Fees for TV Rights Help Foot Bill for Big Names in Sports

With each passing year, the high cost of top sports talent is being met more and more out of TV rights fees, according to cable sports executives.

There are currently 20 Major League Baseball players earning $2 million or more a year, including the Dodgers’ Eddie Murray and Orel Hershiser. The Lakers’ Magic Johnson earns more than $3 million a year and, in one of the most highly publicized contract negotiations of the decade, Wayne Gretzky became a Los Angeles King last September for a cool $3 million a year.

“When (Kings owner) Bruce McNall went after Wayne Gretzky, the rights fees that we paid the Kings went up,” said Prime Ticket’s John Severino. So did the number of opportunities Prime Ticket has of cablecasting Kings games.

The bottom line: Prime Ticket contributed to the whopping $34 million that McNall paid the Edmonton Oilers and Gretzky in order to import the NHL star to Los Angeles for the next eight years but, in exchange, Prime Ticket has more games to air, more commercial advertising time to sell and a big-name sports star as a drawing card.

One subtle potential of this new dependence on cable TV for rights money is the ability to influence or even rebuild a team, according to Severino. If cable could come up with enough money to lure top-notch players to a team, cable owners would be in a powerful position during rights contract negotiations.

“I can foresee the possibility of us, say, getting a Michael Jordan and a Patrick Ewing to join the Clippers at contract time,” he said. Both the Clippers and Prime Ticket would benefit, he reasoned.

The Gretzky gamble has already begun to pay off, Severino said, pointing to the Kings’ fourth-place NHL finish this year, up from last year’s 14th-place finish. Interest in hockey on cable has increased commensurately, on Z Channel as well as Prime Ticket. The newly popular Kings games broadcast over rival Prime Ticket were, ironically, a big boost for the competition, since Z Channel had this year’s rights to the Stanley Cup playoffs.

“We have Prime Ticket to thank for that,” said Z Channel President Joseph Cohen.