Why do the Dodgers have so much money? Why did Magic Johnson's Guggenheim Group buy the Dodgers for a ridiculous $2.3 billion? How could the group have any money left over after such a hefty purchase?
The answer is simple: Their television deal.
The Dodgers signed an $8 billion deal with Time Warner, giving them rights to broadcast the games. The deal lasts a staggering 25 years. The Dodgers are handing $2 billion of it back to Major League Baseball, as part of revenue sharing.
Even though it's a 25 year deal, that still adds up to $320 million per year.
So how could a local cable channel be worth $320 million per year to Time Warner?
They think it is because live sports is virtually the only "DVR-proof" form of programming left these days. Everyone wants to watch sports live, which means they are stuck watching commercials. Most other programs have a large percentage of their audience recording the show and watching it later, fast forwarding the commercials.
Thus, Time Warner can charge a lot more to the sponsors, because their ads will actually be seen.
Furthermore, the Dodgers are a hot commodity (especially with a deep-pocketed ownership group), and therefore people will demand to see the games on TV. Time Warner planned to create a Dodgers-only cable channel (called Sportsnet LA), and charge cable/satellite providers a fortune to carry it.
This same situation played out with the Lakers in 2012, who now have their own dedicated Time Warner channel. For other providers to carry the channel, they had to agree to put it on basic cable (guaranteeing a very high number of subscribers) and fork over a lot of money -- about $4 per month per subscriber. The subscribers did not pay for this directly, but they paid through higher rates. Some other providers balked at this, causing some Lakers fans to miss games early in the 2012-13 season.
Now Time Warner wants $5-$8 for the Dodgers' new channel. They are carrying all spring training games (starting 2/25), but so far not a single outside provider has agreed to carry the channel.
It is possible that the Dodgers will begin the season with zero providers carrying Sportsnet LA other than Time Warner, meaning that many people (including me) will miss the televised early-season games.
Time Warner has put out a propaganda website (essentially a petition): http://ineedmydodgers.com
However, I actually understand why the cable companies are balking. The Dodgers and Lakers alone will end up costing each subscriber over $100 per year, and that doesn't include other teams such as the Angels, Kings (hockey), and Clippers, all of whom have smaller (but probably soon-to-be-rising) deals. This is basically legal extortion, as the public gets mad at the cable companies for not carrying the games, rather than Time Warner.