Amid the conversation about the team’s spending, the Los Angeles Dodgers’ TV deal with Spectrum has come up, namely, a special clause that allows the Dodgers to retain an additional portion of their TV revenue.
The signing of outfielder Kyle Tucker has sparked a total meltdown on social media, with fanbases from all over the MLB spectrum coming out of the woodwork and calling out the Dodgers for “ruining baseball.”
Tucker is set to earn $60 million per season, an incredibly high average annual value, which will have him among the highest-paid athletes in the sport. He is joining a team already full of stars in Mookie Betts, Shohei Ohtani, and Freddie Freeman — the reigning World Series champions.
As a result, an agreement between the Dodgers’ owners, the Guggenheim Group, and MLB has begun to circulate.
The LA Times’ Bill Shaikin outlined the terms of the deal between MLB and the Dodgers that have indeed led to the team keeping a larger share of its revenue.
What happened with the Dodgers media deal?
While trying to oust Frank McCourt as an owner in MLB, the league blocked a $3 billion deal between the Dodgers and Fox Sports, prompting McCourt to file a suit in bankruptcy court.
McCourt was trying to sell the team for all its worth, and he needed to make sure bidders knew what to expect from a TV deal.
In bankruptcy court, MLB agreed that the fair-market value for the Dodgers’ TV deal was the Fox offer, meaning the league would take its 34 percent cut based on those terms.
However, the Dodgers ended up striking a deal worth more than $8 billion, though MLB could not take more from the new deal.
During an appearance on Dodgers Dougout with Doug McKain, Shakin explained how the deal materialized.
“In a nutshell, in order to get Frank McCourt out, which was the objective from MLB, they had to make a deal with him in bankruptcy court,” Shakin said on the show.
“And part of that deal was how are you going to value the television contract? And since a television contract did not exist at that time, because a new owner had not even been selected, they did the best they could.
“And Guggenheim came out with a really great offer that I think blew even MLB’s wildest expectations away. MLB wasn’t thrilled, but they’re living by the terms of the deal, and that’s where we are.”
Why did MLB not fight the Dodgers on the deal?
MLB did try to push for new terms that hold the Dodgers to the same standard as other teams, but the settlement in bankruptcy court was too much of a blocker.
However, as Shakin outlines, the Dodgers’ new owners, Guggenheim, did work with MLB to find a middle ground.
“So in a normal situation, Major League Baseball would have said, this is a crazy high deal and good for you, and we’re happy, but we gotta share this money just like we share any other money.
“And in this case, MLB could only push so far because Guggenheim was willing to work with MLB to a point. And then Guggenheim could have gone back to the court and said, ‘we got a deal, please, Mr. Judge, enforce the deal. That’s what you’re here for.’
“And the court, as they say in legal circles, has jurisdiction over the deal, which means they run everything.
“So, MLB could have been stuck with the original settlement, which was not as favorable as what they got in the negotiations with Guggenheim.
“Is it equal for all other teams? Absolutely not. Is it a competitive advantage for the Dodgers? Sure. Now, is it as big a competitive advantage as some people are making it? I don’t think so ’cause the contract itself is way more than the individual amount the Dodgers are saving every year.”
