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

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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.

The Giants are interested in Evan Longoria

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Bob Nightengale of USA Today says that the San Francisco Giants “have keen interest” in Rays third baseman Evan Longoria.

Longoria is coming off his worst season as a major leaguer, having hit .261/.313/.424 with 20 homers in 2017. He’s also still owed $86 million through 2022. Which, back when the deal was signed seemed like quite a bargain for the Rays — and likely has been over the duration of the contract — but now seems somewhat steep for the 32 year-old third baseman. That said, the Giants currently have Pablo Sandoval penciled in at third base on their depth chart, so Longoria would definitely be an upgrade, even if 2017’s dip wasn’t just a blip.

Nightengale says that for the Giants to take on Longoria, the Rays would have to take on a high salary veteran such as Denard Span or Hunter Pence. Span is owed $9 million in 2018, with a $4 million buyout on a $12 million option for 2019. Pence is owed $18.5 million in 2018 in the final year of his contract and has a full no-trade clause.

If he stays with the Rays, Longoria will achieve 10-5 rights — full no-trade protection due to being a ten-year veteran with five years of service on the same club — so if the Rays are going to move him, it’ll be much easier this offseason, not once the 2018 season begins.