The Connection Between News Corp.'s New Sports Network And The Dodgers Sale

by Wayne Friedman, Mar 30, 2012, 4:33 PM

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There's a symmetry in the sale of the Los Angeles Dodgers for over $2 billion coming at the same time news broke that News Corp. might be considering a national sports network to compete with ESPN.

Sports still kills it when it comes to TV, advertising, and what cable operators will pay for it. ESPN, for example, gets the highest per-subscriber fee of around $4 to $5.

Comcast recently reinvented its small sports channel, now NBC Sports Network, in the hope of growing the business.

But having just the NHL, like NBC Sports Network, isn’t enough. To compete in the big time, one needs the NFL, NBA or Major League Baseball -- or possibly the Olympics. That’s what News Corp. will be looking for if and when it starts its new sports network.

A lot has been made about sports being DVR-proof. Live programming is something advertisers value. It is also true that sports pulls in the always-tough-to-find young male viewers, whose preferred entertainment activities are often video games and movies.

For advertisers, all this is good news. Any competition to ESPN that lowers high program prices will get cheers.

News Corp. is already in the TV sports business. Its Fox network has had a long association with the NFL and Major League Baseball. It also has a bunch of regional sports channels.

But here's the clue about why News Corp. may move in this direction: Much of the value of the $2 billion sale of the Los Angeles Dodgers to a group that includes Magic Johnson is in the potential growth of its TV business.

Perhaps someday the Los Angeles Dodgers will create their own TV network, like their big East Coast baseball brand-name rivals did with The YES network, owned in part by a company that controls the New York Yankees -- which many view as a basic no-brainer, cash-cow venture.

In years to come in Los Angeles, all this would push aside the likes of Fox’s regional sports channel. Now imagine a host of other big sports teams doing the same in the coming years.

Another new national sports cable network might make sense for a major TV company.

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