Dodgers co-owner Magic Johnson, right, with new team acquisition Zack… (Gary Friedman / Los Angeles…)
Get ready, Angelenos, another regional sports network may be headed your way!
Time Warner Cable is in advanced talks with the Dodgers for a deal involving the storied franchise's television rights. According to the Los Angeles Times, Time Warner Cable is prepared to pay upward of $7 billion for the right to be in business with the Dodgers for the foreseeable future. A contract could be announced as early as later this week. This would be the biggest local sports contract in television history.
Currently, Dodger games can be seen on News Corp.'s Prime Ticket channel. But that deal expires at the end of the 2013 baseball season. While News Corp. is still in the hunt, right now it appears that Time Warner Cable has the lead heading into the ninth inning of negotiations with the team's new majority owner, Guggenheim Partners.
Although Time Warner Cable also has a Los Angeles sports outlet (SportsNet), which is home to the Lakers and has plenty of room to accommodate the boys in blue, the Dodgers are hot for their own channel that they would control. Given that Guggenheim spent $2.15 billion for the team, that's hardly a surprise. It is banking on TV money to justify that cost and if it can own the channel too, that's more potential gravy.
If the Dodgers do end up with their own network, with either Time Warner Cable or News Corp. as a partner, it would add to the glut of so-called regional sports networks eating up space on televisions here. Besides Prime Ticket and SportsNet, there is also News Corp.'s Fox Sports West and Time Warner Cable's Spanish sports network Deportes. On top of that, there are also two cable channels devoted to the Pac-12 college conference.
Should Prime Ticket lose the Dodgers, don't expect News Corp. to take the other sports content from that channel (which includes rights to the Clippers) and put it on Fox Sports West. Programmers are loathe to give up real estate and News Corp. will try to make the case that there is enough compelling content on Prime Ticket without the Dodgers to justify keeping it afloat. Distributors will try to push for News Corp. to lower the cost to carry the channel. According to consulting firm SNL Kagan, Prime Ticket currently gets more than $2.50 a subscriber, per month from pay-TV distributors.
Even if a new channel isn't created for the Dodgers, it is hard to see how such an agreement won't drive up cable bills. The Dodger pact may be the tipping point where consumers and lawmakers say enough is enough. Sports costs are dramatically driving up the cost of pay TV. Sports programming may be popular, but non-sports fans are increasingly being asked to pick up most of the tab. The push to sell sports channels on a separate or a la carte basis to those who want them will grow along with those cable bills.
Should Time Warner Cable get the Dodgers, News Corp. executives will privately grumble that it is the cable operator's fault that bills are going up. Make no mistake, whoever gets the Dodgers is going to pass along that cost to the consumer. A real win for the fans would be if both companies looked Guggenheim in the eye and said, "No, thanks."