Photo: Dodger pitcher Clayton Kershaw. Credit: Gina Ferazzi / Los Angeles Times.
The Daily Dose: Los Angeles may be on the verge of cable sports overkill. The City of Angels already has two cable sports channels, News Corp.'s Fox Sports West and Prime Ticket. Later this year Time Warner Cable is launching its English- and Spanish-language sports networks (which will have the Lakers). Also coming is a channel from the Pac-12 conference. If the Dodgers start their own channel (see below), that would be six sports networks. That might be the tipping point as far as consumers and lawmakers are concerned and could lead for renewed calls to offer sports networks on an a la carte basis so customers who aren't interested in sports don't have to pay big monthly fees.
Pay ball. The stunning $2.15 billion acquisition of the Los Angeles Dodgers by an investment group that includes former Lakers great Magic Johnson continues to be the talk of the town. The price tag, far more than most industry observers thought the team would get, has many wondering just how the team will make ends meet. Here's a hint: bigger TV deals. The new owners are counting on either getting big bucks from Fox Sports or Time Warner Cable or starting their own channel. Analysis of what the Dodger deal means for the TV industry and consumers from the Los Angeles Times and Wall Street Journal.
Dodgers sale could mean increased cable bills.
Congratulations, Angelenos, you may have just bought a piece of the Los Angeles Dodgers!
While former Lakers great Magic Johnson may be leading the group shelling out a record $2 billion to buy the storied baseball franchise, in the end consumers may pick up much of the tab because their cable bills likely will be going up, up, up!
The $2 billion price tag tops by more than $1.1 billion what the Chicago Cubs were sold for three years ago and is $1.5 billion more than what Frank McCourt paid for the Dodgers in 2004. When the Dodgers, which filed for bankruptcy protection last year, were first put up for sale, most baseball watchers thought McCourt would be hard pressed to get $1 billion, much less twice that.
Even Mark Cuban, the outspoken owner of the Dallas Mavericks basketball team who's not shy about opening his wallet, thought that the Dodgers weren't worth $1 billion.
But Johnson's group, whose big backer is Mark Walter, chief executive of financial services firm Guggenheim Partners, which will be the Dodgers' controlling owner, was willing to pay so much because it figures it can make that money back in television revenue.
It's not a crazy bet. Sports rights fees have skyrocketed lately. Last year, the Los Angeles Angels and Fox Sports struck a 17-year deal worth about $2.5 billion and Time Warner Cable spent even more to land the Lakers in a 20-year deal valued at $3 billion.
Currently, Fox's regional cable network Prime Ticket carries the bulk of Dodger games at a price tag of roughly $38 million per season. Fox tried to cut a new deal with the Dodgers similar to the one it has with the Angels, but Major League Baseball rejected it, concerned that McCourt would use some of the money for his divorce settlement.
Fox's contract with the Dodgers runs through the 2013 season and the network has exclusive rights to renegotiate a new agreement through November of this year. After that, Time Warner Cable, which is launching a regional sports channel here later this year, can jump in the fray and try to grab TV rights to the Dodgers.
But while Time Warner Cable and Fox Sports will likely be willing to pay more than double and perhaps even triple what the Dodgers are currently getting, that still may not be enough given the price tag. Another scenario is that the Dodgers will look to create their own cable sports channel, as the Yankees have with YES. That way the team can keep not only subscriber fees from cable and satellite companies, but also advertising revenue.
Sports channels are some of the most expensive on the cable dial. ESPN goes for north of $5 per month per subscriber. Local channels also come at a steep price. According to SNL Kagan, an industry consulting firm, Fox Sports West costs more than $2.60 per month per subscriber, and Prime Sports runs more than $2.50. Time Warner Cable is said to be seeking more than $3.50 for its new channel, although the company would only say that its plans are not yet finalized.
Those costs, of course, eventually get passed on to subscribers. Currently, cable and satellite TV subscribers pay for Fox's two regional sports channels. Time Warner Cable is adding both an English and Spanish sports network to the mix. Later this year, the Pac-12 conference will launch its own channel (at a cost of about 80 cents per subscriber). If the Dodgers launch their own network, consumers could find themselves paying for six regional sports outlets.
Typically, these channels are offered on all packages, meaning folks who don't watch a lot of sports end up paying too. Networks and local teams have resisted efforts to put such channels on specialty tiers, although both may be pushing their luck if Angelenos end up with six different local sports channels.
