About Me

My photo

Nice guy.  Have some blogs.  Do baseball research.

Tuesday, January 29, 2013

Those humongous TV deals: is that money guaranteed or what?

Tuesday, November 27, 2012
Collapse is coming.

I don't care how many decades these (TV) deals seem to entail, if the ratings plummet, which I think they will, the advertising money will dry up and the inevitable downward spiral will blow down the house of cards...

Even a Super League of eight to ten teams may not survive this madness.  Who the heck cares that much about baseball any more?  I love baseball but not this slow, boring mess that the Major Baseball League (MBL) has devolved into.  Here is the future in less than a decade:

1. Americans are not playing baseball.
2. Americans are not attending baseball games.
3. Americans are not watching baseball.

Sweet TV Deal Will Taste Bitter to Fans

Time Warner Cable announced what has been expected for a while, saying that in a deal worth up to $8 billion over 25 years, it will carry Dodgers games on the newfangled SportsNet LA starting in 2014 ...

While all this money being exchanged might be great for the teams, it’s lousy for the fans. With one team, SportsNet LA alone could add up to $5 a month to the costs of cable, satellite and telephone companies. They in turn pass much of those costs onto subscribers...  Time Warner (will be) ... extracting steep subscriber fees from AT&T, Verizon, Cox, Charter, DirecTV and Dish Network.

But only a portion of that staggering sum, about $84 million a year, which will rise at 4 percent annually, is designated as the team’s market-value rights fee and taxable at a 34 percent rate for Major League Baseball’s revenue-sharing pool...

Once they get a hold of the contract, baseball officials will see if what is slated to be untaxed should really be taxed and available to share. If the money is guaranteed, and not at risk, it should be taxed.

"If the money is guaranteed"?  Say what?  IF?  And this is just a legal if, not an economic if, as in the types of default in recent years in industries such as finance, auto, real estate.  What, sports, and the Major Baseball League (MBL) specifically, are immune?  If people stop watching twenty minutes of entertainment stretched out to four boring hours, how long do you think it will take the sponsors to realize that TV rating have decreased and that triggers:
1. reduction in the money paid for ads according to contract
2. renegotiation
3. default.

Then what?  MBL teams cannot possibly pay those absurd amounts committed and "guaranteed" to individual players.  Many fans will welcome this as they do not like seeing other workers being paid so much more than they.

Americans will simply but steadily drift away from baseball, which will fade into history.

No comments: