What Do New TV Deals Mean for the Reds?

As Reds fans we continuously hear certain words that can be quite irksome. They are usually “small market”, “payroll”, “attendance”. It could be associated as being the “haves” and “have nots”. With Cincinnati being baseball’s smallest market, fears will continually arise that the Reds may not be able to afford certain players. Part of those fears were partially put to rest with the amount of the checks Reds owner Bob Castellini has signed over the past two springs.

Actually, you could say it all began when the Reds shocked baseball prior to the 2010 season when they signed Aroldis Chapman to deal for six years and worth $30.25 million.

The snowball grew larger.

Sep 20, 2012; Chicago, IL, USA; Reds owner Bob Castellini in attendance at the game against the Chicago Cubs at Wrigley Field. (Jerry Lai-US PRESSWIRE)

Prior to the 2011 season, Jay Bruce (6 years, $51 million) and Johnny Cueto (4 years, $27 million) were locked up for a while with new deals. This spring, Brandon Phillips (6 years, $72.5 million), Joey Votto (10 years, $225 million), and Sean Marshall (3 years, $16.5 million) were inked to new contracts as well. Marshall’s deal will start next season and Votto’s will not hit the books until 2014. Votto is due $17 million next season under the terms of his current contract.

You look at those numbers and it is truly daunting. Take a look at those dollar amounts for these six players, add ’em up, and you get (please sit down for this) $425.25 million. $314 million of those deals were executed this spring alone.

And how do these new MLB and TV deals fit in here? It means more money for the Reds.

The current deals MLB has with ESPN ($306 million annually), FOX ($257.1 million annually), and TBS ($148.6 million annually) come to a total of $711.7 million per year. Those monies are equally distributed among all 30 teams. This currently provides $23.72 million to each team, minus any associated expenses. All three deals were set to expire after the 2013 season.

ESPN upped the ante…considerably. Just last month, the network and MLB had come together to announce the largest deal in the league’s history: 8 years for $5.6 billion. Yes, with a “b”. That would increase the WWL’s pay to MLB from $300 million per year to $700 million.

Now, it appears that FOX and TBS are following ESPN’s lead. According to The Biz of Baseball, FOX will be delivering a total of $4 billion ($500 million annually) to MLB while TBS will contribute another $2.4 billion ($300 million). Both of these deals run for the same 8 year period as ESPN’s from 2014 thru 2021.

All total, that’s $12 billion with these new agreements. When these new deals go into effect for the 2014 season, each MLB team will see an increase from $23.72 million to $50 million per year of these deals. Again, these numbers do not include any associated expenses, but I believe you get the idea. We’re talking about a huge piggy bank and large wallets.

Hard to imagine what the Reds will be able to pull in when their current deal with Fox Sports Ohio is ready for negotiations on a new contract. The current deal awards the Reds $30 million until 2016. This is according to Cincy Biz Blog. Seeing as the Reds sit as high in the ratings as they do (and Cincy Biz Blog reports they were #2 at the All-Star break), I imagine there will be a significant increase from anyone wanting to carry the Reds. This also comes into play.

On Opening Day for this season, the Reds payroll was (according to Cot’s Baseball Contracts) $87,826,167. Imagine having a payroll up an extra $50 million? Well, it sounds significantly easier than it really is.  The team does need to account for arbitration and the yearly raises that are awarded to players which are not arbitration eligible.  Try to re-sign some players that you feel are valuable to the core of the roster. Still, these new TV deals mean that the Reds could go out and possibly be a little more aggressive within the free agent market.

Of course, that could now be said for the other 29 teams as TV dollars are skyrocketing.

So if you were one that has been fretting over the chunk of change the Reds committed these past three years, it might not be as painful as you think. These new deals should help alleviate some of these contracts. Also, with the Reds now making the postseason, there are additional revenues to be gained on that front.

Now, imagine, albeit cautiously, adding another star player or locking up another promising young guy to a long-term deal. Maybe even a couple.

I said cautiously…