MLB sets up local media group, could broadcast 17 teams

[nattysez]

I know we have a few threads about this issue already, so feel free to consolidate this if we don't want another one. I thought this was worth its own thread since this looks like it's really happening now.

It seems like just the paperwork required for MLB to entirely take over the local broadcasts would take months to iron out, but maybe it's simpler than I think. And I guess spring training coverage will be handled by the entities going bankrupt for now?

"These new hires are an important step in our preparation to address the changing landscape of MLB game distribution in light of the increasing challenges and pressure facing regional sports networks," MLB chief revenue officer Noah Garden said in a statement.

Diamond Sports Group, the subsidiary of Sinclair Broadcast Group that operates networks under the name Bally Sports, has the rights to 14 major league teams and skipped about $140 million in interest payments due Feb. 15. Diamond said as of Sept. 30 it had debt of $8.674 billion. The company has nearly $1 billion in rights payments, mostly to baseball teams, due in the first quarter this year, and a bankruptcy filing is possible.

Diamond owns rights to the broadcasts for the Arizona Diamondbacks, Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays and Texas Rangers.

Warner Bros. Discovery's AT&T SportsNet networks told the Colorado Rockies, Houston Astros and Pittsburgh Pirates last week that the companies do not have the money to make scheduled rights fee payments. The networks told the teams they have until March 31 to reclaim their broadcast rights and if there are not deals, the networks would file for Chapter 7 bankruptcy.

https://www.espn.com/mlb/story/_/id/35760866/mlb-sets-local-media-group-broadcast-17-teams

 

[Mahkis Smaht]

When you consider how far ahead of the curve MLB was with its "advanced media" development which became Bamtech and I guess sold off to Disney, this is probably going to be better for consumer access to games than the predecessor. I assume what we all want is to be able to watch the games a la carte or at a volume discount for a price we'd be willing to pay. Of all the leagues it looks to me like MLB has the most sophisticated understanding of contemporary media, so they'll probably be first to deliver this.

 

[Manramsclan]

If we are able to watch the San Diego Padres in market here in San Diego through MLB.TV that would be ideal. I pay $150 for all the Sox games plus every other team except the Padres (my wife is a life long HUGE fan) and we would drop cable in a heartbeat.

I'm thinking, however, that they know that and are buddy buddy with those large corporations and that will not happen.
They do have a unique ability with Bamtech etc. to maximize revenue streams coming directly into the league coffers (and I guess then the teams?), but it will be very interesting to see if they want that control, or if it is better for them for the rights to be up to bid for several different networks.

What will also be interesting is to see how these 17 teams end up what the difference is from the other 13 in terms of revenue. I absolutely have no idea if it would be more or less, and it will be fascinating to see how this ends up working.

 

[Mahkis Smaht]

I'm thinking in an ideal world you could buy a digital ticket or a digital season ticket the same as if you were going to buy cheap seats in a stadium with an Aleph-Nought sized upper deck. Maybe they could run day-of specials where there are low-interest matchups for like, $0.50 a game or free or whatever.

 

[dirtynine]

Probably unrealistic, but I’d love to buy like a 30 or 45-game pack and use it up, a la carte, during the season, on any MLB game. Mostly Sox, but that’s my level of engagement and it would let me flip around the league a bit too without paying for the whole package.

 

[Ale Xander]

Probably unrealistic, but I’d love to buy like a 30 or 45-game pack and use it up, a la carte, during the season, on any MLB game. Mostly Sox, but that’s my level of engagement and it would let me flip around the league a bit too without paying for the whole package.

Great idea. I'd buy 120 games, with about 90 Sox games if it made sense if there are zero blackouts. But I'd have to be able to view them everywhere, and surely at the very least the continental 48.

 

[savage362]

I'm thinking in an ideal world you could buy a digital ticket or a digital season ticket the same as if you were going to buy cheap seats in a stadium with an Aleph-Nought sized upper deck. Maybe they could run day-of specials where there are low-interest matchups for like, $0.50 a game or free or whatever.

Probably unrealistic, but I’d love to buy like a 30 or 45-game pack and use it up, a la carte, during the season, on any MLB game. Mostly Sox, but that’s my level of engagement and it would let me flip around the league a bit too without paying for the whole package.

Great idea. I'd buy 120 games, with about 90 Sox games if it made sense if there are zero blackouts. But I'd have to be able to view them everywhere, and surely at the very least the continental 48.

I'd be curious how a tiered subscription model would be received by the MLB fan base. I'd probably pay above the current MLB.TV cost if it meant I could actually stream in-market games legally. I don't watch enough out of market games regularly anymore to justify the cost of the product as it's currently offered, but I'd be a customer again with the options below.