The Dodgers also have a broadcast deal wth CBS' KCAL-TV, which carries 50 games. Those will likely go away because the team can get more money from cable than broadcast. KCAL is also going to lose the Lakers when Time Warner Cable's deal kicks in next season.
Photo: Peter Guber at a Golden State Warriors basketball game in Oracle Arena in Oakland, California. Credit: Getty Images
From the LA Times Company Town Blog...click here for the latest industry news.
Peter Guber is bringing some Hollywood flash, and drama, to the Dodgers.
A longtime player in film and television, Guber, who is part of the Magic Johnson-led group that is buying the team for a record $2 billion, is a largely unknown commodity in sports circles. But he is a much more visible, and complicated, figure in the entertainment world.
Guber and Magic Johnson have joined forces before, including on the Dayton, Ohio, single-A minor-league affiliate of the Cincinnati Reds, which they continue to own. Guber also once owned the Dodgers’ triple-A affiliate when it was located in Las Vegas.
In Hollywood, Guber, 70, has had a hand in some of the best-known movies of the last four decades -- including “Batman,” “Rain Man” and “Midnight Express” -- but also has a checkered record, stemming primarily from his troubled tenure as head of Sony Pictures.
Beginning his career as a film and record producer, Guber came to run Sony in 1989. On his watch, the studio launched such TV shows as “Mad About You” and films including “Terminator 2” and “City Slickers.” But Guber also drew criticism from established Hollywood figures including director Michael Apted and producer Rob Cohen, who said Guber deceived him in negotiations.
Guber, who left Sony in 1994, later became the subject of a book, “Hit and Run: How Jon Peters and Peter Guber Took Sony for a Ride in Hollywood,” which painted a largely unflattering portrait of Guber and his former partner.
Guber has also drawn supporters in the industry. Bradley Fuller, a producer who is working with Guber’s current company, Mandalay Entertainment, on a new version of Alfred Hitchcock’s “The Birds,” said in an interview on Thursday that he admired Guber's people and deal-making skills.
“He’s a very compelling personality,” Fuller said. “When you come out of a meeting with him you find yourself saying, ‘Let’s do things the way Peter wants to do them.’” Guber could not be reached for comment.
In recent years, Guber has been expanding into sports via his subsidiary, Mandalay Sports Entertainment. He is a co-owner of the Golden State Warriors and also is an owner of a host of minor-league baseball teams -- including the New York Yankees’ triple-A affiliate in Scranton/Wilkes-Barre. Guber will not have to divest his minor-league teams as a result of a Dodgers deal.
Although Guber’s involvement brings an element of Hollywood know-how, fans could be forgiven for being wary of an owner who has an entertainment pedigree. It was less than a decade ago that the team was owned by 20th Century Fox parent News Corp. and run by former Warner Bros. honcho Bob Daly -- who later admitted that selling the team to Frank McCourt was a mistake.
Photo: Matt Loeb, head of the International Alliance of Theatrical Stage Employees, at the union's office in Studio City in 2011. Credit: Bob Chamberlin / Los Angeles Times
IATSE fights to protect Pension and Health. In a sign that the International Alliance of Theatrical Stage Employees may be headed for a showdown with the major studios, union leaders told members that they would "hold the line" on their health and pension benefits.
Matt Loeb, president of IATSE, and members of the union's West Coast bargaining committee sought to assure the rank and file that they were standing their ground in contract negotiations with the producers that ended on Monday without a deal.
"IATSE is continuing to hold the line on issues that are of importance to the membership -- health benefits, pension benefits and working conditions,'' Loeb and his colleagues said in an email to members distributed this week.
"We anticipate resuming negotiations prior to the expiration of the current agreement,'' the email continued. (The current contract expires July 31 of this year). "We remain committed to a new agreement that protects the needs of the membership and we'll continue to keep you apprised of any developments."
IATSE represents more than 100,000 entertainment industry workers, including camera operators, set decorators, grips and others who work behind the scenes on movies and TV shows.
People close to the negotiations say the sides remain divided over how to close a large deficit in the union's health and pension plans -- projected to be at least $300 million over the next three years -- because of investment losses and rising medical costs. The health and pension plans are funded by residual payments and employer contributions.
From the LA Times Company Town Blog...click here for the latest industry news.
Hulu thinks different. Hulu Chief Executive Jason Kilar chose the advertising agency's conference in Los Angeles to do his own riff on Apple Inc.'s "Think Different" campaign.
