Why Time Warner is "becoming the dominant regional sports network in the market"
Time Warner's newly reported deal for the rights to carry Los Angeles Dodgers games may allow the company to charge higher ad rates for its regional sports network, analysts told TheWrap.
No announcement has been made, but Bloomberg has reported that the games will be carried on a new regional sports network developed by Guggenheim Partners — the parent company of the Hollywood Reporter. Guggenheim bought the Dodgers for $2.15 billion last year.
Time Warner will be the broadcasting partner, but will not own the television rights, Bloomberg said. The Dodgers' current contract with Fox expires at the end of the 2013 season.
The Dodgers' move to Time Warner — reported by the Los Angeles Times to be worth as much as $7 billion — is yet another blow to Fox Sports, which for decades had the region's sports in its pocket.
But in 2011, Time Warner snatched a 20-year deal for the broadcasting rights for the National Basketball Association's Los Angeles Lakers. Fox's broadcasting deals with the Lakers and Dodgers went back nearly two decades.
A spokesman for Fox said he could not confirm that the Dodgers deal was signed. Time Warner did not immediately respond to a request from TheWrap for comment.
Brad Adgate, the senior vice president of research at New York-based Horizon Media, said Time Warner will be able to increase its advertising rates with two of Southern California's biggest teams in its stable.
"They don't have a football team, so the Lakers and Dodgers are probably the two most popular franchises in the market," Adgate told TheWrap. "To have these two, especially if they're playing well and they're competitive, will attract viewers to the games and it'll give [Time Warner] some leverage as far as what they can charge in advertising rates."
Adgate said the deal appears to be part of a trend in sporting events broadcasts coming under the control of regional, rather than national, networks.
"Time Warner is becoming the dominant regional sports network in the market," he said.
Last November, News Corporation — which previously controlled the TV rights to carry Dodgers games, for which it paid about $40 million a year — bought a 49 percent stake in the Yankees Entertainment and Sports Network. It which airs the New York Yankees and the Brooklyn Nets.
"Anything else, people DVR through the commercials," Kathleen Hessert, the CEO of the consultancy Sports Media Challenge, told TheWrap. "But people sit and they watch live sporting events and that's a big advantage."
Under its previous contract with the Dodgers, Fox had an exclusive negotiating period with the team, but failed to reach a deal before that one-to-one window expired. Despite reports that Fox was restructuring its offer, Time Warner apparently swooped in.
"They didn't step up to the plate," Hessert said. "Fans are going to ultimately notice when you've got two major sports properties like that no longer on Fox."
Lee Berke, another sports media consultant, told TheWrap that Fox Sports remains a major player in the Southern Californian market, since it reupped with Major League Baseball's Los Angeles Angels of Anaheim, the National Hockey League's Los Angeles Kings and the NBA's Clippers.
"They're going to be a substantial presence in L.A. sports for a good time to come," Berke, president and CEO of LHB Sports Entertainment Media, said.