A unit formed by Wall Street powerhouse Guggenheim Partners is about to be hit with a $1 billion beanball. The new owners of the L.A. Dodgers are being forced to rework their pending $7 billion, 25-year media rights deal with Time Warner Cable, three sources close to the situation say. The new deal could end up seeing the unit, Guggenheim Baseball Management, fork over $130 million a year to Major League Baseball under its revenue-sharing agreement, these sources say.
What is the biggest baseball brand? Look for the pinstripes among players in New York’s Bronx. The New York Yankees generated nearly $500 million in media value, according to social media researcher General Sentiment’s 2013 MLB Media Valuation Report. The Bronx Bombers produced almost three times the value than second-place Philadelphia Phillies, which registered $160 million.
Under the terms of its freshly signed eight-year agreements, Walt Disney Co.’s ESPN, News Corp.’s Fox and Time Warner Inc.’s TBS will pay a combined $12.4 billion — about twice as much as what baseball received for TV rights in previous contracts. “This is a remarkable day for baseball,” Major League Baseball Commissioner Allan “Bud” Selig said in a conference call today.
Fox is in the leadoff position for a multi-year, multi-billion-dollar broadcast rights deal with Major League Baseball. Rival broadcaster CBS, which had talked to Turner Sports about a joint bid, is no longer interested. NBC put a bid on the table but came up short, sources say.
Negotiations for Major League Baseball’s national TV rights deals are likely to be the knottiest in sports media history, as fundamental pricing agreements will be complicated by a host of thorny issues. Renewed interest from a former network partner and a bifurcated linear/digital rights structure could keep baseball at the table throughout the summer. The only certainty is that the cost of doing business with America’s pastime almost certainly will soar.