Can MLB nationalize its media rights? Why are some clubs pushing to end local TV deals? – Sports News (Trending Perfect)


Sixty years ago, Baseball Commissioner Ford Frick received a telegram from a congressman from Wisconsin. Rep. Henry Royce was concerned that the Milwaukee Braves might defect to Atlanta over the promise of a richer television contract, and proposed a solution: if all Major League Baseball teams shared their television money, the Braves might stay.

According to the Associated Press, Frick responded in the summer of 1964, saying, “…the plan to pool all television receipts would not be feasible or acceptable at this time,” but would be “worth considering in the future.”

And now, in 2024, that conversation has arrived. Commissioner Rob Manfred and some sports owners are talking more seriously than ever about nationalizing baseball's television rights. Not because of the transition, but because of communications blackouts, the failure of some traditional regional sports networks, and the simultaneous battle for streaming supremacy by Netflix, Amazon and other streamers that has left sports leagues and rights holders with a messy reform process.

Some baseball owners and executives, mostly in small markets, believe the best way to increase media revenues over the long term is to centralize the deal-making process and, from there, potentially sell regular-season broadcasts to all 30 teams as a single broadcast package. . Others in the game, especially those whose teams make the most money, are vehemently opposed to giving up their power over their rights.

The obstacles to achieving such change are enormous, but just thinking about it is remarkable. The end of local baseball media rights would be one of the most radical changes imaginable in the turbulent world of sports television. Unsurprisingly, this possibility is also controversial.

“As the local media situation evolves, we will continue to evaluate the best model moving forward,” Manfred said in a statement. The athlete. He added: “Our course of action will be determined by the clubs, which are the final decision makers under our constitution.”

While MLB has long arranged numerous national media deals—including for the postseason, with networks like FOX and TBS, and for Sunday night games during the regular season, with ESPN—individual teams have always controlled most of their regular-season inventory, They also choose which TV stations they partner with within their local markets. (The central office already controls each team's “out-of-market” rights, which is why fans in New York can subscribe to and watch any game besides the Mets or Yankees.)

Getting rid of local rights could remove many of the blackout restrictions that frustrate fans. But not all clubs believe that Manfred's office can use the rights better than they do individually.

But the most controversial issue is the dollar. Regardless of how the commissioner distributes rights, the question is: How are revenues distributed, whether by equal division or otherwise? The New York Yankees received an estimated $143 million in rights fees in 2022, a much larger amount than a team like the Colorado Rockies, who received $57 million in the same year. According to Forbes. It's ultimately a revival of the classic baseball drama, big market versus small market.

“Everything is on the table for the future, because it's absolutely unknown,” Boston Red Sox big league president Sam Kennedy said during spring training. “Look, there are always issues that arise where large market teams have a different perspective than small market teams. Ultimately, the greater good of the industry is what we should be focusing on as well.

A new era has just begun in sports broadcasting, and changes are happening fast. On Wednesday, Netflix and the NFL announced that the streaming device will newly carry Christmas Day games. Netflix is ​​paying approximately $75 million per game.

Elsewhere on Wednesday, the other three major US men's sports leagues, MLB, NBA and NHL, were in court arguing that one of their most important broadcast partners, Diamond Sports Group, was stumbling its way through a bankruptcy and carriage dispute with the prominent cable company. , Comcast. This month, dozens of MLB teams broadcast on Diamond's Bally's branded channels cannot be watched by Comcast's roughly 13.6 million TV customers.

The bankruptcy of Diamond Sports Group has been an ongoing problem for MLB. (David Berding/Getty Images)

Then FOX and Warner Bros. announced it. Discovery and Hulu on Thursday announced the name of the upcoming sports package: “venu.”

The prospect of significant compensation from a broadcast company is naturally enticing in baseball circles. Regional sports networks have traditionally set aside a lot of money for teams up front. Streamers may behave differently, preferring a risk-reward model – the more people stream the content, the more money is paid. But in the long run, as streamers jostle for position, Manfred can bet that Amazon and its ilk will pay more in aggregate than traditional RSNs pay today for fragmented content.

The crux of the discussion, then, is whether baseball can flourish as a “national” sport. Ironically, the national pastime is often considered a local game.

