The Padres and Diamond Sports Split Up
Earlier this year, Diamond Sports Group declared bankruptcy. That dry corporate action, precipitated by a huge debt burden, is starting to have real world consequences. This Tuesday, DSG missed a payment to the San Diego Padres, as Alden Gonzalez first reported for ESPN. That terminated the contract between Bally Sports (a Diamond subsidiary) and the Padres. By Wednesday, the Padres were off of Bally and broadcasting their own games via Major League Baseball.
That’s a pretty big escalation in what until now felt like a slow-moving situation. In fact, in bankruptcy court, Rob Manfred testified that the league received less than one day’s notice of this missed payment. “[They told us] less than 24 hours before they were going to go off the air that they were going to stop broadcasting Padres games,” he said. (Diamond’s lawyers have contested that timeline.) That led to the Padres terminating their contract with Bally Sports, naturally enough, and to MLB stepping in to broadcast games.
It’s no accident that the league was ready to wade into daily game production. They hired Billy Chambers, formerly a Fox Sports and Diamond Sports executive, as executive vice president of Local Media earlier this year. Hiring a regional sports network executive is a pretty good way to start building your own regional sports capabilities, and the league appears to have moved quickly here.
Last night, the Padres played the Marlins in Miami. The away broadcast was an MLB production, with the same graphic design as MLB network games. Per Gonzalez’s reporting, the team directly employs the on-air broadcasters, and the remainder of the broadcast group operates on a freelance basis, which means the league broadcast simply continued to use the same group. That game was available broadly, again likely thanks to contingency plans that the league had already prepared for. Again per Gonzalez, the league partnered with a variety of local cable providers to add an option to watch Padres games. It is also streaming the games on MLB.TV, its existing out-of-market streaming service.
In the short-term, the fallout from this bankruptcy is likely to be minimal for fans. The games are all still being broadcast, and can still be purchased as part of cable TV subscriptions. In fact, the broadcast can theoretically reach a larger portion of the San Diego market thanks to the streaming option. Previously, viewers without cable didn’t have any way to tune in thanks to local blackouts. As Ginny Searle noted, there were previously 2.2 million fans in Padres blackout territory who didn’t have the option to watch Bally Sports San Diego.
In practice, it won’t be that simple. The most invested Padres fans likely purchased cable specifically to watch the team. The remaining fans are unlikely to be as motivated to add Padres games. Regional sports networks have also historically benefited from huge carriage fees; cable companies paid them a fixed share of each subscription, and the RSN’s negotiated fixed contracts with teams. Some of those subscriptions were likely captive viewers, ones who wanted cable but not specifically a regional sports network, but who purchased a cable package that contained the RSN, thereby generating carriage fees. A direct-streaming option won’t capture those fees. There are also likely a good number of casual fans, ones who watched the occasional Padres game because it was available in their cable package, but who wouldn’t go out of their way to buy coverage specifically.
The league and the team certainly seem concerned about the near-term monetary impact. As Evan Drellich of The Athletic reported, the league central office is guaranteeing every team under the Diamond Sports Group rights umbrella at least 80% of its scheduled rights fee payments in 2023. That’s good news for the teams, of course – backstops are great to have if you can get them – but it’s certainly worrisome that there was some question of a more than 20% decline in rights fees.
Exactly how much money that 20% represents isn’t perfectly clear, but we can make some assumptions. The Padres signed a 20-year, $1.2 billion deal prior to the 2013 season. The deal was reportedly backloaded, and we’re entering the 11th year of its 20-year span, which means the fees this year are likely in the neighborhood of $60 million.
It’s no accident that baseball issued a guarantee to every team involved with DSG rather than specifically the Padres. DSG has already come up short by paying only half of its contracted rights fees to a four-team group: the Twins, Rangers, Diamondbacks, and Guardians. None of those teams have a share in their local network, while the Padres do, which explains why they’re being handled in a bundle while San Diego operates separately. But the ongoing bankruptcy hearings – the ones at which Manfred testified yesterday – could lead to those teams also leaving the Bally network and following the Padres’ direct-distribution route. A late-breaking update to the story: a bankruptcy judge ruled in MLB’s favor Thursday night and refused to reduce the rights fees payments DSG owes, which seems likely to lead to more defaults and more league-run broadcasts.
