Will TWC Outfox News Corp.?

The winning $2.15 billion bid by the Magic Johnson-fronted new owners of the Los Angeles Dodgers came with a big expectation: that the booming value of sports television rights will provide the team with a quick and massive cash infusion. News Corp.'s Fox Sports has an exclusive TV negotiating window through November, but sources say Time Warner Cable is expected to bid aggressively for rights as well. According to one insider, TWC execs already have made it clear to the new ownership that they are willing to advance a big chunk of revenue against rights or to enter into a joint venture on a new regional channel. TWC also could fatten the pot by cutting the Dodgers in on the cable channel it already plans to launch in October featuring the NBA's Los Angeles Lakers. That channel is not a joint venture -- the Lakers' owners are making about $150 million a year in revenue-sharing from the deal -- but the Dodgers could demand a big stake in the network in exchange for TWC locking up one of sports' premier franchises. "The trend seems to be moving toward an equity deal," says Adam Swanson, an analyst for SNL Kagan. "Having some ownership is just a richer deal for them." As an alternative to equity, the Dodgers might share in advertising revenue. Another option is to follow the example of the New York Mets owners, who created SportsNet New York in 2006 with Time Warner and Comcast -- and promptly borrowed $450 million secured by their TV venture. Half the money was distributed to the partners as a dividend. The Dodgers' bidding is expected to start at about $175 million a year during a 10- or 20-year term, which is what Fox offered outgoing owner Frank McCourt before Major League Baseball vetoed the deal. Some analysts speculate that the TV rights could ultimately go for as much as $200 million a year, which, if either Fox, TWC or another bidder is willing to strike a 20-year deal, would total a whopping $4 billion -- or about twice what the new owners paid for the team.

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