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.

Report: White Sox acquire Yonder Alonso from Indians

Yonder Alonso
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The White Sox have reportedly picked up first baseman Yonder Alonso from the Indians, according to Stadium. The return for Alonso is expected to be nothing more flashy than a “fringe prospect,” though the minutiae of the deal is still pending a formal announcement from both teams.

Alonso, 31, inked a two-year deal with the Indians during the 2017 offseason. His first campaign with the club yielded a modest .250/.317/.421 batting line, 23 home runs, .738 OPS and 0.7 fWAR in 574 PA. The real boon for the White Sox may not be a passable veteran bat, however, but something more intangible — like Alonso’s clout with his brother-in-law and highly-coveted free agent slugger, Manny Machado.

While Alonso’s 2018 output represented a significant decline from the career-best numbers he posted in 2017, he’s still a solid contributor at the plate and, more importantly, slated to remain under team control for the next two years with just $8 million owed in 2019 and a $9 million option in 2020. As MLB.com’s Anthony Castrovince notes, the $17 million the Indians just erased from their payroll should give them enough room to accommodate the contracts for right-handers Trevor Bauer and Corey Kluber — a bonus regardless of what they happen to get in the trade.