The Padres, and any other team that ends up joining them in this model, represent an experiment that the league has been flirting with. Manfred noted that the league itself bid $9.6 billion for the regional networks that Sinclair Media bought in 2019 and spun off into Diamond Sports, setting the current chain of events into motion.
They may yet get their wish. Direct streaming has been touted as a potential solution to the viewership bind caused by cable cord-cutting — the natural audience for regional sports broadcasts has been shrinking at a rapid rate over the past decade. In fact, streaming rights are a key point of contention between MLB and Diamond. Diamond reportedly offered to pay all its rights fees rather than selectively defaulting in exchange for streaming rights. The league quite reasonably turned them down, and I find it hard to disagree with them. “Give us your streaming rights or we won’t honor the deals we’ve already signed” isn’t a strong negotiating position, or one likely to make your partner predisposed to help you.
It’s too soon to tell how this direct streaming experiment will work out. The Padres are a unique case, not only the first team to try this new method but also a big-spending team with no sports competition in town. We may never know exactly how it works out, in fact: MLB is under no obligation to report how much money the direct streaming project makes. But the broad strokes make sense, and the league hardly has any choice in the matter, so we’re going to get a good idea of how this process works in the coming year.
As Joe Sheehan pointed out in his newsletter, the new landscape changes one significant detail: teams will now receive a variable amount of money for their broadcasts rather than a fixed amount. The A’s are making a reported $48 million this year in local TV rights; that probably wouldn’t happen in a direct-to-consumer world, because fans would simply unsubscribe. Even for teams that are less aggressively sacrificing the product on the field, a few down years never used to cut into their bottom line, and now it might. On the other hand, it’s now much easier to dip in and start watching a team’s games – you don’t have to purchase an entire cable plan to do so – which means that years of success might beget more broadcast revenue.
That’s a problem the league and its teams will have to reckon with over the coming years. It looks increasingly likely that Diamond’s piecemeal bankruptcy strategy – fighting over each individual team deal rather than selling off the entire package – is going to upend the RSN model. We’re not going back to a single entity owning half the broadcasts in the league – unless that entity is MLB.
Ben is a writer at FanGraphs. He can be found on Bluesky @benclemens.
Yeah, the casual fans is a big issue, both now and for keeping future fans.
One nice thing about bundling, when it works, is that it gives you option value. Yes, you’re really subscribing for the five or ten things at most you watch, but you might watch the occasional something else because you already have it. (This applies just as much to all the extra stuff that comes with a Netflix, Disney+, Hulu, whatever streaming service over the particular show you subscribe for.)
When it works well is when you have a lot of people, all of whom like five or ten things, but all are different things, and they end up paying about as much combined as they would a la carte, except now they have the option to occasionally watch one of the things that they wouldn’t go out of their way to subscribe. That can often be the rational price for the bundler to offer the bundle at. There can even be a few winner couch potatoes that watch everything in such a case.
Where it breaks down is when one set of options costs more than others. If the sports-watchers are all willing to pay more than the non-sports watchers, it’s hard to make the kind of bundle price that’s a wine for everyone. That’s one thing that’s really killed the cable bundle is sports carriage fees making it so that non-sports watchers could get everything they wanted for less. And even if stand alone sports subscriptions can make enough revenue (hard to know), it risks losing future generations of fans.
All that economics is separate from it being nice to separate out paying for entertainment bundles from paying for Internet access / paying for physical infrastructure to your house, so it’s less of a natural monopoly, or anything with how in the nascent and ferociously competitive streaming market there’s a lot of streamers losing money in the hopes of being one of the winners.
Why would anybody shell out $$ for cable bundles when you can get similar – or even identical – content for far less money and don’t have to pay for content you don’t want?
I’m not exactly sure how, but it apparently is possible to get around MLB’s blackout restrictions if you use their streaming service.
I don’t. I prefer baseball via radio, but I’m old.
One thing this foretells – no matter how the MASN mess is worked out, it two teams and MLB fighting over an RSN that is dying a slow death.
