Lakers, Time Warner Agree to 20-Year Cable Deal
The immediate impact is that Laker road games will no longer be seen on local KCAL 9. But the new channels' carriage throughout the Lakers' territories in Southern California, Nevada and Hawaii should help make up for the households lost with the lack of local television. For the Lakers it's an obvious win, especially with the addition of the Spanish language network in a market with a large Spanish-speaking population that loves the team.
On the surface it would seem to be distressing that a team with a $91 million payroll is on the verge of reaping an even greater windfall with a huge new TV deal. While the league does allow teams to keep all of the revenue it makes from it television contracts, the NBA's salary cap should prevent the league from running into Major League Baseball's problem of the Yankees versus everybody else.
For Time Warner, it appears to be a win on many different levels. First, the Lakers get great ratings, meaning the network will have no trouble generating ad revenue. Second, as Kurt Helin points out at Pro Basketball Talk, it gives all of the other teams in the market leverage. The Lakers, Clippers, Dodgers, Angels, Kings, Ducks, USC and UCLA have all been fighting for space on L.A.'s two sports cable networks - Fox Sports West and Fox Sports Prime Ticket. With pro and college basketball and hockey all going at the same time, it can get crowded. Suddenly the other entities have a lot more leverage when it comes time to re-up.
But it also means Time Warner will have negotiating leverage of their own when it comes to having the networks picked up by other distributors like Charter, DirecTV and Dish Network. Reminiscent of 1997 when then-Dodgers owner Rupert Murdoch moved the team's Opening Day game to Fox Sports Net West 2 (now FS Prime Ticket) in a successful effort to strongarm cable operators who had balked at carrying the network. Similarly other carriers will be more willing to get a deal done if it prevents Laker fans from switching services to see their team.
However it could mean Time Warner subscribers may have to keep waiting for the NFL Network. The operator has been loathe to work out a deal with the league and the revenue that could be earned from this Laker deal means that (in L.A. at least), TWC won't be in any hurry to bend to Roger Goodell's demands. Although with the way things are going, NFL Network may not have too much new programming to show anytime soon.