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Why the Rangers New TV Contract Makes Sense

Gil Lebreton at the Fort Worth Star-Telegram makes a case that the Texas Rangers might be worth the ridiculous sum of money their new television contract will pay out.

Fox Sports Net agreed to pay the baseball team $1.6 billion (not $3 billion as originally stated) to broadcast games for the next 20 years (not 30 years). That’s almost 100 percent more than the current figure of $45 million per year, but it still makes sense financially for both teams.

From the Rangers perspective, it’s obvious: They make a ton of dollars that will help them sign players, upgrade their franchise, and compete in the American League with teams such as the New York Yankees and the Boston Red Sox. (The Yankees mastered the art of subsidizing their pockets with TV money by starting Yes Network, probably the single smartest move made by the late George Steinbrenner.)

The money also works on the other side of the equation.

Fox Sports, more specifically Fox Sports Southwest, is on the verge of losing its rights to broadcast Houston Astros games. This means that they can show the Rangers – a bigger, more important Texas franchise – all over the state. The Dallas-Fort Worth metro area is enormous; the rest of the state even larger. If you show it, the ratings will come.

Plus, as Lebreton notes, the channel now knows what it will program in primetime… for the next 20 years. Throw in cheap-to-produce pre- and post-game shows and you have yourself a nice little product. That $1.6 billion practically pays for itself.

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