Dodgers leaning towards Time Warner TV deal

Jayne Kamin-Oncea-US PRESSWIRE

The Dodgers have been spending freely since the Guggenheim group purchased the team last year and with a new local TV deal on the horizon, the money should keeping flowing.

The Los Angeles Dodgers set a new record for franchise purchase price with their two billion dollar sale last season and since then, new owners, Guggenheim Baseball Management, have spent lavishly, signing Zack Greinke to the second largest deal ever given to a pitcher and taking on $250M in contracts in a trade with the Red Sox that netted them Adrian Gonzalez, Carl Crawford, Josh Beckett and Nick Punto.

Their deep pockets are due in large part to the opportunity they will have to sign one of the most lucrative television deals in sports when the current deal with Fox expires after the 2013 season.

The L.A. Times’ Bill Shaikin is now reporting that Time Warner Cable has emerged as the favorite to win the bidding for the Dodgers local TV rights, a deal that is expected be worth around $7 billion.

Prior to forcing McCourt to sell the team, MLB stepped in and intervened with the local television deal McCourt had arranged with Fox that was said to be worth approximately $3 billion, stating that such a deal would further divide the Dodgers assets, making a sale of the club prohibitive.

Fox was then said to have reached a tentative agreement with the Dodgers worth $6.1 billion, but issues with the structure of the MLB’s revenue sharing put that deal on hold in mid-December. Fox had exclusive negotiating rights with the Dodgers but their window has since expired.

No deal is yet in place, but Time Warner now appears to be ahead of Fox in the bidding. Revenue sharing is still a point of contention between the league and the Dodgers, but Shaiken says both sides are hoping to avoid settling that aspect of the new deal in U.S. Bankruptcy court.

Regardless of such details, commissioner Bud Selig would appear to be quite justified in his use of the league’s "best interest of baseball" clause in rejecting the deal McCourt originally struck with Fox. Both MLB and the Dodgers appear to have more than doubled their revenue from the sale of the Dodgers TV rights since that deal was struck down.

For Dodgers fans this means the owner’s recent spending spree is just the start. This new revenue will almost certainly give the Dodgers the ability to outspend everyone except the Yankees. Given the new era of financial restraint in the Bronx, L.A. could very well have the game’s highest payroll in a year or two.

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