Here’s my Variety analysis of the imminent deal between the Dodgers and Time Warner Cable that will create a new network dedicated to the Big Blue Wrecking Crew.
By partnering to launch a new regional cable network in an overflowing market rather than making a straightforward rights deal, the Los Angeles Dodgers and Time Warner Cable have doubled down on their belief that skyrocketing revenues in the sports TV world are anything but a bubble.
The Dodgers could have simply sold their post-2013 cable rights to Time Warner Cable Sports Net’s English and Spanish components — joining a pair of networks that only launched less than four months ago — or to current host Fox Sports Net. Either way, the Dodgers could have counted on getting $6 billion or more over the next 20-25 years (triple the price that Guggenheim Partners paid for the entire team in March), with no need to worry about the future health of sports TV revenue.
For its part, Time Warner Cable could have said that two new networks were enough and held fast against launching any more into a market that some believe has plenty, thank you.
Instead, according to sources commenting on a deal that has yet to be officially announced, the Dodgers will draw a still healthy commitment from Time Warner Cable that comes with the heightened risk/reward scenario of an ownership stake. …