Could MLB nationalize its media rights? Why some clubs are pushing to end local TV deals

Sixty years ago, baseball commissioner Ford Frick received a telegram from a Wisconsin congressman. Representative Henry Reuss was concerned that the Milwaukee Braves would 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, perhaps the Braves would stay.

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

Now, in 2024, that conversation has arrived. Commissioner Rob Manfred and some of the sport’s owners are talking more seriously about nationalizing baseball’s TV rights than ever before. Not because of the move, but because of cord-cutting, the failure of some traditional regional sports networks and the simultaneous battle for streaming supremacy by Netflix, Amazon and other streamers, which has plunged sports leagues and rights holders into chaotic reform.

Some baseball owners and executives, mostly in smaller markets, believe the best way to grow media revenues in the long term is to centralize dealmaking, and from there potentially regular-season broadcasts of all 30 teams to be sold as one streaming package. . Others in the game, especially those whose teams make the most money, are strongly opposed to giving up their power over their rights.

The obstacles to such change are enormous, but that it is even being considered is remarkable. The end of local media rights in baseball would be one of the most radical changes imaginable in the tumultuous world of sports television. Unsurprisingly, the possibility is also controversial.

“As the local media situation evolves, we will continue to evaluate the best model for our future,” Manfred said in a statement. The Athletics. “Our course of action will be determined by the clubs, who under our constitution are the ultimate decision-makers.”

While MLB has long arranged several 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 the majority of their regular season inventory, as well as the choice of television stations with which they collaborate within their home markets. (The central office already manages each team’s out-of-market rights, so fans in New York can sign up for MLB.tv and watch any game except the Mets or Yankees.)

Eliminating local rights could remove many of the blackout restrictions that frustrate fans. But not all clubs believe that Manfred’s office could make better use of the rights than they do individually.

The most divisive topic, however, is dollars. Regardless of how a commissioner uses the rights, the question would be: how is the revenue distributed, evenly or otherwise? The New York Yankees received an estimated $143 million in rights fees in 2022, far more than a team like the Colorado Rockies, which received $57 million that same year. according to Forbes. So ultimately it’s a revival of the classic baseball drama: big market versus small.

“Everything is on the table going forward because it’s so unknown,” Sam Kennedy, president of the great Boston Red Sox, said during spring training. “Look, there are always problems where teams from the large market have a different vision than the teams from the small market. Ultimately, it is the greater good of the industry that we must also focus on.”

A new era in sports broadcasting is just beginning, and changes are happening quickly. On Wednesday, Netflix and the NFL announced that the streamer would offer new Christmas Day games. Netflix pays about $75 million per game.

Elsewhere Wednesday, the other three major men’s sports leagues in the US, MLB, the NBA and the NHL, were in court arguing that one of their major broadcast partners, Diamond Sports Group, is fighting its way through bankruptcy and a driving dispute with a prominent cable company, Comcast. This month, a dozen MLB teams on Diamond’s Bally channels cannot be viewed by Comcast’s approximately 13.6 million television customers.

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

The prospect of a big payout from a streaming company is obviously attractive in baseball circles. Regional sports networks have traditionally allocated a lot of money to teams in advance. Streamers may behave differently and prefer a risk-reward model: the more people come to the content, the more money is paid. But in the long run, as streamers jockey for position, Manfred could be betting that Amazon and its ilk will pay more in aggregate than traditional RSNs do today for fragmented content.

So the crux of the discussion is really whether baseball could thrive as a “national” sport. Ironically, the national pastime is often seen as a local game.

“Like almost everything in American life, it’s all about money,” former baseball commissioner Fay Vincent said in a telephone interview. “The money has shifted so much locally. You know, trying to get yourself, if you live in New York, interested in a game where Seattle flies to San Diego or something, that just doesn’t work.

MLB just sold a package of Sunday morning games to Roku, which The Athletics It was reported on Thursday that it was $10 million per year. Previously, Peacock paid $30 million per season for the same package. Roku, unlike Peacock, does not require a paid subscription, but MLB’s lower fee was nonetheless discouraging to some officials.

“It just shows that there is no national package,” said one executive in the sport who was granted anonymity to speak candidly. “People only want to pay for the premium teams.”

One sport has long thrived on a 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 the sports then took place in different places than now. The once-a-week NFL schedule has always featured a much smaller number of games compared to baseball’s nighttime cadence.

“The local television contract in football simply never had much value in the early days because of the small supply,” says James Walker, professor emeritus of communications at Saint Xavier University in Chicago, who has written books on baseball’s broadcast history. “What that meant is that the (football) teams, when they set their television policy, were much closer together. 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 Major League Baseball.

Football’s move to nationalize the rights is an achievement often attributed to a titan among sports commissioners, Pete Rozelle, who took over in 1960. Walker said that a predecessor of Rozelle, Bert Bell, actually deserves attention for that purpose as well.

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

Manfred’s mission is probably simple: make as much money as possible with the utmost certainty, whether by diving headlong into the local media world or by outsourcing it, as has long been the norm. But any substantive change will require him to rally his 30 bosses, and a change in the rights structure could be a bridge too far.

“In baseball, it’s very difficult for a commissioner to make owners work for the collective good,” Walker said. “The idea that the Yankees at this stage would suddenly agree to pool their local rights, in some sort of shared configuration — it’s not impossible that that could happen.

“But it would actually mean figuring out a way for the Yankees to get fair compensation. And you would be going against the grain. If you go back to the radio era, you’re actually talking about 90 years of history.”

The existing contracts between teams and regional sports networks are a major problem. Some teams have deals with RSNs that extend into the 2030s. These deals often promised exclusivity to the RSN so that MLB couldn’t simply turn around and bundle the games with a simulcast as they saw fit.

So even if the teams agreed to nationalize the local rights tomorrow and transfer their current deals to the league office, the MLB would have to wait until some expire to use the rights in new ways — otherwise the MLB would have to negotiate a premature end. to those deals. For example, the Dodgers’ TV contract runs through 2038.

The league may also have to negotiate changes with the players’ union as revenue sharing between teams is collectively negotiated. This means that the next CBA negotiations, in 2026, could bring these issues to a head. The MLBPA declined comment.

Alternative theories exist about the direction baseball or any sport should go. Perhaps there are greater revenues to be had from developing packages grouped by market, rather than by sport: a New York bundle for different leagues, and so on.

With a three-quarters vote, owners can usually change the sport’s constitution. But less than 100 percent support for a rights shift could put MLB in dangerous territory. If an owner felt the league wrongly took something of value, lawsuits could fly.

In a nuanced distinction, MLB could launch some sort of smaller national streaming package, one with perhaps half the teams, without changing the actual rights system. Some teams today don’t have exclusive deals with RSNs, allowing them to immediately bundle the league. Manfred has expressed interest in doing this as early as 2025, but he doesn’t have enough teams he can bring together on this point for a viable product. However, that could change later this year if Diamond Sports Group fails to emerge from bankruptcy.

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

“Consumers should have the ability to access our product and games whenever they want, wherever they want, quickly,” said Kennedy. “We can’t make it difficult.”

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