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SBD/January 23, 2013/MediaPrint All
While media reports say Time Warner Cable is close to a $7B deal to pick up the Dodgers' local TV rights, sources say Fox Sports has certain back-end rights that may give it the right to match or object to any deal, depending on the specifics of the new contract. TWC and Dodgers Owner Guggenheim Partners were close to finalizing the deal late last week. Sources said that one of the hold-ups was in trying to craft a deal that would get around Fox' right to match. It is believed that Fox would be able to match a straight rights deal or any deal that gives TWC an equity interest in a new channel. Sources said that matching rights would not kick in if the Dodgers launch a channel on their own and get TWC to agree to carry it with no equity stake (John Ourand, THE DAILY). Meanwhile, BLOOMBERG NEWS' Sherman & Soshnick cited sources as saying that an announcement of an agreement with TWC "is imminent, although no deal has been signed." Dodgers games will be carried on a new RSN "developed by Guggenheim Partners." Sources said that as a "partner in the project, Time Warner Cable will run the network and sell the advertisements, although it won't own the television rights outright." A source said that like TWC's deal with the Lakers, the Dodgers' contract "will cover about 20 years" (BLOOMBERG NEWS, 1/22).
SETTING AN EXAMPLE: In L.A., Tom Hoffarth notes if "rumors hold that the deal in the $8 billion range covering 25 years is accurate, it would make it the most expensive local TV deal in history." This arrangement would give the Dodgers "a long-term business model that is along the lines" of what the Yankees did with the launch of YES Network 10 years ago. Rather than take "any short-term cash benefits from signing a deal with a local cable operator, the Yankees went on their own and started their own channel, absorbed a couple years of losses at the start, but have built the brand" to where Fox spent $500M on a 49% share of YES (L.A. DAILY NEWS, 1/23). CABLEFAX DAILY writes the TWC agreement "is a blow to Fox." But News Corp. "seemed to be developing an insurance policy against losing the Dodgers rights" in striking the YES deal. The Dodgers' "attraction to TWC is clear." Not only does it "guarantee carriage as the dominant distributor in the market, but it has the successful track record of TWC SportsNet, which was able to reach deals with all the major MVPDs shortly after the 1st Lakers game" (CABLEFAX DAILY, 1/23).
FILLING IN THE HOLES: In L.A., Shaikin & Flint noted Fox Sports "launched a second local cable channel -- now called Prime Ticket -- to carry the Dodgers in 1997." Fox Sports previously "lost rights to Lakers games to Time Warner Cable, and the departure of the Dodgers would leave Fox with the Angels, Clippers, Ducks and Kings as the anchor teams for two channels" (LATIMES.com, 1/22). The L.A. TIMES' Joe Flint cited a Fox source as saying that there are "no plans to consolidate Prime Ticket and Fox Sports West into one channel." However, some Angels and Kings games "could find their way to Prime Ticket." While Fox may be able to "keep Prime Ticket going, it will likely have to renegotiate its current contracts with distributors." Losing the Dodgers will "mean lower ratings and the channel will be of less value to area pay-TV distributors, including Time Warner Cable and DirecTV." Data from SNL Kagan shows that Prime Ticket is "due to receive about $2.50 per subscriber per month from distributors." After next season, when the Dodgers are "no longer on the service, that fee will come down" (LATIMES.com, 1/22).
As ESPN reporters investigated the story surrounding the purported girlfriend of Notre Dame LB Manti Te’o on Jan. 16, some inside the company “argued that its reporters -- who had initially been put onto the story by Tom Condon, Te’o’s agent -- had enough material to justify publishing an article,” according to Sandomir & Miller of the N.Y. TIMES, who examine the decision-making process at the company. But other execs were “less sure and pushed to get an interview with Te’o." For them, it was “a question of journalistic standards,” and they “did not want to be wrong.” ESPN Senior VP & Dir of News Vince Doria said, “We were very close. We wanted to be very careful.” ESPN “held the story, and then lost it” as Deadspin broke it. Deadspin editor Tommy Craggs said that he had “also received a tip about the hoax, a day after ESPN had been alerted.” For some, the debate within ESPN “quickly gave way to regret and reflection.” Three ESPN execs said that they “should have published on Jan. 16.” The execs said that the net’s “focus on waiting until getting an interview with Te’o was a mistake.” One exec said, “If I had my druthers, we would have run with it.” Sandomir & Miller write there “does not seem to be any obvious competing interest that might have blunted ESPN’s vigor in reporting the story,” except, perhaps, for the “value it attaches to having its subjects on camera.” ESPN said that it “needed to talk to Te’o.” Deadspin editor Tim Burke said that it “took only 24 hours after being tipped to the hoax to locate the person whose photograph was supposedly Te’o’s girlfriend.” Burke said, “I have no idea what ESPN’s investigation was. They didn’t talk to anyone who we were talking to” (N.Y. TIMES, 1/23).
