Dodgers Deal Rumored to Be a Win for Time Warner Cable

by Christopher Freeburn | January 23, 2013 11:55 am

Dodgers Deal Rumored to Be a Win for Time Warner Cable

Baseball 300x227 Dodgers Deal Rumored to Be a Win for Time Warner Cable[1]Reports indicate the Time Warner Cable (NYSE:TWC[2]) has beat out News Corp.’s (NASDAQ:NWSA[3]) Fox Sports to reach a long-term agreement on cable broadcast rights[4] for Los Angeles Dodgers games.

Unnamed insider sources told the Los Angeles Times that the deal, which is expected to cover 20 years and see the cable provider pay the team between $7 billion and $8 billion, could be announced within days.

While final terms of the agreement remain to be finalized, the Dodgers will get their own cable channel in 2014. Under its Major League Baseball’s revenue-sharing rules, the team might have to pay the MLB between $1 billion and $2.7 billion, depending on the exact terms of the contract with TWC.

The deal came after Fox Sports backed away from renewing its contract with the team due to the Dodgers’ demand for more revenue. Fox Sports will pay the team $39 million to broadcast its games this year, the final year of its current contract.

In 2011, TWC outbid Fox Sports on a 20-year agreement to carry L.A. Lakers games, paying $3.6 billion.

TWC could charge $5 a month, per subscriber, for the Dodgers channel, twice the subscription price for Fox Sports’ Prime Ticket channel. The price hike for subscribers could irritate subscribers who have seen the price of sports coverage spike over the last decade[5].

Shares of Time Warner Cable slid fractionally in Wednesday morning trading, while News Corp. rose slightly.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2012/03/Baseball.jpg
  2. TWC: http://studio-5.financialcontent.com/investplace/quote?Symbol=TWC
  3. NWSA: http://studio-5.financialcontent.com/investplace/quote?Symbol=NWSA
  4. to reach a long-term agreement on cable broadcast rights: http://www.latimes.com/business/la-fi-ct-dodgers-tv-20130123,0,6585724.story
  5. who have seen the price of sports coverage spike over the last decade: http://investorplace.com/2012/10/for-media-companies-sports-sure-aint-cheap/

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