With the Los Angeles Dodgers picking up expensive contracts and spending money seemingly without reservation, a lot has been said about the team’s upcoming regional television deal which is expected to dump an absurd amount of money into the club’s coffers. We’ve wondered how such an influx of cash, rumored to be as much as $8.5 billion over the next 20 years, might affect the entire balance of cost of value in baseball.
While we wait to see what happens and measure the fallout in terms of free agent prices and long-term contracts, the Dodgers, along with every other team in baseball, will welcome the news that ESPN has paid $5.6 billion to secure its national Major League Baseball rights for eight seasons, beginning in 2014.
While individual teams each look after their own regional television broadcasts and earn separate money through these deals, money from national television is split evenly among all 30 teams. The new deal with ESPN ensures that each team receives more than $23 million a year from 2014 – 2021. The previous deal with ESPN worked out to $306 million per year, which meant that each team received over $10 million annually. With funds more than doubling, we may get a glimpse of the salary escalation we’ve been expecting sooner rather than later.
The deal covers digital, radio and television rights, which include highlights for baseball tonight, Sunday Night Baseball, the regular Monday and Wednesday nationally broadcast games, and also, from now on, the Wild Card playoff (read: play in) game. It’s also worth mentioning that the contract isn’t exclusive, as MLB also has even bigger deals for nationally broadcast and playoff games with FOX and TBS.
Given the millions of dollars that are expected to pour in through television deals and the recently negotiated collective bargaining agreement, it’s going to get increasingly difficult to accept cries of poor from MLB owners, who are now making approximately all the money in the world.