The vision that the Dodgers have for their new SportsNet L.A. TV channel coming in 2014 will take more shape over the next 12 months while their current deal with Prime Ticket and KCAL-Channel 9 lasts for one more season.
While much of what will happen is speculation in the wake of today’s announcement that a deal was officially struck between the Dodgers and Time Warner cable on a reported $8 billion, 25-year contract, we’ll try to answer of the pertinent questions brought up already:
Q: How is this deal any better or worse than what the Lakers did with Time Warner Cable?
A: The Dodgers take a far greater risk by getting into the TV business themselves, but the greater long-term reward is if it succeeds. But there are many gambles involved.
“Some team owners look at sports for different reasons, depending on their personality,” said Ed Desser, head of the Desser Sports Media and an adviser to TWC in this deal with the Dodgers. “You’ve got high fixed costs and a variable of revenue streams. Like most businesses, you want a mixture of revenue, but when you’re signing players to contracts with a high fixed cost, it’s nice to have a large proportion of fixed revenues so you can minimize your risks of running a business. That’s what the Dodgers see in doing it this way.”
Melinda Witmer, the TWC executive vice president and chief video and content officer, told the Sports Business Daily that “from the first conversation we ever had with the team, they had already made the decision to launch their own vehicle.”
Dodgers chairman Mark Walter said in a statement that they had already decided to do this a year ago as a way to “provide substantial financial resources over the coming years.”
The Dodgers, however, needed to twist the deal in this direction to also maximize the amount of revenue it could keep rather than be forced to share under MLB guidelines.
Time Warner Cable was able to figure out a way to provide the billions in assets to the team and do seemingly everything except take ownership of the SportsNet L.A. channel.
A: Finding room on a cable or dish network menu can be tricky depending on how motivated the distributor is and how much if senses customers will leave if it’s not included.
TWC has committed to being the first distributor on board, and reportedly has also agreed to pay the Dodgers whatever fees they can’t collect from other distributors that hold out. That could float the Dodgers for an unlimited amount of years if someone like DirecTV continues to take a stance against rising sports channel fees and refuses to add it.
Q: How much will this hit viewers in the pocketbook?
A: If the Lakers’ TWC SportsNet and Deportes channels went for $3.95 per subscriber, the Dodgers channel should be in the same ballpark – perhaps as much as $5, making it one of the most expensive in the country.
Add the SportsNet L.A. to TWC SportsNet, Deportes, Fox Sports West, Prime Ticket and the Pac-12 Network, and there are six channels that could run a combined $15 per month for customers. Not to mention the costs already included for ESPN’s group of channels, plus the MLB, NBA, NFL and NHL league-owned channels.
Cable bills will only go up a certain percent each year, meaning the companies often absorb a bulk of the costs.
Ultimately, the costs get passed on to the consumer, and the model of an a la carte sports menu will likely be discussed again, maybe only after a consumers’ rights group demands government intervention.
“The phrase is that ‘pigs get fat and hogs get slaughtered,’ and this could push advocacy groups to find enough consumers who are tired of getting socked with higher fees and feel they don’t have any choice in the matter,” said David Carter, the executive director of the USC Sports Business Institute. “You’ve got to think the cable companies will want to avoid that at all costs, but you’ve got to believe something will end up in that venue. It’s ripe for some kind of government interaction.”
Q: Does this mean there’ll be no more Dodgers games on KCAL Channel 9?
A: KCAL has maintained a deal to carry 50 regular season games, plus six exhibitions, during the regular season. But after this year, it’s over. Just like what happened to the Lakers.
The only non-SportsNet L.A. games in 2014 and beyond would be if Fox takes a Dodger game for its Saturday regional coverage on Channel 11, or ESPN has an exclusive Sunday night game.
There have been reports that the Dodgers may ask Fox to stay in the loop and add some regular-season games on either their KTTV Channel 11 or KCOP Channel 13 affiliate, but that’s highly doubtful. It could only realistically happen if the Dodgers are in a bind and their new channel isn’t up and running by spring of 2014.
TWC needed more than 15 months to get its Lakers channels up and launched, including building new studios in El Segundo and hiring talent. One would think the TWC infrastructure could be in place to help the Dodgers’ launch, but that could raise red flags in how the Dodgers need to maintain a stand-alone channel presence when it involves how it operates and generates income for revenue sharing.
Q: Do the Dodgers plan to have a Spanish-language channel like the Lakers?
A: No plans were announced on that subject. But you’d think with the Dodgers’ Spanish-language base, that would be a natural. Perhaps the TWC Deportes channel buys a separate package of Dodgers Spanish-language games to fill its summer programming?
Q: What kind of shows would you expect to see on the Dodgers’ channel?
A: Could you get behind Fly Fishing with Fernando? Nick Punto’s World Poker Tour? Gardening Tips from Ted Lilly?
Using the Lakers’ TWC model, there’s obviously room for an expanded pre- and post-game show every night, replaying games, maybe showing some of their minor-league affiliate games.
Because most of the other pro and college teams’ rights are locked down by other networks, you probably won’t see much in the way of a shared deal like the Lakers have with the MLS Galaxy and WNBA Sparks.
The Yankees share their YES New York regional network with the NBA’s Nets. The Mets’ share their SportsNet New York, joined owned by Time Warner Cable and NBCUniversal, with Big East Conference sports.
“It used to be common-place for a regional sports network to do a pre- and post-game show, occasional special and fill the rest with poker shows or Veg-O-Matic informercials, but the new Lakers-Time Warner deal is a significant departure and is an interesting phenomenon in this eon of sports TV,” said Desser. “A channel largely devoted to Dodger programming is the new platform approach, a more immersive and complete coverage that has been lacking.”
Q: How will this affect the future of Vin Scully?
A: That’s often something not even the 85-year-old Hall of Famer would even guess on an answer, but there should not be any reasonable concerns about the Dodgers, who pay his salary, to suddenly abandon him just because they’re adjusting to a new business plan.
For the last few years, that equation has been the other way around — Scully has been waiting until about August before announcing whether he’s healthy and excited enough to return. Expect the same type of process to play out this summer.
What’s more likely to happen is that Scully will reach a point where he only would like to do home games. That would leave the Dodgers to decide if their team of Eric Collins and Steve Lyons is really what they want for as many as 75-plus broadcasts away from Dodger Stadium. Perhaps that’s where TWC could do well to make suggestions.
And, no, Time Warner Cable does not own the cloning rights to Scully.