SBD/January 25, 2013/Media

Sources: Dodgers' TWC TV Deal Could Include Lesser Role For Fox Sports

TWC may be lining up a deal with Fox to feature on the net's future FS1 channel
The Dodgers have "invited Fox Sports to take a lesser role in the team's television future," according to sources cited by Bill Shaikin of the L.A. TIMES. It is "unclear exactly what the Dodgers might propose to Fox" or whether Time Warner Cable's contract for the team's TV rights "would need to be modified in any way." However, the sources said that the Dodgers "could consider pitching Fox on carrying a small number of games" on KTTV-Fox or KCOP-MYT. That would "enable the team to continue providing at least a few games on free local television for the benefit of fans without cable or satellite subscriptions." The sources said that the Dodgers "might be interested in securing spots for their team on the national broadcasts on Fox Sports 1, the soon-to-be-launched Fox rival to ESPN" (LATIMES.com, 1/24). Meanwhile, in L.A., Joe Flint cited sources as saying that TWC "promised the team that it would cover fees from other distributors who don't sign on to carry" the company's proposed Dodgers-owners channel. If DirecTV, for example, "does not sign on to carry the new Dodgers channel, Time Warner Cable will pay the subscription fees until a deal could be reached with the satellite broadcaster." The price for the Dodgers channel is "expected to be in the neighborhood of $5 a subscriber per month." The channel "would likely launch either late this year or early next year after the Dodgers' deal with Prime Ticket ends" (LATIMES.com, 1/24).

MANIFEST DESTINY: In L.A., Tom Hoffarth writes the reality of a Dodgers' network is that, on the "heels of the TWC SportsNet deal to capture the Lakers' around-the-clock news cycle, this business plan was bound to happen." Santa Monica-based Desser Sports Media President Ed Desser said, "I've little doubt the Dodgers will be able to launch a successful channel. ... What's pretty clear is that folks at Guggenheim are taking a financier's view of the sports business and not a traditionalist's approach, and that creates new, interesting dynamics that are fun to watch." But Hoffarth writes, "Before the Dodgers start printing money, someone's going to have to finance it." Those in the business world "continue to call this Dodger-TWC partnership a tipping point, a bubble-burster, or the last straw breaking the viewers' back." Desser said, "What viewers are starting to expect more with what they see with the Lakers on TWC SportsNet is that you can have a more immersive and complete coverage of your favorite team on a linear TV surface that has really been lacking until recent times." Hoffarth writes, "If that's one of the upsides to a team having its own channel, the downside might come when subscribers can't find the channel on their systems because the company has decided it can't absorb the fees that come with it." Sports Business Group President David Carter said, "Anybody who's a Dodger fan will enjoy all the customer- friendly content, but they may find themselves with a little bit of a hangover with the potential sticker stock as this rolls out" (L.A. DAILY NEWS, 1/25). In California, Michael Lev writes most sports fans are willing to pay for additional RSNs "because TV provides a product we consider valuable." Lev: "If you're a diehard Dodgers fan, you'll pay to see the Dodgers. Whether there's a cap on that -- a point where it's no longer an affordable or justifiable expense -- remains to be seen. Executives with Time Warner Cable and the Dodgers are betting there isn't" (ORANGE COUNTY REGISTER, 1/25).

HOPE FOR THE LITTLE GUY: In K.C., Pete Grathoff writes under the header, "Baseball TV Deals Growing More Lucrative For Teams." While L.A. has the No. 2 TV market in the U.S., a "quick scan of recent local cable television deals in baseball shows some smaller teams have hit paydirt, too." Smith College sports economist Andrew Zimbalist said, "It’s not simply a matter of small market, big market -- it’s also a matter of when contracts expire. ... Teams that signed their contracts three years ago or four years ago, or teams that sign their contracts in another couple of years are not going to benefit from this bubble." Grathoff notes four teams that "struck it rich" recently are the Rangers, Astros, Angels and Padres. Royals Senior VP/Business Kevin Uhlich said that the "good news for the Royals is that the Dodgers, and any other team that signs a monster local TV deal," send 34% of that annual revenue to the league." MLB then distributes the money evenly among all 30 teams (K.C. STAR, 1/25).
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