Thurm: The new national TV contracts and 2014 payrolls

From SABR member Wendy Thurm at FanGraphs on November 1, 2013:

Today we’re going to talk about the effect of the new national TV contracts on 2014 payrolls:

  • The teams that have already built their 2014 payrolls on the revenue expected from those contracts.
  • The teams that haven’t already accounted for that revenue, and have money to play with this winter.
  • The teams that have revenues so high and payrolls so large that another $15 million means close to nothing.

 In August 2012, Major League Baseball and ESPN announced a new eight-year national TV deal to cover the 2014 through 2021 seasons. ESPN will pay MLB $700 million per year for the right to broadcast games exclusively on Sunday nights, other games (non-exclusively) on Monday and Wednesday nights, extended highlights for Baseball Tonight, the Home Run Derby and other All-Star activities (but not the game) and one Wild Card Game. The deal also includes national and international radio and digital rights.

Several months later, MLB announced a new national TV contract with Fox and TBS, which also covered the 2014 through 2021 seasons. Under that deal, MLB will receive $800 million per year in combined revenue from the two networks, in exchange for broadcasts rights for the Saturday game of the week on Fox, the Sunday game on TBS and all of the postseason games — save for the one that will be broadcast on ESPN. Fox also retains the rights to the All-Star Game.

That’s $1.5 billion in national TV revenue per season that will go into MLB’s Central Fund, or $750 million more than under the contracts that just expired.

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Originally published: November 1, 2013. Last Updated: November 1, 2013.