Posted Under: Johanna's View
While the world is talking about Performance Enhancing Drugs and Alex Rodriguez, I thought I would turn my attention to the other game changing story that actually hit on Monday.
The Dodgers have created a new subsidiary that is partnering with Time Warner to broadcast games and other Dodger related programming. Now, they could have just sold their TV rights to Time Warner, but under this new agreement, both the Dodgers and Time Warner will profit when the company profits. Time Warner has the exclusive right to sell advertising on the station, and it seems they will guarantee a certain amount of money to be made from subscribers to this channel on the network. They channel is paying the Dodgers rights fees- which is for lack of a better word, taxed by the league and used for revenue sharing. But not all of the money involved in the deal and moving to the Dodgers counts as that rights fee. At least as far as the Dodgers are concerned. MLB still must approve this deal which is set to begin in 2014. The problem is that if this financial arrangement moves forward, with the Dodgers gaining huge amounts of revenue from the deal that do not count as rights fees, the team will become extremely rich. The days of the haves and the have nots in baseball will return.
And for those of you who may think this is like the deal with the Yankess and the YES network, or even Boston and NESN it is not. While YES and NESN share ownership with their respective teams, they are not directly or structurally working for those teams. They are separate companies that benefit from the shared relationship. In this new entity though, the network is part of the Dodgers, the same as the community relations department is. They are simply gaining another partner for distribution with Time Warner.
The other issues here is that only those with Time Warner as their cable provider can get the Dodgers games. That unto itself is not so fan friendly.
So, with the decision to approve this deal in the hands of MLB, the future of baseball waits to be decided. Whether MLB allows them to continue to just get richer, or somehow finds a way to raise the amount of money the Dodgers must pay into revenue sharing is what is actually being adjudicated. So while we wait to find out if the documentation at the Miami clinic is accurate and valid, we also need to watch and see how MLB handles this media deal for the Dodgers. It will change baseball. More on this as it develops.