“Like almost everything in American life, it's all about the money,” Faye Vincent, the former baseball commissioner, said in a phone interview. “The money is very much local. You know, trying to get yourself, if you live in New York, interested in a game where Seattle travels to San Diego or something like that — it doesn't work.”

MLB just sold a bundle of Sunday morning games to Roku, which The athlete It was reported Thursday for $10 million annually. Previously, Peacock had paid $30 million per season for the same package. Roku, unlike Peacock, does not require a paid subscription, but MLB's reduced fees have nonetheless been frustrating to some officials.

“It just goes to show, there is no national package,” said a sports executive who declined to be identified to speak candidly. “People only want to pay for premium teams.”

One sport has long thrived on the national rights model: the National Football League. At the time Frick made his comments in 1964, the NFL was already negotiating deals as a single entity.

But sports were in different places then, as they are now. The once-a-week NFL schedule always offers far fewer games than the nightly rhythm of baseball.

“The local football TV contract simply didn't have that much value in the early days, because of the lack of inventory,” said James Walker, professor emeritus of communications at St. Xavier University in Chicago, who has written books on the history of baseball radio broadcasts. “What that means is that (football) teams, when they established their television policy, were much closer to parity. The idea of ​​a big-market team versus a small-market team simply didn't have the same meaning in the NFL, as it always has in the NFL.” Major League Baseball.

Football's move toward nationalizing rights is an accomplishment often attributed to a giant among sports commissioners, Pete Rozelle, who took office in 1960. Walker said that Bert Bell, Rozelle's predecessor, actually deserves attention on that end as well.

Whether Manfred wants to be remembered as baseball's Roselle, or the Bell, is one of the more interesting questions as Manfred marches toward his planned retirement in 2029.

Manfred's mission will likely be simple: make as much money as possible with as much certainty as possible, whether that's by getting into local media or outsourcing, as has long been the norm. But any substantive change would require him to rally his 30 bosses, and changing the rights structure may be a bridge too far.

“In baseball, it's very difficult for a commissioner to get owners to work for the greater good,” Walker said. “The idea that the Yankees would suddenly agree at this point to pool their home rights, in some sort of corporate configuration — it's not impossible for that to happen.

“But it basically means you have to figure out a way for the Yankees to get what they consider to be their fair compensation. And you're going to go against the grain. If you go back to the radio era, you're really talking about 90 years of history.”

Current contracts between teams and regional sports networks pose a major quandary. Some teams have deals with RSNs that last into the 2030s. These deals often promised exclusivity for the RSN, so that MLB could not turn around and bundle games as it saw fit with simulcasts.

Hence, even if teams agreed to nationalize home rights tomorrow, assigning their existing deals to the league office, MLB would have to wait until some rights expire to use the rights in new ways — or would have to negotiate an early end. For those deals. For example, the Dodgers' television contract runs through 2038.

The league may also have to negotiate changes with the players union, because revenue sharing between teams is negotiated collectively. This means that the next Association Agreement negotiations, in 2026, could bring these issues to the fore. The MLBPA declined to comment.

There are alternative theories regarding the direction baseball or any sport should take. Perhaps there is more revenue in developing packages grouped by market, rather than by sport: the New York package across different leagues, etc.

A three-quarters vote typically allows the owners to amend the sport's constitution. But less than 100 percent support for a shift in rights setup could leave MLB in risky territory. If any owner feels the league is improperly assuming something of value, lawsuits could be filed.

In a subtle distinction: MLB could launch some sort of smaller, national broadcast package, one that might include half the teams, without changing its actual rights system. Some teams today are not in exclusive deals with RSNs, which frees them up for the league to join the package immediately. Manfred has expressed interest in doing so by 2025, but doesn't have enough teams he can put together. at this point For a viable product. However, that could change later this year, if Diamond Sports Group fails to emerge from bankruptcy.

When asked in February whether the idea of ​​moving away from domestic rights would have been unthinkable just a few years ago, Kennedy said: “The world is changing rapidly.”

“Consumers need the ability to access our products and games when they want, where they want, fast,” Kennedy said. “We can't make it difficult.”

(Top photo of Manfred: Mike Carlson/MLB Images via Getty Images)



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