NEXT STEPS: After Deadspin broke the story, ESPN was “left scrambling to try to obtain an on-camera interview Jan. 17 with Te’o,” whose team of advisers “did not want him to sit before any cameras.” Matthew Hiltzik, a PR adviser to Te’o, “adamantly set a critical condition” with ESPN’s Jeremy Schaap. ESPN “could interview Te’o off the air last Friday night only, in an intimate setting without cameras or a group of technicians.” Doria said that ESPN was “also limited to using two minutes of audio.” Doria: “We accepted that. The main aspect for us was no limitations” on questions. ESPN President John Skipper said, “It wasn’t ideal. We’d love to have video. But it was made clear that it was not negotiable.” Sandomir & Miller write ESPN “finds itself in an awkward position.” First, it “hesitated in the hope of a Te’o interview, and Deadspin got the story.” Second, by agreeing to talk to Te’o “without its cameras present, it lost the battle to put him on-camera to Katie Couric” (N.Y. TIMES, 1/23).
OTHER TAKEAWAY: Blogger Ed Sherman looked at the story's impact and stated, "In my mind, one of the bigger stories here is that Deadspin beat ESPN." If the Te'o "fiasco showed anything, it's that Deadspin will be a player for these stories in the future." This "won't be the last time the site nails a big one" (SHERMANREPORT.com, 1/22).
FROM THE ARCHIVES: Of note, the N.Y. TIMES’ Public Editor Margaret Sullivan reviewed the newsgathering process on the Te'o story earlier this month and stated it had “lessons for journalists, including those at The Times.” N.Y. TIMES’ Sports Editor Joe Sexton said one lesson was, “Trust but verify” (NYTIMES.com, 1/17). SI Managing Editor Christian Stone writes, "A story like this calls for an honest acknowledgement of our failure and a rigorous self-examination, but it also yields an opportunity. There is a story, a remarkable one that mutates with each news cycle, to be pursued and told" (SI, 1/28 issue).
Alabama-based WJOX-FM afternoon host Paul Finebaum, whose contract with the station expired on Monday, is “not currently entertaining offers from other stations and won't do so for at least 90 days,” according to sources cited by Ty West of the BIRMINGHAM BUSINESS JOURNAL. Finebaum's contract gives Cumulus Media, which owns WJOX, "an opportunity to match any offer the sports talk radio host receives within 90 days following the expiration of the contract.” A source said that once that 90-day window passes, Finebaum and his reps would “evaluate the media landscape and start the process of making a decision about the host's future” (BIZJOURNALS.com, 1/22). Blogger Clay Travis wrote Finebaum is “leaving one of Cumulus radio’s Southern sports powerhouses for a big payday from a competing station," WZNN-FM, which is owned by Cox Communications. It is a “big move in sports talk radio because Finebaum brings in several million dollars a year in ad revenue on one of the highest rated sports talk stations in the country.” Finebaum’s relationship with Cumulus Media has been “tumultuous, with the two sides recently engaging in a protracted lawsuit” that was settled in July. Finebaum’s 90-day non-compete window “will arise during the dead season of college football, leaving Finebaum free to reemerge in time for the lead-in to the 2013 football season.” Yesterday morning the official WJOX website “removed all reference to Finebaum on the show lineup” (OUTKICKTHECOVERAGE.com, 1/22).
There are a growing number of websites that are “walking a thin line between gambling and fantasy sports when it comes to marketing their websites,” according to Chris Sieroty of the LAS VEGAS REVIEW-JOURNAL. There is a “new and profitable trend of daily betting sites such as Cantor Fantasy, Fan Duel, Fan Ball and Draft Day that process millions of dollars in transactions between players who organize and bet on new lineups.” Fantasy Sports Trade Association President Paul Charchian at the organization’s conference yesterday said, "We support daily game companies. By far, daily games are the fastest growing part of our business. Don't (mess) it up." Charchian said that he was “concerned that some daily sites are marketing themselves like offshore sports books did before the federal crackdown in 2006.” He urged them to be "much more conscious about creating consumer confusion." Charchian: "Sooner or later that confusion will affect all of us." It currently is “legal to bet on fantasy sports.” The Unlawful Internet Gambling & Enforcement Act says that the games “must have an outcome that reflects the relative knowledge of the participants, but not chance.” In other words, fantasy sports are “considered games of skill.” Charchian: "No fantasy league or website has ever been shut down due to a gambling indictment. Please be very conscious about how you present yourself. If you don't want to do it for yourself, do it for the industry" (LAS VEGAS REVIEW-JOURNAL, 1/23).
HYBRID CLUB: In Houston, Molly Ryan reports Houston-based Sports Tradex has “introduced a platform on which users can combine the competitive nature of sports with the risks and thrills of a stock exchange.” The company “launched its online sports exchange about two months ago and already has close to 1,000 users.” But this is “just the beginning -- the company expects to add thousands more as it increases its sports offerings.” Sports Tradex Founder & CEO Ben Lipson said, “We are a fantasy sports and finance hybrid” (HOUSTON BUSINESS JOURNAL, 1/18 issue).