. Not including nationwide telecasts on ESPN or the FOX broadcast network, FOX cable currently broadcasts about 66% of the Dodgers games during the regular season. The remaining games are broadcast by local independent station KCAL. All you have to do is buy basic cable and you’ll get just about all 162 games a year.
FOX has been paying the Dodgers about $40 million dollars a year on a contract that expires at the end of the 2013 season. This new 25-year deal places the annual outlay at somewhere north of the $250 million mark. It would seem natural that the old Ponzi scheme will apply for us working stiffs that want to watch the games.
It was back in 1920 that a man named Charles Ponzi hit upon an idea that has grown so big; his name is part of our modern lexicon. Ponzi decided to promise people if they invested their money with him, he could give them returns one could only dream about. The way it worked was John Doe #1 turned over his money to Ponzi. Ponzi would then find John Doe #2 and get some money from him to invest. Once #2 wrote the check, Ponzi would cash it and turn that $$ over to #1. The same will probably hold true here.
FOX will decide to up their price to the local cable stations that, in turn, will simply pass the buck onto subscribers. Consumers may be upset but FOX could not afford to let the Dodgers walk away and begin their own network.
FOX lost a ton of winter advertising revenue this year when both the Los Angeles Lakers and UCLA and USC football finished up their contracts with FOX and began their own networks. With the NHL strike, FOX has taken to televising year old Los Angeles Kings playoff games and tons of horse racing since October. Sure, FOX still has the Angels but the Dodgers garner twice the television ratings than their neighbors to the south.
This deal brings to mind a strange twist in the Rupert Murdoch-led FOX kingdom story. When former owner Frank McCourt was attempting to hold onto to the Dodgers, he claimed he had worked out a $3 billion deal with FOX for broadcast rights which in turn would give McCourt the funds needed to get the team out of bankruptcy. But Bud Selig quashed the deal as a way to get rid of McCourt. The team was sold and now poor(?) FOX is now in the position of doubling the ante. One other funny subplot is that FOX owned the Dodgers from 1998 to 2004 but sold them to McCourt because Murdoch decided player salaries were out of control.
I tell you, last year, you could pay as little as $5 for a decent seat at Dodger Stadium. Meanwhile, Time Warner cable recently added a “no-reason” $3.95 per-month fee for those customers who have both the TV package and internet through them. It seems pretty clear that fee was added in response to Time Warner needing to pay the Lakers about $3 billion for the new Lakers network over the next couple of decades. If this FOX-Dodgers deal goes through, it wouldn’t surprise me to see twice that amount finding a way onto my bill come next year. Maybe it is time to head on out to Dodger Stadium and save a few bucks.