Dodgers' possible new TV Contract

[Patrick425]

I'm sure many of you have seen this. Anyone have any idea what the current Brewers contract is with Fox? I believe they extended it sometime in 2009 and it's not made public, but I thought I remember some sources saying it was around $15mil/yr. This new deal for the Dodgers, if finalized, would amount to $240 million per year:

 

http://www.latimes.com/sports/dodgersnow/la-sp-dn-dodgers-fox-sports-6-billion-tv-deal-20121125,0,4821671.story

 

According to this article the Dodgers would have more revenues from their TV contract alone than 26 other clubs have in entire revenue (Yankees, Boston, and Cubs would be the only teams not on that list)

 

http://sports.yahoo.com/news/dodgers---7-billion-tv-deal-will-widen-chasm-between-mlb-s-rich-and-poor-040842261.html

 

Edit: Not sure where I got the $15mil/yr for the Brewers. I thought someone on one of the threads on this site stated that. However, I was able to locate an old thread that mentioned talked about the Brewer's TV contract and it seems to be a mystery. The only "guess" that one poster made was somewhere between $30mil and $50mil. Still, a far ways from $240mil.

[gypcasino]

This article from earlier this year puts the Brewers at $12 million from FSN

http://www.cleveland.com/tribe/index.ssf/2012/01/the_big_picture_is_tv_rights_m.html

[dlk9s]

Gotta love the economy of Major League Baseball. So healthy.

[monty57]

...and a NY Times article reported the new deal will roughly triple that, ergo the estimate of around $30MM for the new deal.

[logan82]

...and a NY Times article reported the new deal will roughly triple that, ergo the estimate of around $30MM for the new deal.

Link please. I would like to know the source of the quote saying that the Brewers will triple their local TV revenue. With all the back and forth over the last couple years I want to know who the information was attributed to.

[owbc]

Remember, 1/3 of the Dodgers' TV deal goes into the shared pool and the luxury tax is quite steep at high payrolls. The Brewers might end up making more money off other teams' TV deals than they do from their own. So it's not like we are going to start seeing $200 million+ payrolls all over the place.

 

Besides, now that the steroid era is essentially over, free agent acquisition isn't what it used to be. By the time a player hits the free agent market, his best years are mostly behind him.

 

On a somewhat-related note, one of the main reasons why sports on TV are becoming so valuable to advertisers is that the majority of the audience watches the game live. That isn't the case with many other shows (although I wonder how long it will be until the DVR doesn't let you fast forward through the commercials).

[Patrick425]

Remember, 1/3 of the Dodgers' TV deal goes into the shared pool and the luxury tax is quite steep at high payrolls. The Brewers might end up making more money off other teams' TV deals than they do from their own. So it's not like we are going to start seeing $200 million+ payrolls all over the place.

 

Besides, now that the steroid era is essentially over, free agent acquisition isn't what it used to be. By the time a player hits the free agent market, his best years are mostly behind him.

 

On a somewhat-related note, one of the main reasons why sports on TV are becoming so valuable to advertisers is that the majority of the audience watches the game live. That isn't the case with many other shows (although I wonder how long it will be until the DVR doesn't let you fast forward through the commercials).

 

Keep in mind this quote from the first article I linked above:

 

In addition, because of the U.S. Bankruptcy Court settlement between McCourt and Major League Baseball, the portion of the Dodgers’ television revenues contributed to MLB revenue sharing would be about $1 billion rather than about $2 billion. (MLB disputes that interpretation of the settlement, but the court rather than the league has the final say.)

 

So, I'm not sure that 1/3 of this TV deal will go into the shared pool.

 

Also, if the Brewers make more from other TV deals than they do their own...what does that mean? Let's say their TV Contract is worth $20 million (seems like no one really knows, other than it's probably not more than $30 million). Even if they make $25 million from other TV contracts, that still only comes to $45 million. The Dodgers, will still make $200,000 million after revenue sharing ($160 million if you don't believe the statement from the article above) from their deal. That's quite a gap.

 

There may not be a rash of $200 million dollar payrolls, but all it takes is 3 - 5 teams with payrolls at or near that mark. Every year we look at the FA market and immediately cross off the top players as having any chance of landing on the Brewers roster, leaving us with the Wolfs and Suppans of the FA world.

[torts]

im not sure I understand the problem with this?

[Patrick425]

im not sure I understand the problem with this?

 

Ok? Can you maybe make some sort of argument as to why you don't think there is a problem? Read the second linked article in the original post and then tell me what you disagree with.

 

To me, when one team is making more off their TV contract than 26 teams are from their entire revenues, it seems just a tad unbalanced. All else being equal, if I come to the poker table with $200 and you come with $100, the odds are in my favor. Is it impossible for you to win? No. But you can't afford to make the mistakes that I would be able to make.

 

Just like anything else, in the short term you can point out instances of the the low or mid market teams having success, but over the long run the big market, high payroll teams will take up most of the post season spots.

[torts]

im not sure I understand the problem with this?

 

Ok? Can you maybe make some sort of argument as to why you don't think there is a problem? Read the second linked article in the original post and then tell me what you disagree with.

 

To me, when one team is making more off their TV contract than 26 teams are from their entire revenues, it seems just a tad unbalanced. All else being equal, if I come to the poker table with $200 and you come with $100, the odds are in my favor. Is it impossible for you to win? No. But you can't afford to make the mistakes that I would be able to make.

