An exclusive 45-day period of negotiations between Fox Sports and Major League Baseball's Los Angeles Dodgers ended on Friday, but the two sides will continue to negotiate a 25-year deal valued at more than $6 billion, a new record for local sports rights.
Known for loosening the purse strings for the television rights to live baseball and football coverage, Fox is a highly motivated buyer due to the recent losses of the NBA's Los Angeles Lakers, Pac-12 college games, and other regional sports to competitors such as Time Warner and Comcast. The 160-plus game schedule of the Dodgers would be a key source of content for the existing regional channels and a new national sports network Fox plans to launch, tentatively called Fox One. In November, Fox purchased 49% of YES Network, the home station of the New York Yankees, so the proposed deal with the Dodgers would give the company a pair of marquee teams in the two biggest markets in the country.
Under the current 12-year deal with Fox that expires in 2013, the Dodgers receive approximately $29 million a year, totaling about $350 million. The new offer would give the team a whopping $240 million per year, increasing the cost of the TV rights exponentially. At this stage of negotiations, it is unlikely the Dodgers will entertain other offers, although Time Warner, Comcast, and CBS would all be interested in acquiring the rights. With the Fox pact, there exists the possibility that the transaction may also involve equity ownership in a Fox cable channel such as Prime Ticket, providing an ideal branding opportunity for the Dodgers all year round.
$6 billion for 25 years—$240 million a year—these are absolutely ludicrous numbers, especially for a team that hasn't reached the postseason since 2009. A new competitor for ESPN in the form of a Fox One sports network would be great news for sports fans, though.