When Comcast announced this week it was planning to buy out for $45 billion in stock, how much do you think Magic Johnson’s ears perked up?
Johnson, of course, won five NBA titles as a player for the Los Angeles Lakers, and he’s currently a partner in Guggenheim Baseball Management, the consortium that owns the Los Angeles Dodgers. He’s practically the public face of that ownership group, and why not? Magic is beloved in L.A., and not just for winning basketball games.
Time Warner Cable, meanwhile, owns the local broadcast rights to both the Lakers and the Dodgers. TWC agreed to pay the Lakers $3 billion over 20 years for exclusive television rights, then struck a massive deal with the Dodgers that is now reportedly worth $8 billion over 25 years.
To cover the cost of the Lakers deal, TWC launched a new regional sports network, TWC SportsNet, in 2012 to air Lakers games locally in the L.A. area. That network managed to get into 6.4 million homes, and, thanks to a $3.95/month asking price, it now rakes in more than $300 million a year.
TWC is now in the process of launching another new network, SportsNet LA, just for the Dodgers, and it’s reportedly asking carriers to pay close to $5/month for it. So far, carriers are balking.
Now Comcast wants to buy out TWC. If the merger goes through, Comcast would control both those regional sports networks.
Certainly, Magic and his partners are well aware of what happened to Comcast SportsNet Houston. That RSN filed for bankruptcy protection last November after pay TV carriers refused to give in to the network’s carriage demands. Magic likely will have a few reservations about Comcast taking over operations for his team’s network, too.
To be fair, TWC doesn’t have to be bought out by Comcast to make the same mistakes with SportsNet LA that CSN Houston made. Still, what would Comcast do if they got hold of SportsNet LA? Would they force that RSN into bankruptcy, too, to gain more control over it?
The sensible thing would seem to be to lower their carriage demands for the Dodgers’ channel and combine its operations with the Lakers’ channel, turning what would be CSN LA into a two-channel RSN similar to Fox Sports West and Prime Ticket. Comcast, however, isn’t exactly famous for being sensible, and if this acquisition of TWC is allowed to happen, that should worry Magic, his partners, and every Dodgers fan in Los Angeles the most.