Once the deal is finalized, how long before they pull a Loria and bring their costs down to the bare minimum? If they have a set revenue stream of $250M/yr for 25 years then what is their incentive to keep spending abhorrent amounts of money on the MLB roster? Is it worth an extra $150M/year in salary to get a small attendance bump? I'm sure it will be a gradual shift towards a more reasonable budget, but it will happen.
Everybody likes to say that getting a big TV deal means teams will start spending more money. To me, the teams that are locked into long TV deals are less
likely to spend money. The marginal benefit of each dollar invested becomes much lower. Then, 5 years before the TV deal expires, ramp up spending again and get a good buzz going, and sign a new TV deal. Rinse and repeat.
Pogotheostrich wrote:The fangraphs article is great. It has a rundown of the current TV deals. To be honest though this seems like a real bubble to me. That breaks down to around $1.5 million a game. I don't see how the Dodger's TV rights can do anything but lose money.
A lot of the data they used is questionable. I believe some of the TV contracts weren't updated for 2013, and I know that the value of the Blue Jays' TV contract is misleading. Rogers owns the Blue Jays and the TV network, as well as basically all major media and sports teams in Toronto (Maple Leafs are worth $1B according to Forbes; not bad for a hockey team). The $36M figure is nowhere near what the TV deal would be worth on the open market; it's set that way for accounting reasons. The Blue Jays have I believe the largest TV viewership in all of MLB, with a rather affluent fan base.