Great article, with more to come, I’m quite certain.
I pay for streaming and I’m still blacked out
Thanks for the write-up, Ben. Agreed with JohnThacker et al regarding casual fans, and I wonder if two things that I assume are in the pipeline will help out.
I see both of these as easy and probable ways to get more fans watching, but I am not very informed and have been living in a cable-less world for almost 15 years, so I am more amenable to these changes. Just ideas I’ve had floating since this started going down.
It seems like it should be simple. I want to stream my team’s games. Take my money! I’d easily be willing to pay $10 a month. I think most fans would. That’s less than 50 cents a game. I am not willing to pay $50 -$100 a month, though, to watch games even if you throw in 200 hundred channels of dreck and, I think, the failure of these RSNs shows that I am not in the minority here.
Part of the problem is that you can then get those 200 channels, assuming there are some you want to watch and aren’t all just dreck, on something like YouTube TV for a lot cheaper than $50 a month. They just don’t provide any of MLB’s RSNs, not even for your local team.
I agree that there should be a way to add a streaming option of just your local team’s games for a maximum of $20/month, and I’d immediately subscribe. In fact, I believe a few teams other than the Padres are already doing this.
Or from Comcast’s NOW TV for $20.
Comcast has said they can make more money from streaming because they don’t have to manage the distributed hardware. They can even get to folks relying on their phones.
Instead of working regional, they can work national snd poach customers from other cablecos.
Single team streaming subscriptions aren’t coming, they’re here.
And, of course, NYY and BOS got there first. But it’s not a couple bucks a month, it’s $25 & $40 respectively.
From ESPN (who themselves are rumored to be shutting down cable operations to go streaming-only):
“…the Yankees and Red Sox have established that with their own direct-to-consumer streaming services. New York’s YES Network is charging $24.99 a month or $239.99 annually, while Boston’s NESN 360 costs $29.99 and $329.99, respectively. The teams are targeting customers who are blacked out from watching games, and the success will offer a sense of fans’ willingness to stomach a price point higher than almost every streaming service, including those beyond sports.”
A few points to consider:
1- Over the last decade cable has lost 50% of its viewers (and over the air, too). This has been known since 2010 and before. The cablecos brought it upon themselves for fighting ala carte. Already the studios are shutting down some of their cable channels and there are predictions that in five years all the cable-only channels will be gone, replaced by a mix of On-demand subscriptions and free ad-supported linear TV channels like Freevee, Roku, Tubi, and Pluto. We ain’t seen nothing yet.
2- Some of the smaller cablecos are already shutting down their linear video operations and going broadband-only and signing up to redistribute a streaming TV service instead, Youtube TV most commonly.
3- MLB wants to bring all 30 teams under a single service with multiple tiers. But what the *big fanbase* teams can afford to charge isn’t going to fly for all teams’ fanbases, especially the rebuilding or injury-ridden teams. At a minimum, the month by month rates are going to have to be much than the full season rates and the full MLB rate. They might go with regional rates for the team by team deals. Say $50 a year for the A’s, $350 for LAD. Others in between.
4- That, said, no blackouts is worth a couple of bucks surcharge.
The fight with Diamond is just the beginning. Herding the 30 teams together without losing viewership is going to be the hard part.
re: (3) the easy answer is to simply have two price points. One for a single team, another for all of MLB. Or, just say screw it and set it as all or nothing. Participating teams pool the revenue and disitribute equally.
Yes. Of course there will be kicking and screaming from the big boys. But this is how every other major sports league does it, and honestly it paves the way for a league wide salary cap that every owner wants.
(4) Blackouts are a sop to the RSNs. Anything centrally run by MLB has no need for such things.
I doubt it’ll be two price points *only*.
As I said, I expect 4 options: two single team prices–monthly and annual–and two league-wide deals. And maybe 8: ad-supported and ad-free.
Just look at how even Netflix, Disney, and Max had to add ad-supported tiers.
They might even double up the single team services with minor league games and without and/or on-demand archival footage. (Want to watch Clemente’s WS games? Trout’s rookie season? Anything they have video of..Even old dtuff can be upscaled and colorized.)
