Forget pitch clocks and defensive positioning — the biggest story in baseball right now is the collapse of the regional sports network and what it means for the future of how fans watch games. Change is coming that could affect broadcasts, blackouts and, ultimately, the economic landscape of the sport.
Shortly after the World Series ended in November, Major League Baseball hosted its quarterly owners meetings at the commissioner’s office in New York. At their conclusion, commissioner Rob Manfred told media members that there had been a long report made to owners about the future of RSNs. He referenced the need to serve both cable subscribers and cord-cutters, praised the league’s new partnerships with streaming services such as Apple and Peacock and predicted “a loosening of that exclusivity” that has long been inherent in lucrative RSN deals.
It was perhaps the least bombastic way he could’ve announced that there might be an impending solution to one of baseball fans’ biggest frustrations.
MLB all but invented streaming. . But from the outset, blackouts were seen as a structural inevitability. In short, RSNs give teams so much money because they receive the exclusive right to broadcast games in a certain area. Making games available to local fans online would infringe on what the RSNs pay for, so while MLB.tv made streaming games technically possible, the existing economic structures required the service to black out games in local markets, essentially excluding what is literally the target audience. (Additionally, certain pockets of the country are subject to onerous overlapping blackouts, sometimes without the option of watching those games on TV.)
In the two decades since the dawn of MLB.tv, people’s expectations about their ability to watch whatever they want, wherever they want, without the restrictions or rigmarole of traditional television, have exploded. With content consumption increasingly à la carte, blackouts have become a serious barrier in growing the game and .
Yet as local television deals grew to constitute an ever larger percentage of teams’ revenue — — the RSN-enabled blackouts seemed intractable. Even as cord-cutting became an increasingly looming threat to the cable bubble, .
In December, at baseball’s annual winter meetings, Manfred doubled down on his allusion to some forthcoming solution to the exclusivity issue. In January, the league announced it had hired an RSN veteran for the newly created role of executive vice president of local media, responsible for “overseeing MLB’s management and distribution of local media rights.”
Less than a month later, Diamond Sports Group — which viewers know as Bally Sports and which airs games for 14 MLB teams — . The company is facing financial difficulties because of both the exodus of cord-cutters and the sheer amount of debt taken on by Sinclair — of which DSG is essentially a subsidiary — when it purchased the bundle of RSNs in 2019.
At that time, MLB bid for the rights that ultimately went to Sinclair/DSG for what the league somewhat presciently deemed too steep a price, and it has been monitoring the situation ever since. It’s not lost on the league that bankruptcy for DSG, while introducing an uncomfortable level of uncertainty in the near term, could allow MLB to begin to remake its broadcast options to fit a more modern market.
Indeed, Manfred said as much at news conferences to kick off spring training in both Arizona and Florida.
“I think our aggressiveness with respect to stepping in in the event that Ballys can’t broadcast was driven in part by the fact that we saw it as an opportunity to fix this blackout problem,” he said two weeks ago in Florida.
(He also said, “I don’t relish any of this,” which seems, quite frankly, to be a bit too much protest — so much, in fact, that some might view it as evidence to the contrary.)
In the event that DSG declares bankruptcy and loses the ability and rights to broadcast games — that elides the complications of bankruptcy court and the possibility that not all teams and RSNs have the same fallout — Manfred says MLB is prepared to produce and broadcast local games.
“We know that we can put those games up in conjunction with MLB.tv digitally, and we are in the process of trying to work out arrangements that will put us in a position to make those games available within the cable bundle as well,” he said.
What he’s talking about is making the games of teams DSG lost available both on traditional TV and via streaming, which would seem to constitute a solution to the blackout problem, at least for impacted markets. It’s also possible that MLB takes this as an opportunity to renegotiate the exclusivity terms with DSG that have proven so restrictive, though that would impact only the 14 teams broadcast on Bally.
“I hope we get to the point where, on the digital side, when you go to MLB.tv, you can buy whatever the heck you want,” Manfred said. “You can buy the out-of-market package. You can buy local games, you can buy two sets of local games, whatever you want. I mean, that is, to me, the definition of what is going to be a valuable digital offering going forward.”
In other words, the a la carte streaming options that consumers have become accustomed to.
“There’s a lot of work that will need to be done on this project,” Manfred said. “But I think as you move more national, by definition, you’re gonna have more central revenue.”
And now we’ve reached some of the more far-ranging implications of the cable bubble bursting. Currently, as established, local broadcasts constitute a significant portion of each team’s revenue. That’s true across the board, but the actual dollar amounts vary widely; .
But as Manfred said, if the local TV product were centralized in production and distribution, presumably that revenue would come through the league office and could be distributed more equitably.
Or, as the commissioner put it: “A more national product produces more centrally shared revenue, which reduces revenue disparity, which, in turn, we hope, would reduce payroll disparities.”
Making a logical leap to a more level payroll playing field is a nifty bit of a preemptive justification so long as the correlation between revenue and payroll (or lack thereof) remains ultimately up to individual owners. (Just ask Padres owner Peter Seidler, whose local TV revenue ranks 22nd out of 29 teams accounted for by FanGraphs, below that of the Rays, A’s and Orioles.)
Still, a sport with entirely centralized TV revenue probably does look pretty different. For one thing, the distribution of that revenue would need to be collectively bargained with the MLB Players Association.
“They have the ability to address the RSNs and have told us that they have a plan in place,” MLBPA executive director Tony Clark said recently at a meeting with media members. “What we don’t know is anything beyond that and how it’s going to affect the system. That will require a conversation.”
Like Manfred, Clark expressed confidence that, while the potentially protracted and painful dissolution of the RSN model might cost teams in the immediate, “over the long term, growth will still happen.”
More accurately, growth will happen if MLB can navigate its way from an already outdated model into something more nimble and accessible. Right now, the league is publicly professing confidence without much in the way of specifics, which makes it difficult to judge.
Eventually, though, the results will be legacy-defining.