Major League Baseball (MLB) has expressed concerns over the Los Angeles Dodgers’ new local rights deal with US broadcaster Time Warner Cable (TWC), according to the USA Today newspaper.
TWC confirmed on Monday that a new regional pay-television sports channel would be launched as part of a 25-year deal, from 2014 to 2038, to acquire the Dodgers’ media rights.
TWC will pay between $7 billion (€5.2 billion) and $8 billion over the course of the deal, and under the league’s rules, franchises with large media revenues are expected to share 34 per cent of their local television rights with smaller franchises.
However, when the Guggenheim Baseball Partners investment group acquired the Dodgers out of bankruptcy in April 2012, the terms of the takeover stipulated that the club’s ‘fair-market television value’ was $84 million per year, with four per cent increases per season. This figure is well below the minimum $280 million per year that TWC is thought to have guaranteed to the Dodgers in its rights deal, meaning the franchise could claim that $196 million per year is not subject to the league’s revenue-sharing regulations.
The MLB’s revenue-sharing regulations also stipulate that if teams assume the risk of owning their own television network, they are permitted to keep their revenue from being split with smaller franchises. However, the newspaper added that league believes that the Dodgers will not be taking any such risk due to TWC’s financial guarantees.
The rights deal has to be approved by MLB, and the report, citing a high-ranking league official with direct knowledge of the negotiations, said that the matter could end up in a US federal court.