Tier 1: "All Access"
You can watch all 2,430 regular season games with no restrictions. Basically the equivalent of MLB.TV now without the blackouts. All games are available to re-watch until the start of the following season. Post-season games included for no additional cost.

Tier 2: "Single Team Season Ticket"
You can watch all games for the team you purchase a "season ticket" for. They could also offer sub-tiers that align with the in-person season ticket packages that are already offered for each team (half season, weekday games, weekend games, etc.) You retain access to re-watch the purchased games until the start of the following season. Post-season games included for no additional cost.

Tier 3: "à La Carte"
Pre-purchase a select number of games per season (10, 20, 40, etc). You choose the games as the season progresses. All games are available to re-watch until the start of the following season. Post-season game can be added an an addon for a discounted price.

Tier 4: "Single Game"
You can only watch the one game you purchase. All games you purchase can be re-watched until the start of the following season.

"Post-Season All Access"
You can watch all post-season games.

Split the revenue between the teams and the league. Eliminate local blackouts and make national broadcasts available. Maybe breakdown the pricing like this?

Tier 1 All Access: $486 per season ($3 per game x 162) Higher cost justified by offering access to 2,430 games. That's the equivalent of $0.20 per league game during the regular season.
Tier 2 Single Team Season Ticket: $162 per season ($1 per game x 162)
Tier 3 à La Carte: $4 per game to select from any league game, or $3 per game to select from a single team's 162 game schedule.
Tier 4 Single Game: $5 per game
Post-Season All Access: $80 for the entire post-season. With 32-53 games possible you're paying what would come out to somewhere between $2.50 and $1.50 per game.

 

[Petagine in a Bottle]

This has been beaten to death here, but right now, NESN probably charges cable companies $5-$10 per month per subscribing HH for the right to distribute the network in market. To move away from that, if they scrap that model, and go direct to consumer…the cost is going to be way more than people think. Wasn’t it $30 a month when they launched that product last year that allowed people to pay for just NESN?

And FOX pays billions for exclusive rights to broadcast the postseason. Something like $750 million a year. I don’t think MLB wouldn’t be able to offer these games direct to consumers.

 

[finnVT]

I'd be curious how a tiered subscription model would be received by the MLB fan base. I'd probably pay above the current MLB.TV cost if it meant I could actually stream in-market games legally. I don't watch enough out of market games regularly anymore to justify the cost of the product as it's currently offered, but I'd be a customer again with the options below.

Tier 1: "All Access"
You can watch all 2,430 regular season games with no restrictions. Basically the equivalent of MLB.TV now without the blackouts. All games are available to re-watch until the start of the following season. Post-season games included for no additional cost.

Tier 2: "Single Team Season Ticket"
You can watch all games for the team you purchase a "season ticket" for. They could also offer sub-tiers that align with the in-person season ticket packages that are already offered for each team (half season, weekday games, weekend games, etc.) You retain access to re-watch the purchased games until the start of the following season. Post-season games included for no additional cost.

Tier 3: "à La Carte"
Pre-purchase a select number of games per season (10, 20, 40, etc). You choose the games as the season progresses. All games are available to re-watch until the start of the following season. Post-season game can be added an an addon for a discounted price.

Tier 4: "Single Game"
You can only watch the one game you purchase. All games you purchase can be re-watched until the start of the following season.

"Post-Season All Access"
You can watch all post-season games.

Split the revenue between the teams and the league. Eliminate local blackouts and make national broadcasts available. Maybe breakdown the pricing like this?

Tier 1 All Access: $486 per season ($3 per game x 162) Higher cost justified by offering access to 2,430 games. That's the equivalent of $0.20 per league game during the regular season.
Tier 2 Single Team Season Ticket: $162 per season ($1 per game x 162)
Tier 3 à La Carte: $4 per game to select from any league game, or $3 per game to select from a single team's 162 game schedule.
Tier 4 Single Game: $5 per game
Post-Season All Access: $80 for the entire post-season. With 32-53 games possible you're paying what would come out to somewhere between $2.50 and $1.50 per game.

I don't mind the tier breakdown here, but those prices would have me dropping mlb.tv in a heartbeat. As someone out-of-market that doesn't care much about blackouts (and is generally fine with the ~$140/year or whatever I pay now), that's a 350% increase compared to what I pay now for unlimited access, and even switching to just sox games would mean a small price increase for a substantially more restricted product. I can see why some people would like the a la carte options, but part of what I enjoy with mlb.tv is just flipping around games for a few minutes at a time, so they seem like a poor compromise (not to mention that for the price of mlb.tv currently, you'd only get 35 games at the a la carte pricing here).