Instead of saluting "The Crazy Ones" from the memorable TBWA/Chiat/Day ad campaign from 1997 that heralded the rebirth of Apple -- and featured some seminal figures of the 20th century, including Dr. Martin Luther King, Mohandas Gandhi and Albert Einstein -- Kilar offered his own pantheon of innovators.
Kilar saluted those who strove to do better -- including Walt Disney, who conceived of the idea for Disneyland while sitting on a park bench in Griffith Park, watching his daughters ride a merry-go-round; James Dyson, who invented the bagless vacuum cleaner (and brought a sense of industrial design to the bland household appliance), and Steve Jobs, whose iPhone relegated the rotary dial phones to museum pieces.
"I can think of no bigger inspirations for looking at the world around you and looking for a better way," said Kilar, speaking Wednesday at the American Assn. of Advertising Agencies conference at the Beverly Hilton hotel.
Hulu, said Kilar, strives to bring the same relentless innovation to television. "If we're really on our game people will look back on it and will say, "Wow, I can't believe TV was like that in 2007."
The online television service, which is jointly owned by media giants News Corp., Walt Disney Co. and Comcast Corp.'s NBCUniversal, as well as Providence Equity Partners, brought in $420 million in revenue last year. The site, which features television shows from the current season, attracted some 37.7 million viewers last month.
Kilar articulated his oft-repeated vision for the future of television, saying it will become more personalized (the way Internet radio service Pandora delivers music tailored to a listener's taste) and social.
"TV is one of the most social mediums.... The things people talk about most are the weather and television," Kilar said. "With digital, we should be able to encourage social to the core. It's going to be a big, big deal."
Kilar also highlighted some of Hulu's attempts to re-imagine advertising, including allowing the viewer to choose which ad they'd like to watch, or to skip commercials they don't find relevant. Such efforts increase the viewer's ability to remember the promotions they've watched, Kilar said. "The recall goes through the roof because they're mentally engaged with the ad."
Judge tosses out effort to stop SAG-AFTRA merger vote, but leaves open other parts of the lawsuit. A federal judge has a blocked a request for a temporary injunction that would have scuttled a vote on merging the Screen Actors Guild with the American Federation of Television and Radio Artists.
Ed Asner, Martin Sheen and Ed Harris were among a group of actors who filed a lawsuit in federal court in Los Angeles last month seeking an injunction to stop SAG from calling for a vote on the proposed merger with AFTRA.
But, as was widely expected, a federal judge denied the request, clearing the way for the unions to count ballots this Friday. The merger would be ratified only if at least 60% of those who vote approve the plan.
“Voting in favor of merger may or may not be in the best interest of the majority of union members,'' wrote Judge James Otero. "But the decision, for better or worse, belongs to the members –- not to plaintiffs, and certainly not to the court.”
The lawsuit alleged that the SAG board breached its fiduciary duties to conduct an actuarial impact study detailing the effects of the proposed merger on health and pension benefits for SAG members. SAG's board overwhelmingly approved a plan to merge with the smaller actors union, arguing that doing so would give them more leverage in negotiations with the studios and end years of turf wars between the two labor groups.
“We are pleased with the court’s action denying the requested injunction and dismissing one of the plaintiff’s major claims in this matter,'' SAG Deputy National Executive Director and General Counsel Duncan Crabtree-Ireland said. "We are also gratified that the court has indicated that the plaintiffs are unlikely to prevail on their other claims. It has been our position all along that these complaints were completely without merit and that the members will ultimately decide the future of their unions.”
Photo: Glenn Close on the set of FX's "Damages" in Steiner Studios in Brooklyn, N.Y.
Credit: Jennifer S. Altman / Los Angeles Times
From the LA Times Company Town Blog...click here for the latest industry news.
New York Mayor touts NYC production and film incentives. In a bid to further expand film and television production in New York, Mayor Michael Bloomberg along with the city’s film commissioner Katherine Oliver are touting the opening of five new soundstages at Steiner Studios in the Brooklyn Navy Yard.
The additional stages will add 45,000-square-feet to the studio, which has been home to such movies as New Line Cinema's “Sex and the City” and Universal Pictures' “The Adjustment Bureau,” as well as television series including HBO’s “Boardwalk Empire” and FX’s “Damages.”
Bloomberg this week also announced the launch of new initiatives to support production growth in New York, including providing $500,000 in grants for digital training programs and a new entertainment component to the city’s partnership with NYU’s Stern School of Business.
