The Phillies TV Deal: More Money Than Amaro Can Waste?

There is a reason the Phanatic is green. - Rich Schultz

The TV deal that the Phillies have with Comcast expires at the end of 2015. How much do they stand to make on a new deal?

How about a little good news?

I've noted from time to time that the Phillies are in line for a large increase in TV revenues. Those who continue to express either concerns or delight at the Phillies "impending doom" or the prospect of a long period wandering in the wilderness are just plain wrong. Given the chortling we've heard to the south in the last week, from Braves fans rightfully salivating over an Upton, Upton, Heyward outfield, to Mark Lerner gloating over the excess of draft riches resulting from a decade of horrific losing, I figured it was time to remind you folks of the delightful structural advantages that the Phillies possess. The TV deal is probably the foremost asset, but it is a derivative one.

Let's start at the top, then?

The Phillies are awesome because of Philadelphia. Take a bow, fans. Though you are at times crass and boisterous, you care. That's more than Braves fans can say, when they can't even sell out playoff games. And Nationals fans? Well, some have cared for, what, a decade?

The Phillies have outrageously good TV ratings, though last year was disappointing. Unrelated entirely to team performance is the fact that Philadelphia is the fourth-largest TV market. The three markets ahead of Philadelphia (New York, Los Angeles, and Chicago) are all two-team cities. Thanks to the A's leaving town, the Phillies have Philadelphia all to themselves. While it is unlikely that that the Phillies can approach the money that the Dodgers or Yankees will get, the Phillies probably can expect to be in the top 5 in the National League in TV money when all is said and done, outclassed only by the Dodgers, Mets, Cubs, and maybe the Giants and Cardinals. This is a permanent, structural advantage until baseball changes its financing in some meaningful way.

So the potential audience is big. So what? Not only is the audience big, but it is enthusiastic. The team has been really good for a decade, though it has slid from 102 wins in 2011 to just 81 in 2012. The team is not throwing in the towel -- it kept Cliff Lee, Cole Hamels, Jimmy Rollins, Jonathan Papelbon, and it has otherwise shown that it will spend money, wisely or not. Yuniesky Betancourt aside, the ownership and management of the Phillies is nothing like that of the Marlins. Those folks have a serious beef.

That commitment to putting a good team on the field is likely to prevent the audience from eroding much from its 9.0+ market share in 2011. The Padres were about 3.1 by comparison. See this excellent Matt Gelb article last year for the nuts and bolts, including this factoid: the team made only $24 million from the TV deal that year. The Astros just made $80 million a year starting last year (again, see Gelb).

Hold on to your hats, though. The Dodgers are reportedly going to get $7 to $8 billion on their 25 year TV deal, or about $280 million per year. If the Phillies can shake down someone for half of that -- $4 billion for 25 years -- it would be $160 million a year. That may be conservative, if contract values continue to grow for live sports at even a fraction of the rate they have over the last 5 years.

Even after a third of the money being slurped out by MLB for revenue sharing, the Phillies' budget could get $100 - $120 million per year in local TV money -- an increase of four to five times the $24 million or so it currently makes. Add the revenues from the national TV deal for all of MLB plus the money from the ATM that is Citizens Bank Park, and you have a team that will be leaps and bounds ahead of most of its National League brethren, even after all of them get their TV deals revamped.

In the meantime, the job of the team (and the GM) is to tide them over until the cash comes, run the team efficiently, pay down their debt (not an inconsiderable issue, actually), purge the deadwood, and, probably most importantly, accept that $5 million per WAR is probably a thing of the past.

This story has a happy ending - it just takes a couple of years to get there. Hang in there, fans. I think the 2013 Phillies will be surprisingly good when all is said and done, but even if they disappoint again, I know that the franchise is just fine, and will be just fine. Baseball is a long game. Follow the money. While it is possible (Cubs), it is really hard for a team with a big financial advantage to be broken forever. Also, keep the hand-wringing in perspective: on one leg, and with everything possible going wrong last year, the team still finished at .500. That's not "broken." Ask a Royals, Orioles, or Pirates fan what "broken" means - they actually know.

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