I get that there's a lot of revenue to make up from the loss of RSNs, and these might be the price points they need to do that, but that really just highlights the problem MLB is going to run into here-- they're not going to maintain viewers with price points like these, so either they pick lower prices to keep viewers, or use pricing like this and lose viewers, but either way feels like they're in for some pretty big budget adjustments.

 

[8slim]

This has been beaten to death here, but right now, NESN probably charges cable companies $5-$10 per month per subscribing HH for the right to distribute the network in market. To move away from that, if they scrap that model, and go direct to consumer…the cost is going to be way more than people think. Wasn’t it $30 a month when they launched that product last year that allowed people to pay for just NESN?

And FOX pays billions for exclusive rights to broadcast the postseason. Something like $750 million a year. I don’t think MLB wouldn’t be able to offer these games direct to consumers.

NESN is a bit of an outlier given the team's ownership. But I suspect we're on the precipice of a significant change in the local rights model for baseball. The RSN/Cable model is failing, fast (as we've discussed in other threads). You're 100% correct in that a single team/network direct-to-consumer service can only cost an exhorbinant amount for it to maintain the current economics.

Just yesterday it was announced that MSG+ will go DTC at $30/month (for the Knicks and all 3 NYC area hockey teams). Who's paying that? A: Not very many people.

My belief is that the only way to make the economics work is to aggregate local rights, centralize them, offer a bundled DTC service (with no local blackouts) and work up some kind of revenue split that advantages larger market clubs (and/or rewards teams withy higher viewership levels).

The issue is simply timing. How long does MLB want to wait out the inevitable collapse of RSNs on cable? And teams like the Sox may not be eager to relinquish full control over their rights as long as their respective RSNs are viable. That may take a few years, at least. Boston and NY, for example, still have one of the highest cable subscription rates in the country.

 

[The Gray Eagle]

FWIW, NESN 360 is $30 a month right now.
That's basically $180 for the regular season.
Being NESN, of course it sucks-- no DVR capability at all, no way to watch a game that's ended unless or until NESN re-airs it on cable, etc. It's basically a way to watch regular cable NESN on phone, computer, tablet, etc. without having to have cable.
It's a far cry from when YouTubeTV carried NESN and you could automatically record every game, watch them whenever you want, speed through commercials, start watching the game after it started and then catch up, etc.
There's no way the price for watching Sox games with streaming is ever going to cost less than $30 a month. I can't see them agreeing to any price point lower than what they already charge. To actually make it a decent streaming experience, they would surely charge more for any improvement.

 

[Max Power]

25-30 years ago NESN was a premium channel. They only carried half the games (the rest were on over the air TV) and it still cost like $20 a month. Just considering real world inflation and not baseball salary inflation, that same package would be at least $30 a month.

If baseball really does go direct to fans with a streaming service, it will be both very expensive and won't come close to generating the same amount of revenue.

 

[LogansDad]

25-30 years ago NESN was a premium channel. They only carried half the games (the rest were on over the air TV) and it still cost like $20 a month. Just considering real world inflation and not baseball salary inflation, that same package would be at least $30 a month.

If baseball really does go direct to fans with a streaming service, it will be both very expensive and won't come close to generating the same amount of revenue.

If I remember correctly, home games were on NESN and away game were on TV38.

I agree this seems like a losing scenario for fans and the sport, so it kind of sucks that local sports stationed have been managed badly enough to put them in this situation. Hopefully they have really smart people working on a solution, because I sure can't some up with one that doesn't end badly.

 

[Red(s)HawksFan]

If I remember correctly, home games were on NESN and away game were on TV38.

I think that may have been the case more for the Bruins than the Sox. My recollection is that TV38 had nearly all the weekend games. Certainly every Sunday afternoon game because I remember TWiB followed by the Sox game was a Sunday TV38 staple (and the game was usually followed by Ask the Manager). Weekdays might have been split a bit more randomly.

 

[8slim]

If I remember correctly, home games were on NESN and away game were on TV38.

I agree this seems like a losing scenario for fans and the sport, so it kind of sucks that local sports stationed have been managed badly enough to put them in this situation. Hopefully they have really smart people working on a solution, because I sure can't some up with one that doesn't end badly.

Re: the bolded, it's not bad management necessarily, its consumer behavior. People are cutting the cord, and that has put a gigantic dent in the business model of RSNs.

There's an argument to be made that sports fans benefitted from that model disproportionately, since the fees sports networks charged were essentially subsidized. And the business was so lucrative for everyone involved that coverage dramatically expanded, which was also great for fans. I mean, I remember the days when many games simply wouldn't be televised. That's impossible to fathom these days.

Anyway, this is the cost of cord cutting. Better for entertainment programming in many respects, and in some ways good for sports fans, but not as good in others.