There’s lots of things they can add to justify multiple price points.
Especially *higher* prices.
Key point is video streaming is a customer specific service. Let esch fan watch what they want…
…as long as they cough up the dough.
The Nats should do this
Indeed. A good way to settle once and for all the fight with Baltimore.
With streaming, regional rights matter less because every team has a national reach.
Worrisome to whom, exactly? I can obviously see that team owners wouldn’t like its consequences for their profit margins, but I am really totally unable to see why I as a fan should care. These discussions of the business side of baseball keep running up against this question — why should fans root for team owners when their business is fleecing us? I could personally care less if the owners’ profits shrink by millions if it means I get to enjoy the sport without the awful blackout rules and the parasitic cable-TV business model.
It’s only worrisome in that teams took on long term financial obligations with an expectation of a certain level of income. Without this, teams will get cheap, at least until things level out. They won’t sign veterans or offer extensions to young players. This will make the game worse in the short term. Though, if it gets us on-demand streaming of local games, it’s completely worth a short term decline in quality.
Which means they won’t take on those long term contracts. Especially the big ones.
Not exactly bad for fans since most of those lead to teams playing past their prime players but the MLBPA is going to scream bloody murder.
It is interesting enough that the first shoe to fall is SD.
I also have negative levels of empathy for the owners, but I think that sentence is just a little vague. Virtually every business on earth would be concerned about a defaulted $60 million payment, lol. That’s two Juan Sotos
What lost profits? Obviously, it means that expenses will be cut by the same amount next year so that there aren’t any lost profits, and that has a huge effect on the team’s payroll (not to mention other areas like international signings and scouting/development) and thus its ability to acquire talent to help the team win during the 2024 season.
Maybe it wouldn’t be much of an issue if every team faced the same problem (like when almost every team cut payroll in 2021 due to COVID), but only 14 of the 30 teams have their TV rights owned by DSG.
DSG isn’t the only RSN in trouble/going away.
It’s just the second.
Less TV money = less salary for players. Is that what you want?
I forgot that the teams were worker-owned cooperatives! Thanks for reminding me why I love both baseball and this website.
Generally speaking I agree, but the Nats are a good example of what happens when the line on team values starts pointing down. They’re desperate to sell that team, they’ve deferred maintenance on the stadium, and their media rights deal basically guarantees that they aren’t worth very much at this point. It could get to the point where things get really bad (like that damn clock falls down or something). The league might have to take over teams, basically.
The Nats media rights are more likely to be worth more since there’s no reason to cut the O’s on their streaming income, which might come from Montana or Oregon as from DC.
I’m pretty sure that the long-term play that MLB is going for will be to try is to grab the rights for the 14 teams (including some with pretty big fanbases like the Braves and Cardinals) under whatever Bally or Diamond is calling itself now alongside the four on AT&T Sportsnet (Rockies, Astros, Pirates, Mariners), and maybe also the four on NBC’s regional sports package too. And then they will try to launch something where they can sign a big, massive TV deal that lumps all of these teams in together.
The other 8 teams have very different deals that pay them a ton of money and they are in lucrative markets and MLB has no interest in upsetting that money stream, but MLB uses these guaranteed rights as a crutch; it’s the main thing the owners care about, way above and beyond things like attendance and streaming subscriptions that individual fans might buy. Because cable rights revenues are super predictable (and not terribly connected to fielding a winning team), owners like them. And a huge number of teams in many of these markets are not going to be able to sell the rights for anything like what they had previously, and would love to see if MLB negotiating as a unit can protect those gains.
If this were to happen, I actually think this might be really good for the game from a competitive standpoint. Of the teams losing deals, some of them are like the Angels and they are getting $140M per year (plus owning part of the network) and some of them are like the Twins ($45M per year) or Brewers (prior deal was only $28M, probably closer to the Twins now). It would be a huge influx of cash for those teams; there would be still be pretty big disparities between the Yankees, Dodgers, Red Sox, Cubs, and (presumably, eventually) Mets and the rest of the league, but I don’t think that’s something that you can change.
