About two months ago, it looked like the Dodgers were about to sign a long term deal with Fox Sports for TV rights. I was certainly convinced. I wrote about the deal that was expected to be valued at $6 billion over 25 years. Recent news has shown that Time Warner Cable will have the TV rights to the Dodgers starting in 2014.
The Dodgers have decided to start SportsNet LA, a regional sports network, that will carry the Dodger games starting in 2014. Time Warner Cable will carry the network. The deal is reportedly worth $7 billion over a 25 year period starting in 2014. Dodgers owner Mark Walter spoke on the creation of SportsNet LA saying, "we concluded last year that the best way to give our fans what they want, more content and more Dodger baseball, was to launch our own network."
Dodgers president, Stan Kasten, commented in a statement from the Dodgers saying, "The launch of the new regional sports network is a historic development for the Dodgers and our passionate fans. Our commitment from day one has been to build the Dodgers into the best team possible, both on and off the field. Our fans deserve the best, the best players, the best baseball, and the best experience, whether that's at the newly renovated Dodger Stadium or on television."
The deal is not finalized yet. It is unlikely the deal will go through without some issue from Major League Baseball. It is likely the MLB will have an issue regarding revenue sharing in the deal. According the MLB rules, a team that has their own TV network can keep the revenue because they are assuming risk. Even with this rule, MLB has the right to establish a broadcasting rights fee based on fair-market value. This can require teams to pay up to 34% of revenue to the revenue sharing plan. The Yankees and the Red Sox are examples of this with their YES Network and NESN.
This deal would be historic in value if it gets done. Most likely Major League Baseball will take the Dodgers to court if they can't work out a deal. Whatever the result of the deal is, the Dodgers have proven they are willing to spend some money to make the team a premier franchise. On the field upgrades and off the field deals should make Dodger fans excited for baseball.