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Could the Dodgers’ giant TV deal be the beginning of the end for giant TV deals?


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.

Jason Kipnis injured his ankle celebrating the pennant with Francisco Lindor

TORONTO, ON - OCTOBER 17:  Jose Ramirez #11, Francisco Lindor #12, Jason Kipnis #22 and Mike Napoli #26 of the Cleveland Indians celebrate after defeating the Toronto Blue Jays with a score of 4 to 2 in game three of the American League Championship Series at Rogers Centre on October 17, 2016 in Toronto, Canada.  (Photo by Vaughn Ridley/Getty Images)
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Indians second baseman Jason Kipnis tweeted on Sunday, “Got a little too close to [Francisco Lindor] during the celebration!! Freak accident but should be good to go by Tuesday! #cantkeepmeoutofthisgame!”

Per MLB.com’s Jordan Bastian, manager Terry Francona said Kipnis is dealing with a low ankle sprain, but he’s expected to be ready to go when the World Series begins on Tuesday. Kipnis went through fielding drills on Sunday.

Kipnis is hitting .167/.219/.367 with a pair of homers and four RBI in eight games this postseason.

Terry Francona sets Indians’ World Series rotation for first three games

TORONTO, ON - OCTOBER 18:  Corey Kluber #28 of the Cleveland Indians throws a pitch in the first inning against the Toronto Blue Jays during game four of the American League Championship Series at Rogers Centre on October 18, 2016 in Toronto, Canada.  (Photo by Vaughn Ridley/Getty Images)
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Bob Nightengale of USA TODAY Sports reports that Indians manager Terry Francona has set his starting rotation for the first three games of the World Series against the Cubs. Corey Kluber will start Game One, followed by Trevor Bauer and Josh Tomlin for Games Two and Three, respectively.

Kluber, the ace of the staff, has had a terrific postseason. He’s made three starts with a 0.98 ERA and a 20/7 K/BB ratio in 18 1/3 innings. The Indians won two of his starts — Game Two of the ALDS and Game 1 of the ALCS.

Bauer was unable to make it out of the first inning of his ALCS Game 3 start against the Blue Jays after the stitches on his pinky opened up and caused blood to pour out. He suffered the injury repairing one of his drones, which he builds as a hobby. Bauer insists he’ll be good to go in Game Two, though he also insisted that the injury wouldn’t be an impediment against the Jays.

Tomlin has made two solid starts for the Indians, allowing a total of three runs over 10 2/3 innings. The Indians won both games he started, Game 3 of the ALDS and Game 2 of the ALCS. MLB.com’s Jordan Bastian notes that if Bauer can’t go in Game Two, Tomlin will be moved up to start in his place.