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DODGERS SALE, PART II: MEDIA INTERESTS, TALKS OF CONFLICT
Published March 20, 1998
The Fox Group's purchase of the Dodgers "is the latest in a string of notable programming buys by entertainment conglomerates that are changing the face of the business," according to Sallie Hoffmeister of the L.A. TIMES. Across the "spectrum of entertainment, companies have been paying what on the surface appear to be irrational prices for signature products that can break through the clutter of consumer choices created by new satellite, digital and internet technologies" (L.A. TIMES, 3/20). In DC, Heath & Farhi write that the Dodgers may be Murdoch's and MLB's "ticket to the largely unexploited international market and its billions of potential viewers. Murdoch owns satellite TV systems reaching baseball-hungry markets in Latin America, Japan and Asia." Former MLB Commissioner Peter Ueberroth: "Within another three years, all teams will be owned by major corporate entities, most of whom will be associated with some media company." Rick Burton, Dir of the Warsaw Sports Marketing Center at the Univ. of OR: "Sports is a global battlefield ... and the next evolutionary step is the international network. Murdoch someday is going to be able to offer any game, any where, any time of day" (WASHINGTON POST, 3/20). In N.Y., Steve Zipay writes the "wave of new media and entertainment emperor/owners continues to change the shoreline of professional sports" (NEWSDAY, 3/20). On "Market Wrap," Jerry Cobb said that media companies acquiring sports teams is "becoming increasingly common, because the economics of sports and the needs of broadcasters are creating a marriage of convenience." Cowen's Gary Farber: "The cable industry spends approximately $6 billion a year on programming alone. By buying sports properties, it's essentially buying the programming, but rather than leasing it, they're going to own it." Farber: "It's an entree to so many under-leveraged businesses. Besides just the actual real-estate involved, there's the brand that it creates, brand awareness, there's substantial merchandising opportunities and corporate sponsorship" (CNBC, 3/19). In N.Y., Jon Elsen writes on the growing trend and adds, "So far, buying sports has worked out well for the media giants" (N.Y. POST, 3/20). Former Dodgers Owner Peter O'Malley, on approaching the various media conglomerates' interest in MLB: "If I was baseball, I'd sit them down all day to discuss it -- ask them, encourage them. What needs to be done? Communications. Kids' programs. International telecasts" (L.A. TIMES, 3/20). CONFLICT: With Murdoch holding national broadcast rights to MLB as well as cable TV rights to 22 of MLBs teams, some raise the question of potential conflict of interest. But Acting MLB Commissioner Bud Selig said, "We live in a new world. Obviously every sale will be looked at in regard to conflicts of interest. I thing there are a number of examples of baseball owners being partners in other ventures. The thing that does remain the same is that you can't have ownership interest in more than one club." In N.Y., Bill Madden: "In other words, baseball is resigned to the fact that, by going corporate as it has, there is no avoiding entangling alliances involving its owners" (N.Y. DAILY NEWS, 3/20). In DC, Thomas Boswell quotes NFL Commissioner Paul Tagliabue on media ownership of sports teams: "The ownership of an NFL team by a media conglomerate or a media owner would present a conflict of interest in competitive situations. You're better off dealing with the networks directly. We always want our outlets to have but one interest. That might be compromised." Boswell says that MLB made its decision on Murdoch based on "only two considerations," the $311M franchise fee and the fear of an antitrust lawsuit (WASHINGTON POST, 3/20). In Philadelphia, Stephen Seplow writes under the header, "Murdoch Deal: Did Someone Say 'Conflict Of Interest?'" (INQUIRER, 3/20).