Failure of Los Angeles Dodgers TV Deal Is For The Best

This past week, Comcast bailed on a proposed merger with Time Warner due to a recommendation by the Department of Justice and the Federal Communications Commission that the deal not go through.

This is great news overall for consumers, as the cable TV industry already has limited competition.

Fans of the Los Angeles Dodgers may not be able to appreciate it, though.

Failure of Los Angeles Dodgers TV Deal Is For The Best

Because the merger didn’t go through, Time Warner and the Dodgers are less likely to budge on their asking price for SportsNet LA, the channel that has exclusive rights to carry in market Dodgers TV broadcasts. The asking price is thought to be between $4.90 – $5 per subscriber.

With the season in full swing, and Dodgers ticket sales remaining steady, it looks like the 70% of potential viewers in Los Angeles who don’t have Time Warner Cable, not to mention those in the extended markets like Las Vegas, NV, will go another season without being able to watch the majority of Dodgers games.

To put it in perspective, below are some highlights of what in market Dodgers fans have missed out in the first year of the deal:

  • First two games of the 2014 regular season were played in Australia.
  • May 25th , 2014: Josh Beckett pitches a no hitter.
  • June 18th, 2014: Clayton Kershaw pitches a no hitter.
  • An entire season which saw the Dodgers clinched the NL West for the second year in a row and Clayton Kershaw win a Cy Young award and an MVP award.

The situation seems even more urgent when considering legendary Dodgers TV and radio announcer Vin Scully has recently limited himself to home games, games in San Francisco, and games in Anaheim.  What will happen first? Vin Scully’s retirement, or a deal to get SportsNet LA on all major carriers?

“No, it’s not hurting us,” Dodgers co-owner Magic Johnson recently told the Los Angeles Times, “But we want to be on TV. You know that.” Via:  http://www.latimes.com/sports/dodgers/la-sp-dodgers-tv-20150416-story.html

Ok Magic, well how about giving back some of that $8.35 billion over 25 years guaranteed to the Dodgers by Time Warner?

That doesn’t seem like that’s going to happen, at least not if the Dodgers continue playing well enough to sell tickets the way they are now.

So if you’re an in-market Dodgers fan, and can’t go to the game and want to watch, what can you do?

If you’re a die-hard, you can find ways to watch the team. There are a few technological ways around that which I could write another post about. You can also hit the Dodgers where it hurts and stop buying tickets and supporting the team. As a friend who switched to the rival Giants told me, “Why should I support a team that makes it difficult for me to watch?”

I guess you can do what Time Warner tells you to do and go to http://www.ineedmydodgers.com/ , too.

I personally hope the deal blows up and forces a humongous war between the Dodgers and Time Warner.

You don’t have to go too far back in time to see how another overly-inflated TV deal worked out: the Houston Astros launched a jointly-owned channel with Comcast in 2012. In comparison to the Dodgers Time Warner deal, the deal was tiny, just $1.2 billion over ten years, and eventually turned into a legal battle between the Astros and Comcast after attempts to sell the channel to carriers failed. Comcast eventually sold their rights to DirecTV, and the channel is now known as Root Sports Houston.

The failure of the Dodgers’ Time Warner deal will ultimately send a loud message from TV providers, on behalf of their customers who aren’t sports fans, that says, “I’m tired of paying for sports I don’t actually watch”.

Everyday cable TV subscribers who don’t watch sports are bailing on cable subscriptions because they’re tired of sports channels like ESPN raising their cable bill. According to The Consumerist, ESPN accounts for $6.04 out of the average cable bill ( http://consumerist.com/2014/08/05/espn-accounts-for-more-than-6-of-your-cable-bill-could-soon-top-8/ ). If the Dodgers deal succeeds at what Time Warner wants to charge, that’s another $5 for every subscriber on each carrier that picks it up, whether you watch the channel or not.  Did Time Warner really think that every cable and satellite TV provider was going to run and sign up at $5 per subscriber, especially as the industry is facing an rising trend of subscribers bailing for internet-based alternatives to TV?  Apparently they did, and now they’re eating $100 million in losses after the first year.

Will the deal ultimately fail like the Astros’ deal with Comcast? Time will tell, but if and when the Dodgers fall out of playoff contention, and the fans will stop showing up to Chavez Ravine. Maybe they’d rather support the Angels because they can watch them on TV. Or, maybe they just found one of a thousand other things to do on an summer day in LA. Boy, that $8.35 billion is going to look a lot more ridiculous than it does now. Time Warner will grow tired of taking the loss, and the Dodgers will need to restructure the deal. Even better, when this does happen, professional sports teams, leagues, and TV distribution providers will hopefully learn their lesson. All consumers, sports fans or otherwise, will be better off for it.

 

Photo by Harry How/Getty Images