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 feared that the Milwaukee Braves would defect to Atlanta for the promise of a richer television contract and proposed a solution: If all Major League Baseball teams shared their television money, then the Braves could stay.

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

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

Some baseball owners and executives, primarily in smaller markets, believe the best way to increase media revenues over the long term is to centralize trading and, from there, potentially sell season broadcasts regular coverage of all 30 teams in one streaming package. . Others in the game, particularly those whose teams make the most money, are vehemently opposed to giving up their power over their rights.

The obstacles to such change are enormous, but the fact that it is even being considered is remarkable. The end of local media rights to baseball would constitute one of the most radical changes imaginable in the tumultuous 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 to Athleticism. “Our plan of action will be determined by the clubs, who are the ultimate decision-makers under our constitution.”

While MLB has long had various deals with national media outlets – including for the postseason, with networks such as FOX and TBS, and for Sunday night games during the regular season, with ESPN – individual teams have still controlled most of their regular season inventory, as well as the choice of television stations they partner with in their home markets. (The central office already controls each team’s “off-market” rights, which is why New York fans can sign up for and watch any game other than the Mets or Yankees.)

Removing local rights could eliminate many of the blackout restrictions that frustrate fans. But not all clubs think Manfred’s office could make better use of those rights than they do individually.

But what divides the most are dollars. Regardless of how the commissioner distributes the entitlements, the question would be: how is the revenue distributed, equally or otherwise? The New York Yankees received approximately $143 million in tariffs in 2022, far more than a team like the Colorado Rockies, who received $57 million in the same year, according to Forbes. So it’s ultimately a resurgence of baseball’s classic drama of big market versus small.

“Everything is on the table going forward, because it’s so unknown,” Boston Red Sox president Sam Kennedy said during spring training. “Look, there are always issues that arise when large market teams have a different point of view than small market teams. Ultimately, it is the common 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 once again broadcast Christmas Day games. Netflix pays around $75 million per game.

Elsewhere on Wednesday, the three other major U.S. men’s sports leagues, MLB, NBA and NHL, were in court, arguing that one of their most prominent broadcast partners, Diamond Sports Group, was cheating path through bankruptcy and a carriage dispute with a major cable company, Comcast. This month, a dozen MLB teams broadcast on Diamond’s Bally-branded channels cannot be seen by Comcast’s roughly 13.6 million TV customers.

Diamond Sports Group’s bankruptcy is an ongoing problem for MLB. (David Berding/Getty Images)

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

The prospect of a big payout from a streaming company is understandably enticing in baseball circles. Regional sports networks have traditionally committed a lot of money to teams upfront. Streamers might act differently, preferring a risk-reward model: the more people who flock to the content, the more money is paid. But in the long term, as streamers fight for position, Manfred could bet that Amazon and its ilk will overall pay more than traditional RSNs do today for fragmented content.

The crux of the discussion, then, is 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 is hugely tilted at the local level. You know, trying to get interested, if you live in New York, in a game where Seattle is flying to San Diego or something – it just doesn’t work.

MLB just sold a Sunday morning game package to Roku, which Athleticism reported Thursday was $10 million a year. Previously, Peacock paid $30 million per season for the same package. Roku, unlike Peacock, does not require a paid subscription, but MLB’s discounted fees have nevertheless discouraged some officials.

“It shows there is no national package,” said a sports executive who requested anonymity to speak candidly. “People only want to pay for premium teams.”

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

But sports didn’t exist back then like they do today. The NFL’s weekly schedule has historically delivered a much smaller number of games than baseball’s nightly cadence.

“The local TV deal in football just never had that much value in the beginning, because of the small inventory,” said James Walker, professor emeritus of communications at Saint Xavier University in Chicago, author of books on the history of baseball broadcasting. “This meant that (football) teams, when they established their television policy, were much closer in terms of parity. The notion of big market team versus small market team just didn’t mean the same thing in the NFL as it always has in Major League Baseball.

Football’s decision to nationalize rights is an achievement often attributed to a titan among athletic commissioners, Pete Rozelle, who took office in 1960. Walker said a predecessor to Rozelle, Bert Bell, also deserves credit for we are interested in it for this purpose.

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

Manfred’s mission is probably simple: make the most money with the most certainty, whether by diving headlong into the local media business or outsourcing it, as has long been the norm . But any substantial change will require him to round up 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 get owners to work for the collective good,” Walker said. “The idea that at this point the Yankees would suddenly agree to pool their local rights, in some sort of shared configuration, it’s not impossible that that could happen.

“But that would essentially mean finding a way for the Yankees to receive what they consider to be their fair compensation. And you would be going against the grain. If you go back to the radio era, you’re really talking about 90 years of history.

Existing contracts between teams and regional sports networks are a huge problem. Some teams have deals with RSNs that run into the 2030s. These deals often promised exclusivity to the RSN, so MLB couldn’t just turn around and bundle games as it saw fit with a broadcast simultaneous.

Therefore, even if teams agreed to nationalize local rights tomorrow and turned their current deals over to the league office, MLB would have to wait for some to expire to use the rights in new ways — or it would otherwise have to negotiate an early end. to these offers. The Dodgers’ TV contract, for example, 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 to comment.

Alternative theories exist as to the direction baseball or any other sport should take. Perhaps there is greater revenue by developing packages grouped by market rather than by sport: a New York package covering different leagues, etc.

A three-quarters vote generally allows owners to change the sport’s constitution. But less than 100% support for a change in the rights setup could leave MLB in perilous territory. If an owner felt the league was improperly assuming something of value, lawsuits could be filed.

A nuanced distinction: MLB could launch some sort of smaller national streaming program, with perhaps half the teams, without changing its current rights system. Today, some teams do not have exclusive deals with RSNs, allowing the league to immediately bundle them into a package. Manfred has expressed interest in this as early as 2025, but he doesn’t have enough teams to bring together. at this point for a viable product. That could change later this year, however, 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 replied, “The world is changing rapidly.”

“Consumers need to have the ability to quickly access our products, our games, when they want, where they want,” Kennedy said. “We can’t make things difficult.”

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