Monday, June 20, 2011

Even Scott Boras Wouldn't Approve The Fox Deal

Chris Casacchia of the Orange County Business Journal (or, as the Newport Beach pimps like to call it, the OCBJ), ran a profile of uber-agent Scott Boras earlier this month. And for the record, here's Boras' assessment of the Fox deal that is Frank McCourt's last lifeline:

Broadcasting rights played a big role in baseball’s recent takeover of the Los Angeles Dodgers, according to Scott Boras.

Owners Frank and Jamie McCourt, who struggled to fund the team’s payroll last month amid a bitter divorce, contend the team has a $3 billion, 20-year deal in waiting from Fox Sports Net.

The deal would be a lifesaver for the McCourts but bad for baseball, Boras said.

“Major League Baseball feels the rights of the Dodgers—and I agree with them—may be worth as much as $4.5 billion to $5 billion,” he said.

The McCourts are giving up “a huge premium” and Fox knows that, Boras said.

Industry watchers are keeping an eye on the Dodgers deal as a slew of big market teams will see their broadcasting pacts expire in the next four years.

They include the Los Angeles Angels of Anaheim, Philadelphia Phillies, the Chicago Cubs and White Sox and potentially the New York Mets.

“They don’t want the L.A. mark for those rights to be artificially depressed by one individual owner,” Boras said. “The owners are trying to protect the interest of all 30 teams. If I were them, I’d be doing the same thing.”

Baseball owners likely will bring in a new Dodgers owner who doesn’t need the cash infusion and will negotiate a better broadcast deal, according to Boras.

If Boras' quantitative valuation assessment is correct, Frank McCourt might be undervaluing the 20-year future broadcast rights by almost 100%. And on the qualitative side, I have to believe that Boras has accurate inside information about the other owners, when he relays that they would not be happy with an undervalued Fox deal that would be used as a comparable in their own upcoming rights negotiations.

The other MLB owners can't allow Selig to bless this Fox deal, right? Please tell me I'm right.

2 comments:

Mr. Customer said...

Go get hit by a Buick, Frank!

Steve K said...

Never thought I'd say this, but Boras is right... less money for the owners means less money for the players.