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.

2018 Preview: Oakland Athletics

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Between now and Opening Day, HardballTalk will take a look at each of baseball’s 30 teams, asking the key questions, the not-so-key questions, and generally breaking down their chances for the 2018 season. Next up: The Oakland Athletics.

The A’s have finished last in the AL West for three straight years. If you believe the folks at Fangraphs and Baseball Prospectus and anyone else who makes projections, they’ll either finish in last again or come within a game or two of it. There’s not a lot of suspense to my prediction here — I’ll end up picking them to finish fifth — but the prediction is not really what a preview is about. It’s about the shape of the team and what we can expect in broad brushes.

While I can’t foretell greatness for the 2018 Oakland Athletics, I can’t say the broad brushes are bad. At least if you grade on a curve. It won’t be a good team, but they’ll be worth watching because they have a lot of good, fun and interesting players who are likely to be on that next good Oakland A’s team in the way Stephen Vogt and Brett Lawrie were not.

Their lineup is pretty spiffy for a second division team. Khris Davis, Matt Joyce and new acquisition Jonathan Lucroy are known commodities both inside and outside A’s fandom, but people who don’t pay much attention to the goings on in Oakland may not be fully aware of just how good and promising Matt Olson and Matt Chapman are. Olson hit 24 homers in 59 games last year. That’s not a sustainable pace — the league will figure him out to — but even regression from that will be fantastic. Chapman hit 14 in half a season and played superior defense at third base. He also struck out 92 times in half a season but who’s counting? [editor: everyone counts everything in baseball]. Hey, look, dingers! Yonder Alonso and Ryon Healey are gone from last year’s crew and Stephen Piscotty is new in town. Marcus Semien is a decent bat for a shortstop. All-in-all that’s a lineup that will play, and play very, very well if Chapman and Olson are what they’ve shown themselves to be thus far.

At the risk of criminal understatement, allow me to observe that the starting pitching is not as promising. Sean Manaea and Kendall Graveman are at the top of the rotation. On good teams they’d be in the middle or the back. The rest of their rotation options — Daniel Mengden, Andrew Triggs, Paul Blackburn, who will miss the start of the regular season with a sore forearm — are less-than-impressive. They just signed Trevor Cahill and Brett Anderson from the scrap heap hoping, I guess, to recreate some of that, uh, 2010 magic? 2010 was a long time ago!

Jharel Cotton would’ve been in the mix but he’s now out for the year for Tommy John surgery. A.J. Puk, the A’s top prospect would be a nice midseason upgrade, but he’s hurt. Not seriously, but the A’s will probably be more careful with him now than they would’ve been, which still would’ve been careful. All-in-all, there was a lack of quality arms to begin with, but with the injuries mounting, starting pitching could be a trash fire for the A’s.

The bullpen has a new look with newcomers Ryan Buchter, Yusmeiro Petit and Emilio Pagan joining 2017 in-season additions Blake Treinen and Chris Hatcher. That’s a pretty good and pretty interesting group which was going to see a lot of innings as it was in our new bullpenning era, but now that the rotation looks shaky as hell, they’ll see even more. If you’re curious about the limits of leaning on a bullpen, postseason-style are, Oakland will be running a pretty fun experiment to that end in 2018.

I look at this club’s bats — especially the young guys upon whom its so very easy to project so much promise and optimism, because I’m a sucker for hitting prospects — and think that they can outperform those statsy projections and be better than the Rangers and Mariners. Then I think about how the upside — UPSIDE! — for the rotation is 380 innings from Trevor Cahill and Brett Anderson and I sorta wanna cry.

If the A’s get some breaks and some unexpectedly good (or average) pitching performances, they could certainly finish above the cellar. Perhaps well above the cellar. For now, though, I’m guessing that they’ll be in 80-win territory at best and finish last in a division that does not have any teams totally punting, making for a competitive and, subsequently, tough year.

Prediction: Fifth place, AL West