A massive TV deal with whom?
The day of the monolithic TV contract ended yesterday. The viewership is too fragmented for anybody to afford the deals that drove Bally under. In case you hadn’t heard, Bally isn’t the only RSN operator going away.
As of last Feb, the Hollywood reporter said:
“Warner Bros. Discovery is looking to get out of the regional sports networks business.
The media and entertainment giant, which also owns Turner Sports, sent a letter to the sports teams whose games it carries that it does not have the cash to pay upcoming rights fees, and that WBD will not fund the shortfall. The company proposes to hand control of the RSNs over to the teams and leagues, and warns that if it can’t execute on a transfer, Chapter 7 bankruptcy is on the table.”
Since them MLB has worked out deals directly with the individual cablecos but nobody, not even comcast is going to be coughing up those deals anymore.
At most you’ll see a handful of “game of the week” deals like the ones with Apple and Amazon.
Manfred’s goal is an expanded MLB.COM service with subsidiary options like the YES and NESN streaming services but the game moving forward is going to be D2C rather than B2B.
Point taken. but MLB could just launch their own streaming service and directly pay media fees to each team they cover instead of trying to sell the rights to someone else.
Yes. And that is *exactly* what they’re doing.
MLB is guaranteeing 80% of the deal that it replaces. As a floor, not the limit.
If SD turns the year around and goes on a tear and suddenly everybody around the country signs up for their games, they’ll get more than the old deal promised.
If they don’t then 80% is it.
An incentive to get fans as engaged as possibleby winning as much as possible. That is actually better for the fans.
I don’t think lumping all those “lesser” teams together is a great strategy – that’s exactly why I don’t pay for cable.
As a blacked-out Brewers fan, I’ll pay $5/month to stream just the Brewers. I won’t pay $20/month for the Brewers and a bunch of teams I don’t care about.
Liberty might just take the rights and figure something out, given this is basically their wheelhouse.
If I had the option to spend $20/month just to stream Cardinals games, I’d subscribe in a heartbeat. We cut the cord on Dish Network partly because they dropped Bally Sports Midwest, and the only streaming option here in St. Louis is to spend $80/month on AT&T’s service.
Would you go to $25?
You’re in the right “ballpark”: Yankees are at $25 and Boston $30.
So $20 for StL looks good even in a down year: SD is going to $20 a month via MLB.TV.
But a teardown team might have to pay fans to watch them lose 100 games. 😱
We may be seeing the end of teardown if teams have to “sing for their supper” TV money.
That alone might be worth a few extra bucks a month.
The Padres/MLB are charging $20 per month.
If this restores the connection between on-field results and revenues, it will do the game a service in the long run.
My thought exactly.
It will no longer be enough to “win December”; teams will have to win June, July, August, at least.
Punting a season to rebuild will mean punting on the cash.
They might still do it, but they will pay for it instead of being rewarded.
That rates as a plus.
I think people may be overestimating the amount variance clubs will experience in their broadcast revenue. I suspect you will see teams offer multi-year subscriptions at a substantial discount, especially for commercial customers like bars and restaurants. Teams will jack up the prices for month to month subscriptions to encourage people to buy the whole season, and likewise offer discounts to lock in for more than 1 year. It just opens up a whole new avenue of type of season ticket sales. They can offer special events to full season streaming purchasers just like they do to season ticket holders. Maybe you get 4 good seats to a game as an inducement to buy a full/multi season streaming package. Maybe offer 2 tiers of streaming, one with commercials and one commercial free with special content. The possibilities are endless.
Yes they can.
All of which are things they didn’t have to worry about with the RSNs, they just cashed the checks.
Again, I said there are lots of things they can do and now they’ll *have* to do them to replace the checks. They’ll have to “work hard for their money”.
Another plus.
I’m assuming it’s $25/month for 12 months but there’s basically nothing on from October to March for six months when viewership presumably crashes. The effective cost is $50/month for the season. Ergo, like Yes, they need another team option in non baseball months.
Some people would rather pay $25/month for 12 months, than $50/month for 6 months. Season ticket payment plans work this way, people prefer the cost certainty they get by spreading the payment out evenly over the whole year.