 

[Mahkis Smaht]

Tier 1 All Access: $486 per season ($3 per game x 162) Higher cost justified by offering access to 2,430 games. That's the equivalent of $0.20 per league game during the regular season.
Tier 2 Single Team Season Ticket: $162 per season ($1 per game x 162)
Tier 3 à La Carte: $4 per game to select from any league game, or $3 per game to select from a single team's 162 game schedule.
Tier 4 Single Game: $5 per game
Post-Season All Access: $80 for the entire post-season. With 32-53 games possible you're paying what would come out to somewhere between $2.50 and $1.50 per game.

Is this ad free or ad supported?

 

[savage362]

Is this ad free or ad supported?

Good question. I didn't factor that in. Admittedly, there wasn't a ton of thought put into the base pricing. I started with a simple $1 per game and then scaled in $1 increments from there to price the other tiers. Now that I looked and reminded myself that MLB.tv offers a single team package for $130 which breaks down to about $0.80 per game (simplified for a 162 game, no-blackout schedule) I misjudged where the pricing should be and I'd agree with anyone that says my initial proposed prices should be scaled down significantly. Like finnVT said, maybe they would need to charge prices that high to make up for the lost RSN revenue but that's undoubtedly going to come at a cost of losing subscribers and will have the opposite results.

I threw together a quick table that breaks down potential costs on a per/game basis for hypothetical tiers 1 and 2. The current single team equivalent is highlighted as a reference point.

Sticking with no blackouts for the exercise, what could the league get away with price-wise, without chasing off too many subscribers? What value would subscribers give to no blackouts and ad-supported vs ad-free? In market subscribers are likely putting more value on no blackouts while out of market subscribers probably don't care as much. Where do they reach diminishing returns by going too high and losing too many subscribers. Is there a sweet spot for ad-supported vs ad-free options? Maybe $1.00/game is the tipping point if not already too high for most.

I'd probably be a Tier 2 subscriber at $0.90 with ads, or $1.00/game for ad-free but can't see myself going any higher without additional benefits.

I'd probably be a Tier 1 subscriber at $0.07/game with ads, or $0.08/game for ad-free.

 

[Spelunker]

Is there a point to paying more to be ad free for sports? The breaks are going to be there no matter what, so it's not like Hulu where you can get just the content straight through.

 

[section15]

Interesting discussion. The streaming decision may likely been spurred, in part, by the number of cord-cutters - and, the realization that a lot of cord-cutters are in the prime demographic! It's not just po' folks who don't have cable. When the connection between Boston channel 7 and NBC was severed, network execs had a fit because they learned people in Newton, Wellesley, Dover, etc. had cut the cord.

Example = my daughter grew up in a house - we had (still have) season tickets - she could go to playoff games, etc., if she wished. She now lives in the Pioneer Valley - she and her husband have a substantial income and two kids. BUT - because they get over-the-air TV from Hartford, Springfield, and Albany, they don't have cable.

My grandchildren have never been to Fenway, and they have no interest in baseball. Conversely - I was hooked on the game as a youngster; it helped that my Dad was a fan, but I could also watch around 55-60 games on free television in the 1950s-1960s. The grandkids are indifferent toward the Red Sox.

Free television is gone - and many kids are now alienated from the game. The Red Sox (radio) Network is likely adequate...but it's not the same as a free TV game.

I think the decision of the Red Sox to dump its ties with free TV is going to hurt them in the long run.

 

[nattysez]

Diamond declared bankruptcy, but say they can keep paying for rights and showing games. Very curious what vendors will get stiffed as part of the bankruptcy. I'm also not sure how their declaration of bankruptcy seemingly turned into a nothingburger.

https://www.espn.com/mlb/story/_/id/35860875/diamond-owner-rsns-40-plus-teams-files-bankruptcy

 

[nattysez]

First shoe has dropped -- Padres' broadcast rights have reverted to MLB. MLB is taking over the broadcasts.

https://www.espn.com/mlb/story/_/id/37762861/diamond-sports-group-fails-pay-padres-loses-broadcast-rights

 

[mauidano]

First shoe has dropped -- Padres' broadcast rights have reverted to MLB. MLB is taking over the broadcasts.

https://www.espn.com/mlb/story/_/id/37762861/diamond-sports-group-fails-pay-padres-loses-broadcast-rights

I can't emphasize enough how huge this is. Bally's was a player; their portfolio has 17 teams.

I live in Hawaii and am blacked out for all California teams ( not Seattle; go figure). We have the Dodgers and Angels on our cable package. To have MLB.TV finally live up to it's purpose is a win for fans. Can't wait to watch the Padres games.