Major League Baseball (MLB) is preparing to create new national packages that are intended for streaming distribution, according to a report published on Thursday.
The report, from the New York Times’ sports vertical The Athletic, says the MLB intends to announce its new packages in 2028, which coincides with the expiration of its current TV rights contracts with the Walt Disney Company’s ESPN, Fox Sports and Warner Bros Discovery’s (WBD) TNT Sports. Most of its local telecast agreements with Diamond Sports Group, a joint venture operated by Sinclair and Allen Media Group, are set to wind down that year, too.
The expiration of those deals will allow MLB to create packages of games that are intended for national broadcasters — and, specifically, for their streaming services. Some baseball games have been offered on a limited basis through streaming products like Apple TV Plus, The Roku Channel and Comcast’s Peacock over the years, and MLB Commissioner Rob Manfred would like to see that accelerate.
“I’d like to have all the rights available,” Manfred told The Athletic. “I’d like to talk to the people who are buyers. I’d like to cut them up into packages and sell them, as many of them as possible, nationally, and then have a plan to deal with what’s left over.”
That will require a fundamental shift from how rights are currently distributed among broadcasters. While the MLB sells a limited number of games to national broadcasters, individual clubs currently have the right to forge local telecast agreements on their own. The channels operated by Diamond Sports long benefitted from this arrangement, dating back to their ownership by Fox; other broadcasters, including Comcast’s NBC Sports and Charter’s Spectrum Sports have also enjoyed this arrangement for their own regional sports channels.
After Diamond Sports filed for bankruptcy protection last year, some teams forged their own local TV agreements with over-the-air broadcasters and launched streaming services to continue reaching in-market fans. MLB took over some local TV rights, too, and offered games through their website and streaming apps on a limited basis.
To effectuate a more-robust national package where MLB has the rights to all local and national TV deals, the teams would need to agree to transfer that control to the organization — something that could be a complicated endeavor. Both sides would need to agree on the number of games offered to different broadcasters, how much revenue will be shared between the clubs and the organization, and other matters.
It could also influence a forthcoming conversation between MLB and The Players Association, the union that represents MLB players. The league’s current collective bargaining agreement with the union expires in two years, and if MLB is aggressive in clinching the right to sell local and national TV deals, “If the model changes, we will be involved in negotiating how those changes might affect the system and will ensure that the interests and priorities of the players are protected,” a union official said.
Still, MLB officials are bullish in their need to shake up the TV rights landscape. Financial analysts seem to be on their side: A research note from Morningstar affirmed the ongoing effects of cord-cutting — TV fans moving away from cable and satellite in favor of cheaper streaming options — has chipped away at the revenue earned from distribution fees, which some clubs count on.
“The business side of our industry continues to be challenging, specifically the decline of our largest revenue stream, the traditional linear cable and satellite bundles,” the Morningstar note said.
Shifting more games to streaming platforms could help MLB and the teams course correct on the financial side, if done correctly. It could also alienate baseball fans who feel they have to pay for multiple streaming services simply to stay on top of all games from a particular team.