Living close to, if not over, 1000 miles from my favored nine has, ironically enough, made it so much easier to watch games. I’ve been a MLB.TV subscriber for a long time, and I have many quibbles with things like their UI and usability, but in terms of just “Can I watch the game?”, it’s been pretty rock solid for least the last 5-7 years. The few times when they have played in what is my “home market”, I’ve always been annoyed, because I’m far enough from that team’s stadium that it is a pain to physically go to a game, and I hate using the cable service that I unfortunately pay for.
Ditto.
No blackouts for me.
And if a given team is hot, I can watch them instead of a slumping one.
Depends on whether you’re a baseball fan or a homer.
The real issue is going to be the postseason. As an out-of-market MLB.TV subscriber, everything is pretty great until the postseason rolls around. Then I have to subscribe for a month of various crap, often 3 different services. Even figuring out what I need to get is a huge problem, and it ends up costing $80 or more.
Agreed. The postseason is always a huge hassle, especially since they started broadcasting on like 4 different channels. At least the World Series is still on a broadcast network, so all I have to do is get the old digital rabbit ears out of the closet every October.
As long as the broadcast networks stay solvent.
They too are losing viewers. 50% in the last ten years. Look up the Nielsen numbers.
“Appointment TV” died decades ago.
As long as we have services like YouTube TV that carry them (and allow you to record shows to watch at any time), the broadcast networks should at least survive.
Youtube TV is a cableco paying the same carriage fees as cablecos. Just using broadband internet insteaf of proprietary cable boxes.
Thing is, the networks 50% loss (and counting) is total, not just cable or OTA, or internet. The number of people interrested in fixed schedule+DVR watching is declining by the minute. Bingeing a month or season or an entire series at ones is becoming more popular at the same time.
ABC being on Youtube is no guarantee they’ll be profitable enough to keep on rolling out a full primetime slate, or playing tens of millions for sports, indefinitely. There is a point where they’ll have to cut to two hoyrs a night of 5 days a week, or just go away.
The challenge isn’t the distribution model, it is the viewership model. Things that made sense when there only was room for 3 TV channels dividing the audience make no sense when the audience has a thousand known good experiences waiting for them. Likewise, niche shows that made no sense in the olden days (say THE EXPANSE, THE BOYS, ARCANE,etc) can find their natural audience and make big cash off a smaller user base.
The way forward isn’t broadcasting but narrowcasting.
Instead of regional packages, individual packages.
We’re already seeing cable channels going away and cablecos getting out of the TV business because of the fragmentation of the viewer base.
As for the playoffs, don’t be surprised if MLB goes PPV on the side. Less money from broadcasters but more money from the cordcutters.
Should D2C take over as the standard way to view the game, I’m hopeful it will help act as an anti-tanking incentive. Or, rather, teams will have a stronger financial incentive to win, if losing teams can have fans simply unsubscribe. Relegation may be too much to ask, but this is a step in the right direction.
There’s a strong chance of further atomization of the viewing public. My cable company sold its business to another entity that subsidizes its constant commercials with obscenely high fees that seem to rise every couple of months, while cutting back on or reshuffling their packages. At some point, we’d have to look hard at just how many games we were watching–or is our usage just what a “casual fan” would do.
At last count, there were 470 cable tv providers.
As the RSNs fade, the sports leagues will have to deal with each one separately as long as they stay in business.
If the Padres aren’t subject to local blackout rules on the MLB app anymore, does that mean Padres fans in Las Vegas can start watching Padres home games on the MLB app? As it was, the MLB app was still treating Las Vegas as home territory, which meant Padres’ fans in Las Vegas could not watch home games.
The MLB app also subjects Las Vegas to blackouts for the A’s home games, the Dodgers, the Diamondbacks, and the Giants (among other teams), which means plenty of Padres’ away games are blacked out in Las Vegas, too, as if they were Padres’ home games.
At what point do the A’s become the only home team in Las Vegas? Why is it in the best interests of the A’s or the MLB to black out A’s home games for the rest of this season (and maybe longer) in Las Vegas? There is currently no local cable company offering A’s games in Las Vegas–so there is no way for the people of Las Vegas to watch their new team.
