The Los Angeles Kings are cashing in on their playoff success. The team recently announced that they have reached an agreement with Fox Sports on a new television contract that will keep Kings hockey on Fox Sports West through 2024. In the deal the Kings are guaranteed a sum of approximately $250 million.
The deal, as reported by the LA Times, not only paints a clear picture of LA's recent success but also offers an idea of how volatile the television market is in Los Angeles.
Let's give credit where credit is due. The club's playoff run likely tacked on to the already large price tag they were seeking for television rights. Without a run that may very well end with the Cup, the team wouldn't have quite as much leverage with Fox Sports as they do right now. In terms of timing, the Kings could not have reached a deal at a better time. The two sides deny that this played a role in the negotiating process but it seems that any incentives or bonuses that were tacked on to the deal were mostly fueled by the team's quest for the Cup in 2011-12.
However, the deal's large price might have more to do with recent events off the ice than it does with events on the ice. Time Warner Cable was able to secure the rights of the Los Angeles Lakers away from Fox Sports which allowed the Kings to leverage their price, threatening to also jump ship and join TWC. This bargaining tactic helped inflate an already large asking price and resulted in the final $250 million price.
The new deal for the Los Angeles Kings is one of the most lucrative deals in all of hockey. Averaging out at roughly $21 million per season, the Kings will now rank among the elite teams in terms of television revenue. The report states that LA's recent success didn't play a major role in negotiations but it does indicate that there are incentives in the contract that would reward the Kings for their success on the ice.
What does this deal mean for the Kings now that the two sides have reached an agreement?
Simply put, the Kings should have no issue signing their stars to new contracts when they expire. Jonathan Quick's current contract is set to expire at the end of 2012-13 and the elite goaltender is due a hefty raise. It's safe to assume the Kings will have no issue extending Quick when the time comes thanks to their newly secured television deal.
The deal also may allow the Kings to make a bigger splash in free agency this summer, if they so desire. The Kings only have five contracts expiring at the end of 2011-12 (Fraser, Parse, Stoll, Penner and King) but they could pursue slightly more expensive options thanks to their recent influx of cash.
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@SpreignedAnkle In cases where teams are making enough to spend near or at the cap, that is true. For teams that are struggling financially to meet the continually rising floor, it's another matter entirely. Unfortunately for the league (and fans of a lot of teams), many more teams fall into that second category than are anywhere near the first one. Not saying that being able to spend to the cap is necessarily the recipe for certainty in winning the Cup, but being fairly sure of at least keeping a team's core together year over year is usually a good place to start winning consistently.
@miendiem @SpreignedAnkle I agree with some teams that is the case (for goodness sake, some teams have trouble reaching the cap FLOOR), but I was specifically talking about the Kings' situation. The cap is at a little over 60 million per season, and AEG has no issue spending to the cap as it is, so any lucrative television deal is just icing on the cake.I have no doubts, though, that a lucrative TV deal would definitely be a boon for those teams that don't have as much ownership investment.
So now they can afford Alb... err... Sorry, wrong sport. heheh Seriously, though, it must be nice to be a sports fan in very large media markets like this, where one can count on their club getting massive additional revenue streams based on media and various other sales. I expect some bare fraction of this number to be coming the Blues way when their current contract with FSMW comes up (I believe in a couple of years).
@miendiem It's a total farce. Believe me, as a TWolves fan, I know. We get about $10 million per year. With the Lakers new deal, they will be getting over $200 million per year. That's frickin absurd. No wonder why the Maloofs want to move the Kings to Southern California.