Galaxy Strike New TV Deal

According to a story that broke in the Los Angeles Times on Tuesday evening, the Galaxy are set to announce a 10 year, $55 million deal with two new Time Warner Regional Sports networks to televise Galaxy games.  The new networks (one in Spanish and the other in English) are fighting for content in the crowded LA Sports market and this deal guarantees live programming from March to October.  According to the Times’ story, the deal will be officially announced on Friday.

The size of the deal is staggering.  NBC recently paid $30 million for 3 years of Major League Soccer on a national level and now Time Warner is offering $5.5 million per year for a team that never topped 16k viewers over the last year.  The deal is especially extraordinary because Major League Soccer’s national television partners will certainly demand that the league’s showcase franchise regularly appear on their broadcasts.  How many games will the new networks get as part of their package.  Moreover, the same story suggests that the network is also chasing the rights to the Los Angeles Dodgers.  Given the overlap between baseball and soccer, will Galaxy fans be subject to tape delay as part of the new arrangement?  The Lakers recently signed on with the same network on a 20 year deal worth a reported $20 billion.

From a business perspective, it is hard to find something to dislike about this agreement. A major television partner believes that the league is a worthy long term investment.  At the same time, the deal allows the Galaxy, the league’s most aggressive franchise in pursuing star players, to fill its coffers from a local television deal at a time when some franchises are receiving no money for their rights.  Will this deal tilt the competitive balance in the team’s favor?