By now you’ve probably heard that the Rangers and Angels have each been part of $3 billion television rights deals. And, you’re bound to be aware that the Dodgers are on the cusp of a $7-$8 billion deal. Even if you didn’t know about the TV rights deals, their effects can be felt. Whether it was Yu Darvish for the Rangers; Albert Pujols and Josh Hamilton for the Angels, or; seemingly the entire league in major trades or free agent signings for the Dodgers, TV affects rosters.
Peter Gammons has started a wonderful new website called “Gammons Daily” and I offered up to contribute to it. My first entry ran on Monday (see Sports Rights Fees Will Make You Hate Your TV), and here are some tidbits:
“These days, a franchise’s No. 4 hitter is no longer in uniform. The No. 4 hitter is the guy who negotiates the contract for the TV rights.” – Scott Boras
You, Mr. and Ms. Discerning Sports Fan, love your television. With the exception of a rare few, you will watch more sporting events on the boob-tube than you will live sitting in the stands. We build “Man Caves” around them, tap them into the internet, mount them on the wall, yes, we can dare say they are the only love we can have an affair with and not get in trouble for.
But that’s all about to change. Like an addiction we can’t shake, the costs begin to rise, and that thing we once so loved is a lifestyle we can’t shake. It’s not your fault. Your love for high-definition, nitro-fueled action is as pure as your first game of tee-ball, but that cable or satellite bill is getting out of control. It’s getting to the point where you seriously wonder whether you have to take out a second mortgage on the house just to keep up with the fix.
The bubble can’t take this much longer. It will pop under its own collective weight. The Cubs and Phillies, while not the last deal that’s in the billions, will likely be the last two club deals that reach into the stratosphere. Major League Baseball reupped on all their national broadcast deals with FOX, ESPN, and TBS which kick in next year and will double the amount they were receiving from $788.3 million annually to $1.5 billion. The NFL’s nine year extension reached in 2011 pulls in a whopping $4 billion annually. The industry is watching, as are the politicians. DirecTV CEO Mike White spoke of how this all is adding up, using the Lakers as a target. “In terms of Los Angeles, I think it’s another example of how broken this system is,” White said. “People take the same content, package it up, bid it up for 3 times the national average on a per-game basis and then try and stick it back to the other distributors in the geography. And I think that’s very unfortunate.”
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Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.
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