Braves could benefit from baseball's new TV deals

Macon TelegraphSeptember 2, 2012 

The Atlanta Braves are set to have a very active offseason. With a tremendous amount of money coming off the books, along with several key positions needing an upgrade, the Braves could be one of the busiest teams in baseball.

But a recent development may give the Braves even more money to play with, which in turn could allow general manager Frank Wren even more flexibility to improve the team for 2013 and beyond.

ESPN signed a new eight-year deal last week that will double its annual fees to MLB. That could increase the amount of money each club receives from $12 million per year to a little over $23 million per season.

The new ESPN contract will start after the 2013 season, which is also when the deals for FOX and TBS expire. The bidding for those contracts is going on now, with both networks wanting to renew. But there could be competition this time around, which could drastically increase the money baseball will get from TV networks.

NBC is branding its new cable channel (NBC Sports Network) and wants content. They were in business with baseball for years, and rumors persist they are going after the TBS deal. It might be difficult for NBC to go after the World Series, as it airs the NFL on Sunday nights in the fall.

CBS is also rumored to be interested in being part of a new package. There is even talk CBS might join forces with TBS to try and wrangle the World Series away from FOX.

Whatever combination is the outcome, the annual fees for television networks to carry baseball is certain to skyrocket. Right now, TBS and FOX pay just over a combined $405 million per year, which breaks down to $13.5 million per team. If that number doubles in a new long-term deal, each team would obviously get around $27 million.

Take the extra $9 million from the ESPN deal each team will get and combine it with the extra $13.5 million it might get from a new broadcast/cable contract and that equals an increase of $22.5 million.

This will not happen until 2014, but it doesn’t mean teams cannot start planning for the future. For a team like Atlanta, which might decide on some long-term contracts this winter, the new money must be a consideration.

But will Liberty Media, the Braves’ owners, allow the team to use the extra money on improving the product? We are told by Terry McGuirk, Atlanta’s chairman and CEO, that he and team President John Schuerholz set the payroll. But it’s conveniently near the same level it was when Liberty bought the franchise five-plus years ago, and the scuttlebutt has always been that the cap is set by the folks in Colorado (where Liberty Media is headquartered) – not Atlanta.

Wren has a unique opportunity to construct a team for the next 5-10 years with the decisions he could make this winter. Everyone is talking about Boston’s new financial flexibility, after the trade with the Dodgers that freed up significant payroll. But Atlanta has perhaps the best long-term financial picture of any team in baseball.

The Braves are tied up to only one long-term contract – second baseman Dan Uggla. He is owed $13.2 million in each of the next three years. That’s it. Obviously, there are players who could make significant money through arbitration, but Uggla’s deal is the only guaranteed commitment past this season.

Atlanta has around $46.5 million coming off the payroll after the current season. This amount does not count the money paid to the new players acquired in trades (as we do not know the full obligation the Braves have in those deals), but it does include the $5.5 million of Jair Jurrjens, who will likely be non-tendered.

This is half this year’s payroll. Also, the Braves could free up an additional $20 million if they do not pick up the 2013 options of Tim Hudson and Brian McCann. That is unlikely, however.

The Braves could wait and decide McCann’s future later, but it might be best to figure out what they’re going to do this winter, to coincide with the other decisions that must be made. Do the Braves simply pick up that option for 2013 and allow McCann to become a free agent after next season? Do they try to re-sign him to a long-term contract? Or do the Braves trade McCann to gain even more financial flexibility?

Hudson’s option for 2013 is for $9 million, which is very affordable for a veteran starter who has been the leader of the rotation for the last several years. Also, the Braves have a $6.5 million option on left-hander Paul Maholm. Considering how well he’s pitched since being acquired in July, Maholm will probably be back. That’s also pretty affordable for a middle-of-the-rotation starting pitcher.

Martin Prado’s contract is up after next season, so the Braves will have to decide on his future. They must decide if they want to commit to Prado for the long-term. If so, how much is he worth? If not, do they trade him this winter or just let him walk away after 2013?

The Braves know there will be significant competition for outfielder Michael Bourn, who will be a free agent this winter. Do they invest in Bourn, even knowing his speed could decrease as he gets into his mid-30s in a long-term contract? Can they even outbid Washington and Philadelphia, two teams expected to go after Bourn this offseason?

Does Atlanta try and lock up some of its young stars, like Jason Heyward, Freddie Freeman and Craig Kimbrel? Heyward is eligible for arbitration for the first time this winter, so Atlanta could perhaps offer him a five or six-year contract. Freeman and Kimbrel are a year away from arbitration, making them four years away from free agency.

If the Braves want to sign these three players, they would have three key spots guaranteed for a significant period of time. This would perhaps give the team a decent annual rate for all three, which could help in planning knowing three important positions are financially set.

With Atlanta having so much money coming off the payroll, the question then gets back to the budget. Reports have the Braves’ revenues up this season. So does that allow for a possible increase in the payroll for 2013? The Braves ability to have $46 million available is based on a $93 million budget. If this year’s budget was increased for 2013, Atlanta might have even more money available for next year’s roster.

Again, you go back to the TV deals. If the Braves get perhaps as much as an additional $20 million starting in 2014, they can plan now on estimated payroll limits for the next five years. So if, for example, they increased the 2013 payroll up to $100 million, the additional money from TV could pop the 2014 payroll up to upwards of $115 million.

This is, of course, as long as Liberty Media will allow the Braves to make these investments. They could simply pocket the increased revenue. But if this company does plan to sell the Braves in the next 5-10 years, it would behoove them to invest in the team to make its value higher.

We all know Atlanta’s local TV deal is not a good one. McGuirk has admitted the Braves are locked into an unfriendly contract with Fox Sports. He blames Time Warner, who supposedly agreed to the deal before they sold the franchise to Liberty.

McGuirk was a former television executive for Ted Turner, so it’s hard to imagine he was not involved. He has proclaimed that while other teams (Dodgers, Angels and Padres) are able to benefit greatly from their new local TV deals, the Braves will not be as fortunate.

But the saving grace might be the new national TV contracts. If Atlanta’s front office knows around $20 million more could come from that starting in 2014, they can better structure future payroll limits.

And this is the winter they might want to do the heavy lifting. It’s not often a team has half its payroll coming off the books, and with more revenue on the way in the coming years, this will be the winter the Braves could effectively construct a roster that will be competitive for the next 5-10 years.

 

Listen to “The Bill Shanks Show” from 3-6 p.m. weekdays on WPLA Fox Sports 1670 AM in Macon and online at www.foxsports1670.com. Follow Bill on twitter @BillShanks and email him at thebillshanksshow@yahoo.com.

 

 

 

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