The Los Angeles Dodgers are apparently ready to collect their windfall.
Multiple reports Tuesday indicate the Dodgers and Time Warner Cable have reached an agreement to move the team’s TV broadcasts to a regional sports channel on TWC similar to the arrangement between the Lakers and Time Warner. The deal will reportedly bring the Dodgers in excess of $7 billion for the length of the contract (believed to be 25 years) which would begin in 2014.
That would make it the largest team television deal in sports history.
The Dodgers, Time Warner and Major League Baseball declined to comment and the Dodgers have not submitted the deal to MLB for approval. Industry sources also indicate the team has not informed Fox that it has reached agreement to take its broadcasts elsewhere, a requirement included in their current contract with Fox, which runs through the 2013 season.
One report indicated the deal would be officially announced Thursday.
The new deal (a portion of which will be subject to baseball’s revenue-sharing system) represents a massive revenue advantage for the Dodgers’ new owners — one they were clearly counting on while upping the team’s payroll to over $220 million for 2013 (the highest in baseball). The Dodgers received $40 million for their local TV broadcast rights in 2012; the new deal with Time Warner could have an annual average value of at least $280 million.
That number would far exceed the local TV broadcast revenue received by any other MLB team. The Angels reached a new TV deal with Fox in December 2011 that will bring them $3 billion over 20 years (an average of $150 million annually). According to a Forbes magazine report, the New York Yankees received $90 million in rights fees from YES Network in 2011 — but also own 34 percent of the network, which generated $224 million in operating income that season.
After adding the Lakers channel (and a second Spanish-language channel devoted to the NBA team) this season, Time Warner had difficulty working out agreements with some cable companies in Southern California, causing fans to miss some games. A new Dodgers channel would require new distribution deals with those same cable providers.
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