The $2 billion sale of the Los Angeles Dodgers has gotten a lot of attention over two bits of info: The new ownership team includes hoops legend Magic Johnson, and the $2 billion price tag is the highest to be paid for any pro sports franchise ever in North America.
The biggest factor in that price may not be the Dodgers' World Series chances, nor the fact they employ last year's Cy Young-winning pitcher Clayton Kershaw and the guy who should have won last year's National League MVP award, Matt Kemp. It's all about TV rights.
Time Warner Cable (NYSE: TWC) was among the companies watching the sale process closely because News Corp.'s (Nasdaq: NWSA) Fox Sports was unable to craft a new deal for broadcasting Dodgers games that could meet the approval of Major League Baseball. Fox still can forge a new deal before its contract runs out in 2013, but TWC, which we learned earlier this week was upgrading its regional sports production capabilities in L.A. and elsewhere, is expected to make a run at game broadcast rights if Fox falls short. There is also still a possibility that the Dodgers could create their own TV channel and charge cable TV companies for retransmission.
Any way you slice it, the cost for TV rights for Dodgers game are going way up in the future, many reports suggest, and that ultimately will mean higher prices for cable TV customers who want whatever channel wins the rights battle.
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