 

Just like anything else, in the short term you can point out instances of the the low or mid market teams having success, but over the long run the big market, high payroll teams will take up most of the post season spots.

 

its a business, LAD know how much ad/commercial revenue FOX will make off the LAD market and LAD is capitalizing on it. Its a business move, the owners bought the team to make money and compete. stadium renovations are beginning this offseason, plus who knows what kind of debt, if any, they have from buying the team from McCort. MLB has the revenue sharing in place to help small market teams like Milwaukee, but im not sure why teams in major markets should be demonized for running a business and making a profit. if Milwaukee had the opportunity to do so I doubt anyone would be upset about it, and its a shame that Milwaukee is such a small market to begin with..

[owbc]

Keep in mind this quote from the first article I linked above:

 

In addition, because of the U.S. Bankruptcy Court settlement between McCourt and Major League Baseball, the portion of the Dodgers’ television revenues contributed to MLB revenue sharing would be about $1 billion rather than about $2 billion. (MLB disputes that interpretation of the settlement, but the court rather than the league has the final say.)

 

So, I'm not sure that 1/3 of this TV deal will go into the shared pool.

 

Also, if the Brewers make more from other TV deals than they do their own...what does that mean? Let's say their TV Contract is worth $20 million (seems like no one really knows, other than it's probably not more than $30 million). Even if they make $25 million from other TV contracts, that still only comes to $45 million. The Dodgers, will still make $200,000 million after revenue sharing ($160 million if you don't believe the statement from the article above) from their deal. That's quite a gap.

 

There may not be a rash of $200 million dollar payrolls, but all it takes is 3 - 5 teams with payrolls at or near that mark. Every year we look at the FA market and immediately cross off the top players as having any chance of landing on the Brewers roster, leaving us with the Wolfs and Suppans of the FA world.

 

Thanks for the correction, $1 billion is a big difference between MLB and the Dodgers.

 

As for the impact on the free agent market, I don't see how the top 3-5 teams bidding against each other is going to affect everyone else. The Brewers already are not even at the bargaining table. If teams like the Cardinals and Cubs start signing multi-billion dollar TV deals, then we might have a problem--although I would hope that MLB addresses the issue in the a future CBA before it gets to that.

[Patrick425]

its a business, LAD know how much ad/commercial revenue FOX will make off the LAD market and LAD is capitalizing on it. Its a business move, the owners bought the team to make money and compete. stadium renovations are beginning this offseason, plus who knows what kind of debt, if any, they have from buying the team from McCort. MLB has the revenue sharing in place to help small market teams like Milwaukee, but im not sure why teams in major markets should be demonized for running a business and making a profit. if Milwaukee had the opportunity to do so I doubt anyone would be upset about it, and its a shame that Milwaukee is such a small market to begin with..

 

Without delving too much into politics here, I am completely for the free market...but not so much in sports. I don't think sports franchises (within the same sport) should be competing against each other financially. MLB should be looked at as one entity, not 30 separate companies. I don't think the Olympics would get many viewers if they gave some runners 10 or 20 yard head starts. Green Bay is about as small of a market as you can get but they are not disadvantaged by that because the NFL does much more in the way of revenue sharing than baseball does. As owbc stated, I would like to see baseball continue to try to close this gap in future CBA talks instead of just putting their head in the sand and pointing at outliers like Oakland and Tampa Bay and saying..see, everything is good and fair.

 

In the last 10 years of playoffs, the top ten payroll teams (33.3% of the teams) have taken 52% of the playoff spots (43 out of 82 spots) and 50% of the WS wins. This is based on USA today payroll numbers which are taken at the beginning of each year. The perennial top payroll team, the Yankees, have been in the playoffs 9 of the last 10 years. So, there are really 9 playoff spots available to all "non-Yankee" teams each year.

[reillymcshane]

Fangraphs has an article about this - and the revenue gaps that are growing.

 

http://www.fangraphs.com/blogs/index.php/dodgers-send-shock-waves-through-local-tv-landscape/

 

The author does list the Brewers contract as lowest in baseball - $12 million annually. She says it's in place through the 2019 season - which I believe is wrong.

 

It's pretty stunning to see the differences with some teams getting hundreds of millions of dollars. It's going to make opportunities for teams like Milwaukee fewer and further between as salaries rise with the extra revenue available.

[Bnowell4evr]

...and a NY Times article reported the new deal will roughly triple that, ergo the estimate of around $30MM for the new deal.

Link please. I would like to know the source of the quote saying that the Brewers will triple their local TV revenue. With all the back and forth over the last couple years I want to know who the information was attributed to.

 

The Brewers receive less than $10 million a year in the deal, and although that figure should triple starting in 2013, for now it is the lowest local media payout in the majors. With that handicap, Attanasio knew the Brewers would have to rely on ticket sales more than most teams — a challenge, considering they draw from the smallest market in the majors.

 

http://www.nytimes.com/2011/10/01/sports/baseball/mark-attanasio-goes-all-in-on-the-brewers.html?pagewanted=all

[logan82]

Still sort of unclear who the source is. I just wanted to know if it was attributed to somebody working for the Yankees because there has been some back and forth between the Yankees and Brewers the last few years. Only a couple incidents.