TV cash makes kings - LancasterOnline: Opinion

TV cash makes kings

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Posted: Sunday, April 1, 2012 12:00 am | Updated: 7:40 pm, Thu Sep 12, 2013.

The Phillies have a secret weapon.

No, it's not a bionic-kneed Chase Utley.

It's not Sidd Finch.

It's the nuclear bomb of baseball, and it could keep the Phils in the sport's version of The One Percent long after the Rollins/Utley/Howard Era is history.

It's a monster local broadcast-rights deal, with Comcast or another regional TV network.

The Texas Rangers signed a 20-year deal with Fox Sports Southwest in 2010 that has been valued at $3 billion.

On paper, the Rangers might be the best team in baseball right now, and they lavished a $56 million deal on Japanese pitching sensation Yu Darvish this winter.

The Los Angeles Angels of Anaheim signed a similar deal - 20 years, reportedly in the $3 billion neighborhood - with Fox Sports Southwest last year.

Then they grabbed Albert Pujols for 10 years, at the low, low price of $240 million.

The Los Angeles Dodgers were recently bought, by a group including Magic Johnson, for a reported $2 billion. The Dodgers' local TV ratings dwarf the Angels in the same market, and their deal comes up next year.

The San Diego Padres, in MLB's 26th-biggest market, with broadcast ratings a little over one-third that of the sport's superpowers, is about to sign a reported 20-year, $1.5 billion deal with Fox.

Which brings us to the Phillies, whose 2012 payroll is estimated at $166 million, third in the majors behind, naturally, the Yankees ($207 million) and Red Sox ($169 million).

That number is the residue of the most successful on-field stretch in the club's 129-year history. The Phils' payroll was actually higher last year, about $171 million, or scarily close to the dreaded luxury-tax threshold (through 2013) of $178 million.

More than anything else, including the Phillies' current streak of 204 consecutive sellouts at Citizens Bank Park, the next local TV deal will determine whether the Phillies can continue to play in that exclusive sandbox.

The current deal with Comcast expires in 2015. It is very possible that, as a show of good faith and/or to beat competitors to the punch, Comcast will renegotiate before then.

The Philadelphia market is the biggest in major league baseball with only one team. The team's local-TV ratings are the best in baseball (yes, better than the Yanks and Sawx, and nearly triple that of the Padres) according to The Philadelphia Inquirer.

The new deal could be staggering.

We may never know how staggering, owing to the incredible complexity of these deals. The Phillies currently sell their own TV advertising, for example. They may continue to do that, or give it up for a fee.

They may participate in profits with a broadcaster, or even negotiate part ownership of the network.

The Red Sox own 80 percent of their broadcaster, New England Sports Network. The Yankees own 30 percent of theirs, the YES Network.

Both NESN and YES are worth more than the teams they cover, according to Forbes magazine.

Broadcasters believe these deals are good ones because of the DVR-ization of the television business. Sports are about the only programming left that a viewer really has to experience live. And baseball is 162-plus such experiences per year.

"You can spend $1.5 billion now to get the team, but a month later you're going to get $4 billion or $5 billion or more for the regional sports network," uber-agent Scott Boras told USA Today.

"If you have the cash to get into this, the cherry on top is the major league team. The regional sports network is the sundae."

MLB is supposed to collect 30 percent of local TV revenues to distribute among all 30 teams as revenue sharing.

But the arrangements clubs have with broadcasters are so baroque it's nearly impossible to determine how much money 30 percent is. MLB employs a full-time committee to review such arrangements.

Whatever the precise numbers, 30 percent will never be enough for the Royals and Pirates to fund the kind of roster the big boys do.

The Phillies? Remember when ownership tried to portray Philadelphia as a "medium" market?

They don't even bother to pretend any more.

"Right now, we're enjoying tremendous popularity," Phillies President David Montgomery said at spring training last month.

"We would hope our friends at Comcast would see that as well. I'm sure they will."

Mike Gross is assistant sports editor of the Sunday News. Email him at mgross@lnpnews.com.

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