As the Major League Baseball season has commenced with significant storylines and thrilling finishes, there is attention focused off the field with the future of media rights surrounding live game broadcasts. ESPN and MLB recently exercised a mutual opt-out of its rights contract for which the league was reportedly receiving an average of $550 million per annum. With the impending expiration of the other national rights deals after the 2028 season, MLB Commissioner Robert D. Manfred Jr. is exploring a new strategy through which the league would acquire linear and digital rights for all 30 teams to be available concurrent with the national renewals.
David Samson, host of the Nothing Personal podcast licensed by Meadowlark Media and former president of the Miami Marlins, discussed recent developments surrounding this situation on the Monday edition of his show. Pointing out that Manfred has been on a media tour of late, he expressed that there is an active negotiation taking place with the Major League Baseball Players Association (MLBPA) without beginning to bargain ahead of an “almost assured” work stoppage after next season. Within a story published by The New York Times about the future of baseball, Manfred spoke about television deals and extolled league production and distribution of San Diego Padres games
“He needed to make sure that we all knew that they took over the broadcasts for San Diego and that they sold tens of thousands of direct-to-consumer in-market packages,” Samson said of Manfred. “I’d be scared of how I talked about that.”
The Padres were the first time for which MLB Media handled regional broadcasts amid the Ch. 11 bankruptcy of then-Diamond Sports Group. The regional sports network company has since re-emerged as Main Street Sports Group upon entering into a restructuring support agreement that diminished its pre-petition debt. With Manfred divulging that “tens of thousands” of people were viewing the games through the in-market packages, Samson surmised that it would cost $150 for the season and accrued 30,000 subscribers.
“The total amount of money there is $4.5 million,” Samson said. “You understand why there’s a problem with the math? You understand the issue of why all of these teams telling you that, ‘Our solution of going over-the-air, our solution of starting our app and selling direct-to-consumer,’ that all sounds good for P.R., but when it comes to money, it’s a problem. Our local rights deals used to be $80 million a year, absolutely like clockwork.”
Twenty-six of the 30 MLB teams currently have direct-to-consumer streaming functionalities in their local markets, facilitating the elimination of blackouts for fans in the regions. While the league could continue offering games on linear television through over-the-air channels in future years, Samson does not believe there is money there. Reflecting on Manfred’s comments, he wishes that the commissioner would have made people dream that it was hundreds of thousands of people subscribing rather than just those in the San Diego marketplace.
“When you say that tens of thousands of direct-to-consumer in-market packages are being sold and you’re trying to say, ‘Look how many people want to pay to watch baseball,’ and then you do the math, oy,” Samson said. “Not good.”
Samson mentioned how he had previously discussed a solution surrounding charging by the game utilizing a dynamic pricing scale similar to tickets. Estimating that consumers could be paying $1,620 a year to view games at an average of $10 per contest, a number he admits is above market pricing at the moment, the returns for 30,000 people would fall short of $50 million. Although Samson knows that the league will publicly say it is working for a union, he knows that the reason why some teams cannot operate at the top of the free-agent market is because of the economics. This can subsequently create disparities in player signings and risk potential correlation to diminished on-field performance.
“Think about why TV revenue has to be pooled and it has to be national because there is no way for an overwhelming majority of teams to even come close to what they were getting from a cable, having an RSN on cable, where cable subs were paying and supplementing the income for those who wanted to watch the sport,” Samson said. “The numbers don’t add up.”
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