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MLB focusing on media rights plan for all teams

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Published in Baseball
Thursday, 21 November 2024 11:38

NEW YORK -- For Major League Baseball commissioner Rob Manfred, the recent conclusion of Diamond Sports Group's bankruptcy created an "overwhelming sense of relief" with short-term certainty as the league eyes its long-term media rights plan.

"I think the good news is that we did a pretty good job in terms of maximizing the economics for the clubs," Manfred said Wednesday during the owners meetings. "We never lost a game. And we have a lot of flexibility come 2028, which was our primary focus."

A bankruptcy judge approved Diamond's reorganization plan last Thursday, setting the country's largest operator of regional sports networks to emerge from bankruptcy 20 months after initially filing for Chapter 11.

Diamond moves forward with at least six MLB teams, while MLB, at the moment, possesses the local media rights -- linear TV rights and in-market, direct-to-consumer streaming rights -- for seven teams. The six clubs that negotiated new deals with Diamond -- the Atlanta Braves, Detroit Tigers, Los Angeles Angels, Miami Marlins, St. Louis Cardinals and Tampa Bay Rays -- will all have their contracts expire by 2028, when MLB's major national deals with ESPN, Fox and Turner are slated to end. That is not a coincidence.

MLB hopes to have roughly half its teams' broadcast rights to negotiate with companies then. The league's ultimate goal is to hold linear and digital rights for all 30 clubs to have available for negotiations with networks. MLB believes nationalizing the broadcast rights would maximize revenue and eliminate local blackouts, which would expand reach. But that would require compelling clubs with stable regional sports networks, a few of which at least partially own the networks, to eventually relinquish their control and join MLB's cluster. That group includes the Boston Red Sox, Los Angeles Dodgers and New York Yankees.

"Everything that we do, we believe we have to convince the clubs that it's in their economic interest to do that," Manfred said. "And I think a big piece of that is the changes that have taken place in the media landscape. We had a long conversation about this [Wednesday]. More games on national outlets is an important key to maximizing your revenue. Once you realize that, you can begin to build a consensus around the idea that we need to be more national."

MLB will broadcast games for the Arizona Diamondbacks, Cincinnati Reds, Cleveland Guardians, Colorado Rockies, Milwaukee Brewers, Minnesota Twins and San Diego Padres in 2025, though the Texas Rangers and Kansas City Royals are still undecided and could technically join as well. The Seattle Mariners are expected to join in some capacity in the near future.

Adding Diamond's teams to that mix could ensure that at least 14 to 16 teams are part of a national umbrella, with others possibly joining within these next four years.

But the biggest question surrounds the big-market teams who would make MLB's offering far more appealing to buyers but would also be far less willing to split local-media revenue evenly. On Wednesday, Yankees owner Hal Steinbrenner, whose club owns 25% of the YES Network, said discussions had not yet begun on the matter.

"We just haven't gotten into it enough that I could give you an intelligent answer to that," Steinbrenner said. "We haven't gotten into it. We only own 25% of YES. We got a lot of other owners. And, you know, that's a discussion to have at some point with them -- or not have with them. But we're not there yet."

New York Mets owner Steve Cohen declined to comment on the subject this week. Unlike the Yankees with YES, the Mets don't own a portion of SNY, which controls the rights to Mets games through 2030.

Packaging teams together would also require approval from the players' union because it would mark a change to revenue sharing. But getting there requires the heavy lifting of getting all 30 teams on board.

"Now there are mechanics and existing agreements that we're going to have to work through," Manfred said. "But if you're making a change that you believe is going to substantially increase your revenue over the long haul, it gives you that great thing that helps you solve a lot of problems. It's called money."

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