Fox to Sign $6 Billion to $7 Billion Dodgers Deal, Deadline Says
News Corp. (NWSA)’s Fox Sports unit will sign a television deal with the Los Angeles Dodgers that’s worth $6 billion to $7 billion over 25 years, Deadline Hollywood said, without disclosing where it got the information.
The richest broadcast contract in sports history will pay the Dodgers an average $280 million a year, the report said. The Major League Baseball team currently gets about $40 million annually under the deal with Fox that expires after the 2013 season.
The Dodgers on May 1 completed their sale for $2.15 billion, a record for a sports franchise, to a group including Guggenheim Partners and its top executive Mark Walter, and ex- basketball player Magic Johnson, allowing the team to exit bankruptcy.
Stan Kasten, president of the Dodgers, declined to comment on yesterday’s Deadline Hollywood report.
“The Dodgers and Fox have been long-time partners and we’re in discussions now to extend that relationship well into the future,” Fox said in a statement. “We’re working hard to reach an agreement that achieves the goals of Dodgers ownership and also makes sense for our business. The discussions are private and ongoing so, out of respect for the process, we’re not going to comment further.”
News Corp., the media company led by Rupert Murdoch, was vying with Time Warner Cable Inc. (TWC) for the right to televise Dodgers games in Southern California. Fox will also show the games on its national network, Deadline Hollywood said.
A settlement ending the Dodgers’ 2011 battle in U.S. Bankruptcy Court gives the team’s new owners a chance to cap income subject to revenue-sharing from a proposed regional sports network at about $84 million a year, Bloomberg News reported in September. If the team gets as much as $280 million a year from Fox’s rights fees, the Dodgers may enjoy an annual unshared windfall approaching $200 million.
The Los Angeles Angels, the market’s number two baseball team, signed a 17-year $2.5 billion regional network contract in December with Fox Sports, according to Forbes. The number one Dodgers’ leverage on TV rights has been increased by intense competition for local sports programming in Southern California.
News Corp. earlier this month also agreed to buy 49 percent of the YES Network, the cable channel that carries New York Yankees baseball games, in a deal that values the pay-TV outlet at about $3 billion. Murdoch can raise the stake, which he’s acquiring from the Yankees, Goldman Sachs Group Inc. (GS) and other investors, to 80 percent after three years.
YES also negotiated a five-year extension to its agreement to carry Yankees games through 2042. Fox will pay about 5 percent more each year from the current $85 million annually to show Yankees games, reaching about $350 million by the contract’s end, people with knowledge of the situation said at the time.
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