Inside the Dodgers TV deal that helped launch a dynasty

In the midst of the conversation about team expenses, the Los Angeles Dodgers’ television agreement with Spectrum came up, that is, a special clause that allows the Dodgers to retain an additional portion of their television revenue.

The signing of outfielder Kyle Tucker has caused a complete meltdown on social media, with fans from across the MLB spectrum coming out of the woodwork and criticizing the Dodgers for “ruining baseball.”

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Tucker will earn $60 million per season, an incredibly high average annual value, placing him among the highest-paid athletes in the sport. He joins a team already filled with stars: Mookie Betts, Shohei Ohtani and Freddie Freeman, the reigning World Series champions.

As a result, an agreement between the Dodgers’ owners, the Guggenheim Group and MLB has begun to circulate.

Bill Shaikin of the LA Times described the terms of the deal between MLB and the Dodgers that have actually led to the team keeping a larger share of their revenue.

What happened to the Dodgers media deal?

While attempting to unseat Frank McCourt as MLB owner, the league blocked a $3 billion deal between the Dodgers and Fox Sports, prompting McCourt to file a lawsuit in bankruptcy court.

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McCourt was trying to sell the team for full value and needed to make sure bidders knew what to expect from a television deal.

In bankruptcy court, MLB agreed that the fair market value for the Dodgers’ television deal was Fox’s offer, meaning the league would accept its 34 percent cut based on those terms.

However, the Dodgers ended up reaching a deal worth more than $8 billion, although MLB was unable to get more out of the new deal.

During an appearance on Dodgers Dougout with Doug McKain, Shakin explained how the deal came together.

“Simply put, to get Frank McCourt out, who was MLB’s target, they had to settle with him in bankruptcy court,” Shakin said on the show.

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“And part of that deal was, how are you going to value the television contract? And since at that time there was no television contract, because a new owner had not even been selected, they did the best they could.

“And Guggenheim came forward with a really great offer that I think exceeded even MLB’s wildest expectations. MLB wasn’t thrilled, but they’re honoring the terms of the deal, and that’s where we are.”

Why didn’t MLB fight the Dodgers over the deal?

MLB tried to push for new terms that would keep the Dodgers on the same level as other teams, but the settlement in bankruptcy court was a major obstacle.

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However, as Shakin points out, the Dodgers’ new owners, Guggenheim, worked with MLB to find a middle ground.

“So in a normal situation, Major League Baseball would have said, this is an incredibly high and good deal for you, and we’re happy, but we have to share this money like we share any other money.

“And in this case, MLB could only push so far because Guggenheim was willing to work with MLB to a certain point. And then Guggenheim could have gone back to court and said, ‘We have an agreement, please, Mr. Judge, enforce the agreement. That’s what you’re here for.’

“And the court, as they say in legal circles, has jurisdiction over the agreement, which means they handle everything.

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“So MLB could have stuck with the original deal, which was not as favorable as the one they got in the negotiations with Guggenheim.

“Is it the same for every other team? Absolutely not. Is it a competitive advantage for the Dodgers? Sure. Now, is it as big a competitive advantage as some people are making it out to be? I don’t think so because the contract itself is much more than the individual amount the Dodgers are saving each year.”