What do I care how much someone paid for the Dodgers? What’s the difference to me if they sold for $1.1 billion, $2.15 billion or $3 trillion?
I hear that a lot. I hear that too much. Hear it from knowledgeable people.
The public should care what the team sold for because somewhere down the line, it will pay the toll. Not this year. Maybe not next year. But eventually, the price being paid out on top, filters down to the fan. Eventually, it always does.
One of the first things Guggenheim Baseball Management is going to do is figure out what it wants to do with its next media rights package. The was the driving economic force behind the record sale.
The present TV deal runs through the 2013 season, but current rights-holder Fox has exclusive negotiating rights for a new contract through November.
The Dodgers can re-up with Fox or wait until after November and let Fox, Time Warner and the rest get into a bidding war. You know, an auction!
Or they can start a regional sports channel. Magic Johnson recently announced he would launch Aspire, a network featuring uplifting images of African-Americans through Comcast, so already there is some experience there.
The Dodgers’ currently pay Fox approximately $38 million per year to broadcast their games. Some now estimate their next contract could approach $4 billion for 15 years – that’s an average of $267 million per season.
Think the rights holder is going to pay seven times what it did previously and not pass the cost on? Watch that cable bill kiddies. It’s headed north like strapped to an F-1.
The Wall Street Journal estimated that if the Dodgers started their own network, similar to what the Yankees did with YES, it could command a monthly fee of $3.50: “That could translate into nearly $300 million in revenue annually before the network sells a single ad spot.”
Wrote The Times in an editorial: “The insidious thing about these increases is that they’re applied to just about everyone’s pay-TV bill.”
Dodgers fan or not, sports fan or not.
Figure the team payroll will go up. Figure the new owners will spend maybe $200 million in stadium improvements. Figure a day of reckoning is coming to the consumer, the fans.
And here’s a video from The Times’ Joe Flint, on how the cost of a new rights deal could be passed on:
Frank McCourt laughs all the way to the bank