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MLB Reportedly Nearing Lucrative New TV Deals

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Miami, FL, USA; MLB commissioner Bud Selig in attendance before the opening day game between the St. Louis Cardinals and the Miami Marlins at Marlins Ballpark. Mandatory Credit: Steve Mitchell-US PRESSWIRE
Miami, FL, USA; MLB commissioner Bud Selig in attendance before the opening day game between the St. Louis Cardinals and the Miami Marlins at Marlins Ballpark. Mandatory Credit: Steve Mitchell-US PRESSWIRE

In August, Major League Baseball and ESPN announced a new television contract that covers the 2014 through 2021 seasons. The deal essentially doubles MLB's take from ESPN, jumping it from $360 million to around $700 million, and as it's split evenly among the 30 clubs, is essentially a free $23 million per season or so to be spent or pocketed. That isn't the only network that MLB works with, though, and it appears that a similarly large contract renewal is nearing completion with both TBS and FOX.

Under the deals, which are likely to be announced before the postseason, Fox will retain rights to the World Series and to a league championship series every year, the person said, speaking on condition of anonymity because no announcement has been made. The amount baseball receives from the two networks is likely to double to an average of about $800 million annually.

Teams were already making about $25 million per year in revenue just from the existence of these television contracts, and now, with both doubled, we're talking almost $50 million from the start for each club to work with. Or, to put it another way, the Padres, Athletics, and others would have had 80 percent or more of their payroll accounted for just from these national television deals.

In some ways, this extra money isn't a great thing for a team like Boston, who has the financial room to bump up against the luxury tax. (Not that they have to now, given they unloaded so much money on the Dodgers.) With the luxury tax more of a ceiling than it used to be under the new collective bargaining agreement, giving teams who would have stopped spending at $100 million or $130 million an extra $20-25 million to play with allows them to catch up, without the Red Sox and Yankees able to go higher to counter.

That's good for league parity in terms of how much is paid out, and great for players who can reap the benefits of all of this extra money. For the Sox, though, it doesn't do much more besides give their owners additional revenue with which to pocket. Not that that's a bad thing, especially with some fans concerned that John Henry and Co. don't have the revenue streams for both baseball and soccer. Even if the difficulties are not true, bringing in more money only helps to stifle that line of reasoning.