"A little over a decade ago, New York City struggled to attract the lucrative production industry to film here," Bloomberg said. "Now the city is such a popular and prosperous home to hundreds of films and television shows, [and] we have to work hard to keep up with the demand for stages and production facilities.”
New York City has enjoyed an increase in production activity in recent years thanks to an expanded film incentive program that provides a 30% tax credit on production expenditures. New York allocates about $400 million a year in funding for the program, four times the level in California.
Last year, 188 films and 140 television series filmed on location in New York City while at least 13 television pilots are expected to shoot there this spring.
“These new soundstages at Steiner Studios will create jobs, and expanding our workforce development programs with new grants will help the next generation of production professionals start their careers on the right track,” Bloomberg said.
Photo: The Bengals battle the Texans. NFL football is among the sports that Fox broadcasts nationally. Credit: Al Behrman/Associated Press
Just what we need. News Corp., parent of Fox Sports, is again mulling over a national cable sports channel that could rival Walt Disney Co.'s dominant ESPN. NBC already is trying to battle ESPN with its NBC Sports Network and CBS also has its own sports channel. While Bloomberg said the new service could start as early as late 2012, Fox insiders were downplaying the idea as just something that is being kicked around and may end up going nowhere. Additional coverage from the Los Angeles Times.News Corp.'s Fox is again weighing starting a national cable sports channel to rival Walt Disney Co.'s ESPN juggernaut but there is no guarantee that such an effort will get off the ground.
Fox has toyed with the idea of creating a national sports network for more than a decade. It already owns 20 regional sports networks, including Fox Sports West and Prime Ticket in Los Angeles. Its Fox Broadcasting Company has long-term deals for professional and college football as well as baseball and NASCAR.
A Fox Sports spokesman declined to comment on the renewed speculation about a national sports channel, but people familiar with the matter said there are no immediate plans and dismissed a report in Bloomberg that said the new channel could be launched as soon as late 2012. Given how lucrative its regional channels are, Fox and News Corp. executives have for the most part viewed a national network as a luxury item, not a necessity.
Though Fox Sports is an established brand, going after ESPN would not be cheap. ESPN and its various spinoff channels have dominated the cable sports space and spend heavily to lock up rights. For example, ESPN is paying an average of almost $2 billion a season for "Monday Night Football."
NBC's new parent company Comcast Corp. is also looking to compete more aggressively against ESPN with its NBC Sports Network. NBC has the rights to the Summer Olympics in London and will use the games to boost awareness for its channel.
Sports teams and leagues would no doubt welcome another competitor to ESPN because it would mean one more bidder for rights, which could lead to even higher prices.
Consumers, however, may not have the same reaction. Cable sports channels are already among the most expensive sources of programming. ESPN, for example, costs cable and satellite operators more than $5 a month per subscriber, according to industry consulting firm SNL Kagan. (USA Network, for comparison, costs just over 60 cents per month per subscriber.) Much of that cost is passed on to the consumer. If another channel emerges and drives bills even higher, there could be renewed calls that high-priced sports channels should be sold as separate packages instead of being bundled into basic cable service.
"At some point there may be a real move for a la carte programming," warned David Carter, executive director of USC's Sports Business Institute.
Photo: Katie Couric with friends. Credit: Philippe Cheng/Sesame Workshop.
Set the alarm clock. Katie Couric will make a brief return to morning television next week when she fills in for Robin Roberts on ABC's "Good Morning America." Couric, who was the longtime anchor of NBC's morning news show "Today" before becoming anchor of CBS' evening newscast, is launching an afternoon talk show for ABC's parent Walt Disney Co. this fall. For Couric, the brief return to the morning slot is a chance for her to promote herself and the new show. Wonder what "Good Morning America" would do if the show beat "Today" next week. I know -- highly unlikely. More on Couric's stint from TV Newser.
Welcome back. Katie Couric's not the only big news anchor making a comeback. San Diego's own legendary anchor Ron Burgundy is also returning. Will Ferrell went on Conan O'Brien's TBS show Wednesday as one of his most famous characters to announce a sequel to the 2004 hit. Details from USA Today.
Welcome to Hollywood. Ron Tutor has a big house, a big boat and a big construction business. He also has Miramax, which needs so me construction. The Hollywood Reporter looks at Tutor's Hollywood learning curve.
Who's the fairest of them all? Relativity Media's "Mirror, Mirror" is something of a change of pace for the production company, which is more known for action films than family comedies. Variety looks at Relativity's big bet with its retelling of the "Snow White" story.
Earl Scruggs died at 88.
-- Joe Flint
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