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Monday, March 03, 2014

The Dodgers Board The Sinking RSN Revenues Boat As The Yankees Clamber Off

It's been a long offseason, and I've felt little to nothing newsworthy to write about; the Angels moves are largely an afterthought of two consecutive offseasons of disaster, between the Pujols and Hamilton contracts, with only the former ending before the decade does. Whether, as Matt Welch intimated in his writeup in this year's Baseball Prospectus, this is the fault of owner Arte Moreno or of GM Jerry Dipoto, the contracts are now inked and indisputable and due, sunk costs. It is not insignificant that the Angels have two of Grantland's 15 worst contracts in MLB.

But it is now Go time for the Dodgers. If the Angels have bad player deals, it is because their shiny new Fox Sports contract enabled them to spend stupidly and big. The Dodgers decided they needed to one-up the Angels, and in an effort to do so, launched their own cable TV network. In this, they followed the Yankees, who created YES Network in 1999. But, as happened in San Diego (also this), and to a lesser degree, Houston, the Dodgers now find their own greed locking them away from the fans they claimed they wanted to reach.

The cable operator is optimistic that it will have wide distribution by the time the Dodgers' regular season starts March 22.

"We're coming off a tremendous season and interest in Dodger baseball is at an all-time high," Time Warner Cable Sports President David Rone said.

But that may be wishful thinking.

Many distributors are upset about being pressured to carry a new sports network in a region that already has several similar channels, including not only Prime Ticket but also Fox Sports West, Pac-12 Los Angeles and Time Warner Cable's SportsNet and Deportes.

"It is really hard to understand why everyone needs their own channel when they didn't need one before," said Andy Albert, senior vice president of content acquisition for Cox Communications.

Those channels, along with ESPN, cost customers as much as $20 a month whether they watch them or not. The Dodgers channel threatens to dramatically increase that figure.

I will not be surprised to learn there is a considerable amount of pushback among the cable operators, who weary of downside cable-cutting should prices escalate too high. And there are signs that we have reached the moment of collapse.

Joe Kennedy, the bootlegger and patriarch of that political family, famously got out of the stock market when even cabbies and shoeshine boys started giving him stock tips. So we begin to suspect the jig is up on cable TV networks when the likes of icon YES Network sells itself to Fox. Why might they do such a thing?

One of the next things on the YES Network's to-do list is to negotiate a new carriage contract with Time Warner Cable, one of the largest cable operators in the New York metro region. Time Warner Cable has said the channel's distribution agreement is about to expire.

Some have speculated that the negotiation process could be ticklish because Fox and Time Warner Cable have clashed in the past. Fox lost the rights to televise L.A. Lakers and Dodgers games after Time Warner Cable agreed to pay the teams substantially more than Fox had been paying.

In other words, the Yankees still get the benefits of operating a RSN without the headaches of having to extract revenue from cable operators. This, to me, is the rats leaving the sinking ship -- with the Dodgers viewing such a ship as their salvation. One expects one of those views will prevail, and it isn't the Dodgers'. Well, it wouldn't be the first time the Bombers proved better than the Bums.

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Great to see you posting again, Rob!

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