Major League Baseball agreed to Walt Disney’s sale of the Anaheim Angels for $184 million Wednesday, and two more media conglomerates could be unloading their baseball teams in short order: News Corp. with the Los Angeles Dodgers and AOL Time Warner with the Atlanta Braves.
The buyer of the Angels is Arturo Moreno, a Mexican-American entrepreneur who pocketed more than $8 billion when he sold his billboard company Outdoors Systems to Infinity Broadcasting in 1999. Moreno becomes the first member of a minority to run a baseball ownership group.
“Disney is good at producing and distributing scripted entertainment, but it found it couldn’t make money with a baseball team, whose outcome is not scripted,” said David Carter, a principal in the L.A.-based Sports Business Group.
Kevin O’Malley, sports consultant and former top executive with Turner Sports, said Disney originally bought the Angels in 1996 to use as the linchpin for a proposed regional sports network in Los Angeles that Disney tried to launch with its division ESPN.
But cable operators in the area rejected the new network, instead signing long-term deals with the two existing sports regionals owned by Fox.
With no network to justify ownership of the Angels, Disney was stuck with a money-losing operation.
“The financial model of a Major League team isn’t working because expenses keep exceeding income,” explained Mike Trager, former chairman of Clear Channel Television and owner of his own TV-sports consultancy.
The chief expense is players’ salaries, and it’s still unclear whether last year’s collective-bargaining agreement, which prevented a baseball strike, will help more teams fill their ledgers with black ink.
Compared to the National Football League and the National Basketball Assn., baseball comes up short in its national TV deals. Baseball chalks up only $558.8 million per year from contracts with Fox and ESPN. By contrast, football harvests $2.2 billion a year from a combination of ABC, Fox, CBS and ESPN, and basketball racks up $766.5 million a year from ESPN, TNT and ABC.
Disney’s Anaheim Mighty Ducks team of the National Hockey League is also up for sale. O’Malley said it would be both ironic and unprecedented if Disney sells the Ducks after they win the Stanley Cup (they’re now the odds-on favorite) in the same year that it sold the Angels after it clinched the World Series.
Trager said that AOL TW is pushing hard to sell the Atlanta Braves because “despite the team’s success on the field over the last two decades, it keeps losing money,” not only because of high player salaries but because of lackluster attendance at the ballpark.
AOL Time Warner is also trying to sell any assets that it can to reduce its bloated $28 billion debt, which has made Wall Street extremely nervous about the company’s stock. Company has just sold the Atlanta Hawks basketball team and the Atlanta Thrashers hockey team to David McDavid, a Dallas-based businessman.
Dodgers a dog?
Fox has also entertained potential buyers of the L.A. Dodgers recently, coming to the conclusion, Trager said, that “running a baseball team doesn’t fit the business model of a giant media company.”
The buyer of the Angels is Arturo Moreno, a Mexican-American entrepreneur who pocketed more than $8 billion when he sold his billboard company Outdoor Systems to Infinity Broadcasting in 1999. Moreno becomes the first member of a minority to run a baseball-ownership group.