Much of the attention the Los Angeles Dodgers have been getting focuses on their drunken-sailor-level spending. The Dodgers will enter the 2014 season with the biggest payroll in the big leagues at over $220 million. That’s $75 million more than the Giants and a staggering $160 million more than the A’s.
But a much bigger story about money may be playing out in the Southland. The Dodgers have launched their own TV network, SportsNet LA, and are trying to charge the highest rates ever for a regional sports channel.
The Dodgers open the season in about a week (March 22 in Australia against the Diamondbacks), and a rough estimate shows only about a quarter of the households in the LA market will be able to tune in Dodgers games on TV.
That’s because only Time Warner Cable, a partner in the new Dodgers network, will be carrying it. There will be no over-the-air TV broadcasts, and neither Dish Network, DirecTV, nor any of the smaller cable providers will be carrying the games. Why? You already know the answer: Money.
The Dodgers reportedly want pay-TV companies to pay more than $4 per subscriber to carry the network, a price that’s likely to increase in the future. You should understand that in the murky accounting of the pay-TV world, these “per-sub” fees mean the carrier has to pay that price for each and every household, whether they want or use the channel or not.
Essentially, that means cable and satellite TV prices would go up for every home in the LA area, whether the customers want to watch Dodgers games or not. Pay-TV companies say they don’t have anything against the Dodgers, but they’d rather let individual customers decide if they want to pay for the channel.
This standoff over ever-pricier sports programming isn’t unique or new. Millions of DirecTV subscribers have been frozen out of the Pac 12 Network’s offerings in a similar battle. Regional sports networks in other markets are testing their muscle too.
It’s a big wager by each side. Teams like the Dodgers are betting that their product is so desirable that subscribers will lean on their pay-TV carriers to pay the price, raising rates for everyone. The pay-TV companies think they’re being strong-armed and say complaints and cancellations are minimal when they stand their ground.
Magic Johnson and his fellow investors may have put together baseball’s edition of Showtime, but it looks like the majority of Angelenos will be left in the dark.