With a combination of shrewd business sense and fantastic timing, Angels owner Arte Moreno parlayed an escape clause in his television contract into the billions that enabled his team to sign Pujols and C.J. Wilson on Thursday, for almost twice what Moreno paid to buy the team.
The Angels have agreed to a new deal with Fox Sports worth at least $3 billion and expected to cover 20 years, two parties familiar with the deal said Thursday. The parties declined to be identified because the deal has yet to be officially announced.
Spokesmen for Fox and the Angels declined to comment.
Moreno last year opted out of a 10-year, $500-million contract with Fox, according to sports media consultant and former NBA TV President Ed Desser.
Desser, testifying Thursday in the Dodgers' bankruptcy case, said the Angels and Fox agreed at the time to a one-year extension while the parties negotiated a new deal.
In February, the Lakers bolted Fox for Time Warner Cable. In June, Commissioner Bud Selig rejected a proposed 20-year, $3-billion deal between the Dodgers and Fox, a decision that McCourt said pushed the team into bankruptcy. McCourt has since agreed to sell the team.
The possibility of the Dodgers' following the Lakers to Time Warner Cable left Fox facing the dilemma of satisfying the Angels or trying to run Fox Sports West and Prime Ticket with no baseball team — that is, no major summer programming — on either channel. The Lakers are set to leave Fox after this season.
Fox owns the Dodgers' rights through 2013. However, in recent weeks, as McCourt pushed for an accelerated auction of the Dodgers' television rights, Fox increased the value of a new Angels deal beyond what the company had offered the Dodgers.
The Rangers agreed with Fox last year on a new contract worth an average of $80 million per year. The Angels' deal is expected to top that in average annual rights fees — the rejected Dodgers' deal had an average annual rights fee of about $85 million — and include an ownership stake in FSW.
Such a stake can be held as an investment, sold for more money or leveraged — as a hypothetical example — to finance a new or renovated stadium. Fox would have provided the Dodgers with a stake in Prime Ticket as part of their deal. However, the Rangers' new contract does not include an ownership share of their Fox Sports affiliate.
Moreno spent $183.5 million to buy the Angels in 2003. On Thursday, he spent $331.5 million on Pujols and Wilson.
In addition to funding the Angels' free-agent shopping spree, Fox is likely to benefit from it as well. To sustain interest in Southern California's crowded sports market, the Angels need star power — and in Pujols they have a superstar.
"It's sort of like the Mets versus the Yankees," says Adam Swanson, a media analyst with SNL Kagan. "You have fans on both sides of the fence. [Pujols] is going to draw more viewers and draw higher ticket sales. So the opportunities are there."
The Angels had the second-lowest local television ratings among major league teams last year, according to Sports Business Journal. In addition to the potential for high ratings with Pujols and the Angels, the new TV deal also gives Fox guaranteed programming and prevents Time Warner Cable from running the table with Southern California's top franchises.
"It sort of secures Fox for a little bit," Swanson said. "They don't have to worry about the team going somewhere else. And they have access, then, to a whole lot of content."
"Time Warner [Cable] is definitely putting their footprint on the L.A. market."
Fret not, Dodgers fans. The bidding between Fox and Time Warner Cable for the Dodgers' television rights is about to start, and the over-under is $4 billion.
Times staff writer Joe Flint contributed to this report. Shaikin reported from Wilmington, Del. Baxter reported from Los Angeles.