Will Clippers Sale Again Leave TV Subscribers Paying the Bill?

Will Clippers Sale Again Leave TV
Stephen Dunn/Getty Images

Another billionaire is angling to buy a major sports franchise, with former Microsoft CEO Steve Ballmer committing a record $2 billion (or as it’s called in his tax bracket, “ashtray money”) to acquire the Los Angeles Clippers. But don’t worry, because if history is any guide, the only people apt to get screwed on the deal are TV subscribers, whether they can name a single player on the Clippers roster or not.

That’s because TV money has become the life’s blood of sports, as evidenced by escalating rights fees for the major leagues and an explosion of regional networks devoted to individual teams and college conferences. That includes the Clippers’ crosstown rival, the Lakers, who have their own dedicated network courtesy of Time Warner Cable.

Of course, the experience with the Lakers (who have witnessed the once-dominant franchise swoon into lottery-pick territory) has left multichannel video programming distributors, or MVPDs, a little skittish about anteing up for more. So DirecTV and other players in the L.A. market have dug in their heels on Time Warner Cable’s separate pact with the Los Angeles Dodgers, which reportedly seeks $4 to $5 a month from every cable/satellite/telco household for the privilege of watching a team whose season lasts half the year.

Until recently, though, the hunger for sports programming – and its reputation for being DVR-proof (people tend to like watching games live), making it catnip for advertisers – have kept the money rolling in. And much of that relies on escalating fees for everyone on a bundled basis, as opposed to a direct subscription model that would make serious sports fans shoulder the substantial freight to watch their favorite teams.

The Dodgers, naturally, have been crying crocodile tears about the inability of most L.A. fans to see their games – including pitcher Josh Beckett’s n0-hitter – but thus far nobody has mentioned revising the club’s reported $8.25-billion mega-agreement with TWC in order to make it possible for the company to strike deals other distribution services could swallow. Meanwhile, the Dodgers enjoy one of baseball’s most expensive rosters – or at least, so those of us who aren’t Time Warner customers hear.

Like the Dodgers, which sold for north of $2 billion, Ballmer had to run the numbers and look for areas of growth. And even with that standoff still in progress, it’s not hard to figure out that the Clippers will be aggressive about maximizing their TV revenue to help defray the acquisition price. Indeed, the Los Angeles Times reported that Fox Sports has already engaged in preliminary discussions with suitors for the team.

In a sense, the Clippers – once a league doormat and perennial latenight punch line for Jay Leno – are on a roll. Not only are the Clippers currently the best basketball team in Los Angeles and a solid playoff contender, but they are in the process of shedding Donald Sterling – an odious owner even before his taped comments cost him the franchise.

Still, if you’re looking for the likely losers in the latest quarter of this game – or if you prefer, chapter in this soap opera – just find people living in the Los Angeles area, wait about a year, and then take a peek at their cable bill.

 

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  1. Sterling Silver says:

    Cut the cable. 8th month without a bill.

  2. Jonathan says:

    This is a very good question to ask, Brian. But, sometimes sports teams are purchased for reasons other than pure dollars and cents. The price of the distribution of the sporting events, though, seems to be based on two things: 1) whether the RSN owns TV distribution–if it does, the price to consumers goes up, and 2) the relative size of the TV provider/RSN’s share of the market. Said differently, if Comcast buys the TV rights, post TWC acquisition, Clippers fans should expect to be in the same shoes as Dodgers fans. For more, see my comparison of the Comcast/TWC merger vs. the AT&T/DirecTV merger. http://bit.ly/1jL0Tsm

  3. Andi says:

    All this crazy money and expense which will fall back on fans may “POP” this bubble and people will get turned off and move on to other entertainment.

  4. Jeff says:

    Good thing I have Xbox

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