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

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. Rep. Henry Reuss was worried the Milwaukee Braves would defect to Atlanta for the promise of a richer television contract, and proposed a fix: if all the Major League Baseball teams would share their television money, then the Braves might stay.

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

Now, in 2024, that conversation has arrived. Commissioner Rob Manfred and some of the sport’s owners are more seriously talking about nationalizing baseball’s TV rights than ever before. Not because of relocation, 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 reformation.

Some baseball owners and executives, mostly in smaller markets, believe the best way to grow media revenues over the long haul is to centralize the deal-making, and from there, to potentially sell all 30 teams’ regular-season broadcasts as one streaming package. Others in the game, particularly those whose teams make the most money, are vehemently opposed to surrendering their power over their rights.

The hurdles to such a change are massive, but that it is even being contemplated is remarkable. The end of local media rights in baseball would be one of the most radical alterations 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 us moving forward,” Manfred said in a statement to The Athletic. “Our course of action will be determined by the clubs, who are the ultimate decision makers under our constitution.”

While MLB has long arranged various national media deals — 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 always controlled most of their regular-season inventory, as well as the choice of television stations they partner with inside their home markets. (The central office already controls each team’s “out-of-market” rights, which is why fans in New York can sign up for and watch any game besides the Mets’ or Yankees’.)

Doing away with local rights could eliminate many of the blackout restrictions that frustrate fans. But not all clubs believe Manfred’s office could utilize the rights better than they do individually.

The most divisive matter, though, is the dollars. Regardless of how a commissioner deployed the rights, the question would be: How is the revenue distributed, by equal split or otherwise? The New York Yankees received an estimated $143 million as a rights fee in 2022, much greater than a team like the Colorado Rockies, which received $57 million that same year, according to Forbes. It is ultimately, then, a rekindling of baseball’s classic drama, big market vs. small.

“Everything is on the table for the future, because it’s so unknown,” Sam Kennedy, president of the big-market Boston Red Sox, said 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.”

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

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

The Diamond Sports Group bankruptcy has been an ongoing problem for MLB. (David Berding / Getty Images)

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

The prospect of a big payout from a streaming company is naturally alluring 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 that is paid. But in the long run, as the streamers jockey for position, Manfred could bet that Amazon and its ilk will pay more in aggregate than the traditional RSNs do today for fragmented content.

The heart of the discussion, then, is really whether baseball could thrive as a “national” sport. Ironically, the national pastime is often regarded as a local game.

“Like almost everything in American life, it’s all about money,” former baseball commissioner Fay Vincent said in a phone interview. “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.”

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

“It just goes to show, there’s no national package,” said an executive in the sport granted anonymity to speak candidly. “People want to pay only for the premium teams.”

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

But the sports were in different places then, as they are now. The once-a-week NFL schedule has always delivered a much smaller number of games compared to baseball’s nightly cadence.

“The local television contract in football simply never had that much value in the early days, because of the small inventory,” said James Walker, professor emeritus of communication at Saint Xavier University in Chicago, who has authored books about baseball’s broadcasting history. “What that meant is that the (football) teams, when they established their television policy, were much closer in parity. The notion of big-market team versus small-market team simply didn’t have the same meaning in the NFL, as it always did in Major League Baseball.”

Football’s move to nationalize rights is an achievement often credited to a titan among sports commissioners, Pete Rozelle, who took over in 1960. Walker said that a predecessor of Rozelle’s, Bert Bell, actually deserves attention to that end 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 likely simple: make the most money with the most certainty possible, be it by going into the local media business headlong or outsourcing it, as has long been the norm. But any substantive change is going to require him to corral his 30 bosses, and a rights-structure change might 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 stage, the Yankees would suddenly agree to pool their local rights, in some kind of shared configuration — it’s not impossible that that could happen.

“But it would basically mean you’d have to figure out a way that the Yankees receive what they consider to be their fair compensation. And you’d 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 predicament. Some teams have deals with RSNs that run into the 2030s. These deals have often promised exclusivity to the RSN, such that MLB couldn’t just turn around and bundle the games as it saw fit with a simulcast.

Hence, even if the teams agreed to nationalize local rights tomorrow, and assigned their current deals over to the league office, MLB would have to wait until some expire to use the rights in new ways — or it would have to otherwise negotiate an early end to those deals. The Dodgers’ TV contract, for example, goes through 2038.

The league also might have to negotiate changes with the players’ union, because revenue sharing between teams is collectively bargained. That means the next CBA negotiations, in 2026, could bring these issues to a head. The MLBPA declined comment.

Alternative theories exist as to the direction baseball or any sport should go. Perhaps greater revenue exists in developing packages grouped together by market, rather than by sport: a New York bundle across various leagues, and so forth.

A three-quarters vote typically allows the owners to modify the sport’s constitution. But support anywhere short of 100 percent for a shift in the rights setup could leave MLB in perilous territory. If any owner felt the league was improperly assuming 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 its actual rights system. Some teams today are not in exclusive deals with RSNs, freeing them up for the league to roll up into a bundle immediately. Manfred has expressed interest in doing this as soon as 2025, but he doesn’t have enough teams he could pool 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 if the idea of moving away from local rights would have been unthinkable just a few years ago, Kennedy said, “The world is changing fast.”

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

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