Even though it's stuck paying the Los Angeles Dodgers an average of $340 million annually for the next 24 years for a regional sports network no other major pay-TV operator will carry, Time Warner Cable (NYSE: TWC) may not be gun shy about launching another regional sports network in the Los Angeles market.
"There's been a flurry of new network launches," said SNL Kagan analyst Derek Baine to the New York Post last week, commenting about spiraling sports programming costs. "Now, we're hearing that Time Warner Cable might bid on the Clippers and you'd have another RSN based only on one team. It seems a bit out of control. How much can the market bear?"
Neither TWC or the NBA franchise have publicly commented on such a deal.
The Clippers were purchased for $2 billion last year by former Microsoft (NASDAQ: MSFT) czar Steve Ballmer in the wake of former owner Donald Sterling's public meltdown.
The team's current RSN deal with Fox Networks pays it around $20 million a season--chump change in the L.A. regional sports market. TWC is paying the rival L.A. Lakers around $3 billion over the next 20 years for TV rights, for example.
Being a technologist, Ballmer might be more open to a more forward-looking deal when it comes to re-upping his team's TV deal.
"Ballmer needs to look at the Dodgers and say, 'I'm not going to be able to build a TV channel on the current platform because it's not working like it used to,'" Vince Wladka, media industry consultant and former head of Fox Sports communications, told the Los Angeles Daily News. "He could turn around and cut a deal with Google for $200 million a year. Ballmer is betting he's going to recoup his money on media rights from something we've probably never heard of."
For more:
- read this New York Post story
- read this Los Angeles Daily News story
Related links:
SNL Kagan: sports cost growth to accelerate to 7.3% from 2014-18
NBA TV deal is 'latest example of reckless spending' by big networks, Mediacom VP says
Time Warner Cable SportsNet LA fiasco may turn tide on spiraling RSN costs