MLB Considers Nationalizing TV Rights Amid Changing Media Landscape

The Evolution of Baseball's TV Rights: A Battle of Tradition and Modernity

by Faruk Imamovic
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MLB Considers Nationalizing TV Rights Amid Changing Media Landscape
© Getty Images/Harry How

Sixty years ago, Major League Baseball (MLB) faced a pivotal moment when baseball commissioner Ford Frick received a telegram from Wisconsin congressman Henry Reuss. Reuss expressed concern that the Milwaukee Braves might relocate to Atlanta due to the lure of a more lucrative television contract. He proposed a radical idea: if all MLB teams shared their television revenue, the Braves might be persuaded to stay.

In the summer of 1964, Frick replied that while pooling all television receipts was not feasible or acceptable at the time, it was an idea "worthy of future consideration." Fast forward to 2024, and the conversation has reached a critical juncture. Commissioner Rob Manfred, alongside some MLB owners, is seriously contemplating the nationalization of baseball’s TV rights. This shift is driven not by fears of relocation but by the challenges posed by cord-cutting, the collapse of traditional regional sports networks (RSNs), and the intense battle for streaming dominance involving giants like Netflix and Amazon.

A New Era of Broadcasting

In this rapidly changing landscape, some MLB owners and executives, particularly from smaller markets, argue that centralizing media deals could be the key to growing revenue. They envision a future where all 30 teams’ regular-season broadcasts are sold as a single streaming package. However, this idea faces staunch opposition from owners of the most profitable teams, who are reluctant to relinquish control over their lucrative local TV rights.

The prospect of ending local media rights in baseball is monumental. It represents one of the most significant potential shifts in the volatile world of sports broadcasting. Unsurprisingly, the concept is highly contentious.

“As the local media situation evolves, we will continue to evaluate the best model for us moving forward,” Manfred stated to The Athletic. “Our course of action will be determined by the clubs, who are the ultimate decision makers under our constitution.”

Historically, MLB has secured various national media deals, including for the postseason with networks like FOX and TBS, and for Sunday night games with ESPN. However, individual teams have always retained control over most of their regular-season broadcasts and their choice of television partners within their local markets. This autonomy has allowed teams to negotiate deals that best suit their interests and fan bases.

MLB Commissioner Rob Manfred
MLB Commissioner Rob Manfred© Getty Images/Harry How
 

The Financial Divide

One of the most significant issues in this debate is the distribution of revenue. How would the proceeds from a centralized deal be divided? The disparity in local TV revenue is stark. For instance, the New York Yankees received an estimated $143 million in rights fees in 2022, while the Colorado Rockies received only $57 million. This difference highlights the classic big market versus small market struggle within MLB.

“Everything is on the table for the future, because it’s so unknown,” said Sam Kennedy, president of the Boston Red Sox, during spring training. “Look, there’s always issues that come up where large-market teams have a different view than the small-market teams. In the end, the greater good of the industry is what we have to also focus on.”

The evolving dynamics of sports broadcasting were further underscored recently when Netflix announced it would carry NFL Christmas Day games, paying around $75 million per game. Meanwhile, MLB, NBA, and NHL were embroiled in court battles over broadcasting rights with Diamond Sports Group, which is navigating bankruptcy and a dispute with Comcast.

Challenges and Considerations

Despite the allure of potential large payouts from streaming companies, the shift to a centralized model is fraught with challenges. Existing contracts between teams and RSNs, some extending into the 2030s, complicate the picture. MLB would need to wait for these deals to expire or negotiate their early termination to implement a new system. For example, the Dodgers’ TV contract runs through 2038, posing a significant obstacle.

Additionally, any changes to revenue sharing must be collectively bargained with the players’ union, meaning the upcoming collective bargaining agreement negotiations in 2026 could bring these issues to a head. The MLB Players Association (MLBPA) has declined to comment on these potential changes.

Alternative revenue strategies have been proposed, such as developing market-specific packages that combine different sports rather than focusing solely on baseball. However, achieving the necessary support for such a shift is daunting. A three-quarters vote from team owners is required to modify MLB’s constitution, and any dissent could lead to legal challenges.

The Path Forward

In the short term, MLB might explore launching a smaller national streaming package without overhauling the entire rights system. Some teams are not bound by exclusive deals with RSNs, allowing for immediate inclusion in such a package. Manfred has shown interest in this approach, aiming for implementation as soon as 2025. The outcome of Diamond Sports Group’s bankruptcy could further influence these plans.

The heart of the discussion remains whether baseball can thrive as a national sport. Historically considered the national pastime, baseball is deeply rooted in local fandom. This local nature has always been a significant aspect of its appeal, making the shift to a national model both a bold and risky move.

Former baseball commissioner Fay Vincent encapsulated the essence of the debate: “Like almost everything in American life, it’s all about money. The money is so enormously tilted locally. You know, trying to get yourself, if you’re living in New York, interested in a game where Seattle is flying to San Diego or something — it just doesn’t work.”

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