http://www.latimes.com/sports/dodgersnow/la-sp-dn-dodgers-fox-sports-6-billion-tv-deal-20121125,0,4821671.storyFox Sports could pay at least $6 billion to retain the Dodgers’ television rights, three parties familiar with the negotiations said Sunday.
The deal could be worth three times what the Dodgers’ new owners paid for the team and almost 20 times the value of the Dodgers’ current television contract.
The deal is not done, the parties said, speaking on condition of anonymity because of the ongoing negotiations.
If the two sides do not strike a deal by Friday, the Dodgers would have until the following Friday to present Fox with a final offer, according to the team’s current contract. Fox would then have 30 days to accept or reject the offer.
In the absence of a deal, the Dodgers would be free to open talks with Time Warner Cable SportsNet or launch a team-owned cable channel.
The new television deal should launch the Dodgers into baseball’s financial stratosphere and could provide fans with a team-branded channel – think former owner Frank McCourt’s concept of “DTV: Dodger Television” — that emphasizes interactive programming before, during and after games.
The Dodgers’ proposed contract reflects the sharply escalating value of live television sports in an era when viewers watch many other programs at their convenience, skipping the commercials along the way.
The New York Yankees’ television rights fee is set to climb from $85 million in 2013 to about $300 million by 2042, according to news reports.
The Lakers’ fee is $120 million this season, in the first year of a 20-year TWC contract that escalates regularly and averages $180 million per season, with a five-year option at about $280 million per season.
The Dodgers’ deal, proposed for 25 years, would average $240 million per year at $6 billion, or $280 million per year at $7 billion.
In addition, because of the U.S. Bankruptcy Court settlement between McCourt and Major League Baseball, the portion of the Dodgers’ television revenues contributed to MLB revenue sharing would be about $1 billion rather than about $2 billion. (MLB disputes that interpretation of the settlement, but the court rather than the league has the final say.)
Under the Dodgers’ current television contract, Fox pays $350 million over 12 years, an average of $29 million. In the 2013 season, the final one in the current deal, Fox pays the team $39 million.
Guggenheim Baseball paid $2.15 billion to buy the Dodgers last spring, confident that the potential for a bidding war between Fox and TWC would result in a lucrative television contract.
Fox last week bought a 49% share of the Yankees’ YES Network, in advance of starting a national cable sports channel to rival ESPN. By securing the Dodgers’ rights, Fox could launch the new channel with two marquee teams on its roster.
A deal also would ensure the viability of two Fox sports channels in the Los Angeles market. If the Dodgers were to follow the Lakers and Pacific 12 Conference in leaving Fox, the company would be left with the Angels, Clippers, Kings and Ducks to fill two channels, with ensuing pressure from cable and satellite companies to consolidate the four teams on one channel.
Fox could have saved itself some money by buying the team last year. Fox declined to bid in McCourt’s auction, spooked by its unsuccessful ownership of the Dodgers from 1998 to 2004.
When Fox and McCourt sued each other last year over the Dodgers’ television rights, a mediator broached the idea of McCourt selling the team to Fox. According to a person familiar with the talks, Fox proposed a price in the range of $1.2 billion, McCourt proposed a price in the range of $2 billion, and neither side expressed much interest in meeting halfway.
The Dodgers declined to comment on the potential television deal, the terms of which were first reported by deadline.com.
In a statement, Fox Sports said: “The Dodgers and Fox have been long-time partners and we’re in discussions now to extend that relationship well into the future. We’re working hard to reach an agreement that achieves the goals of Dodgers ownership and also makes sense for our business.”