This is what so many Phillies fans seem to be waiting for: the Phillies to cash in and get a new deal. One blog, Sports on Earth, reported yesterday that the Phillies would be signing a new television deal within the next 30 days:
According to a source with knowledge of the talks, the deal is expected to be completed within the next 30 days. That’s going to matter a great deal for how the team operates this winter.
Phillies President Dave Montgomery did not seem too enthusiastic a few weeks ago but did acknowledge the team was having discussions with the incumbent, Comcast Sports Net:
INQ: Have negotiations begun on a television contract?
DM: We are in a position where we can only talk to our incumbent. We are having some discussions. I don't know how fruitful they will be.INQ: Why is that?
DM: Contractually, we have a period of time with Comcast where we can only talk to them about a renewal.INQ: But you can talk to others before the deal expires?
DM: Oh sure.INQ: Why are the talks not fruitful?
DM: We'll see.INQ: What sort of moment is that for this organization?
DM: It's an opportunity. The only thing I will cautious is, compared to others, we've had a nice deal. You see some situations where clubs have had a substandard deal. We've enjoyed a very solid relationship with Comcast ever since we were a part of forming Comcast SportsNet in 1996. Yes, we are coming to the end of the current deal. Yes, we are in a period of time to only speak to them. We'll see whether we can take advantage of that.INQ: It expires after the 2015 season, right?
DM: Correct.INQ: Is there a possibility of an ownership stake in the network?
DM: Possibility. But we'll see where it really leads.
So, if they are going to close a deal with anyone, it would be Comcast Sports Net at this point. But before you jump up and down and celebrate, consider the following:
1. Other Teams Are Going To Get New Deals Too
The Phillies are not the only team going to be cashing in on a new television deal. As Montgomery noted, some of those teams had "substandard" deals. So while the Phillies could take two steps forward in revenue, other teams could be taking eight. The Houston Astros could have a lot of money to spend, too, despite a 0.04 Nielsen rating for a game a few weeks ago. When everyone has a lot of money to spend, what happens? Yes, ALL salaries go up. That $20 million player you think the Phillies will sign will suddenly be a $30 million player and the Phillies are in the same position as before.
2. The Luxury Tax Still Exists
OK, maybe for the first year or two the Phillies could blow the luxury tax out of the water. But guess what? Major League Baseball will correct the luxury tax based on the new revenues teams are receiving. While a billion dollars seemed like way too much money for the Los Angeles Dodgers, they were banking on the television deal to bring them much revenue. The Phillies could overspend while the luxury tax is what it is, $189 million in 2014. But that number will rise as money in teams' pockets rise, too.
3. There Are Few Quality Free Agents
Want to sign someone who was nine games under .500 the last two seasons with an ERA approaching 5? For $20 million a year? That would be Tim Lincecum, considered one of the top free agent pitchers this offseason. More and more teams that have would-be free agents are signing them early and often, mostly because of a looming television deal. So, when Joey Votto gets $225 million for 10 years, that average of $22.5 million a year may be way below market value by the time he gets to year five. If you want to sign 31 year-old Shin Soo-Choo for $20 million a year, you might be able to do that.
Yes, There Is Still Some Advantage
The Phillies will still be a tick ahead of the pack, in the same way they were from 2007 – 2012. If Citizens Bank Park is full and the team is making the playoffs, there will be extra revenue compared to poor clubs who do not fill their stadiums. But it won't be enough that the Phillies will be the dominant players on the free agent market. It will still begin with smart scouting and drafting, sprinkling in a few free agents. And that, has always been the way.