. . . actually considering how bad the A’s are, maybe that’s a good thing. Maybe they should wait for the stadium financing to be approved by the legislature in Carson City this month before they let the locals see how bad their new teams is.
Yup. SD fans everywhere can ante up no matter if they’re in SD, LA, or Vegas.
A taste of things to come.
Hooray!
I’m struggling to think of an LBO in entertainment that’s worked. Clear channel was a bloody disaster, and this one looks headed for that fate. At best you have a messy divorce in a decade when you can’t integrate operations like you thought you could.
Not an LBO, exactly, but AMAZON buying MGM is looking good. Certsinly better than Disney+Fox or WBD.
Whoever buys Paramount should also do well given how poorly Paramount+ is being run. Just not being stupid will be a step up.
Except for the part where it was partially responsible for the most expensive divorce in history… I agree Amazon buying MGM and getting into the business worked pretty well. They didn’t take any debt on for that though, right?
Nope. $9B in pure cash.
Just like Microsoft buying activision for $68.7 B.
Both turned part of their cash stash into tangible assets before inflation eroded their purchasing power.
Wait five years and not only will those units have generated enough profit to pay back the investment, they will also be worth a lot more than before if they ever need to flip’em.
MLB getting into D2C is the same kind of deal; but cutting out thr middlemen they can boost their take at the same time they give customers something they want.
Win-win.
What are you waiting for sounds like you have a deck to prep (lol. I’ve been beating this drum for a DECADE, and I agree totally)
I ditched cable 12 years ago.
I have all the major video streaming services plus GamePass Ultimate and even with 300mbps broadband, I’m paying less than what cable charges.
MLB costs more but less than going to the park and, frankly, more enjoyable. (No rain delays. Or midges.)
I’m not alone in running those numbers.
Sounds the MLB exerting it I’ll-gained antitrust travesty on the players and fans once again! Rise up against the evil satan! Don’t let the behemoth crush local sportswriters and independents. Power to the People. Unfettered capitalism is bad for everyone, even republicans and their oligarchs😎
😆
Good one!
Actually, MLB is getting rid of the middleman fetters.
The profits that were going to the RSN and the cablecos are now going to the teams and the players.
And fans get rid of blackouts.
I don’t see the connection between this and MLB’s antitrust exemption, much less “unfettered capitalism”.
Only in certain minds is US “capitalism” unfettered after a century of regulation via Congress, DOJ, FTC, etc.
MLB already runs a streaming service and nobody relevant blinked.
No reason to think any will mind.
Fascinating article! I love your stuff, Ben. I really couldn’t follow all the logic and analysis here. But it seems interesting that it matters that the Padres are a big market team without other professional sports competition. I wonder how college sports broadcasting rights enter the analysis. That is, does the NCAA encourage or discourage Bailey-types from broadcasting? Has the NCAA hired a Billy Chambers-like , formerly Sports executive who worked for Bailey? Does it makes sense for the NCAA to follow MLB strategy? It seems the NCAA would be in an even stronger position than the MLB. One more variable: does the anti-trust Division at the Department of justice need to investigate NCAA and MLB broadcasting contracts? Could be a good article there, at least for geek business economics prof sports fans in certain market areas – probably both of us😎.
Its 2.2 million more TV households, not people.
DSG paid 75% of the rights fee to 5 teams. Not 50%.
Manfred did not report that the league bid $9.6 billion for the RSNs. They bid $4.3 billion. Read a Disney stockholders report for either the quarter or the year. Murdoch also bid on the RSNs that Disney was forced to divest.
If you are looking to advertise on the new Padres single team package for MLB.tv they will tell you exactly how many eyes on the screen you are buying. It over 125k already and growing fast with revenue from it expected to top $10 million this season. The number of subscribers is expected to more than double that number for 2024 with revenue around $5 million per month. No one knows how much of that the Padres will get to keep, but I would assume the same percentage they get of their local TV deal with DSG.
The A’s were making an estimated $48 million from their TV deal in 2019. It is certainly more now. It is not one of the teams that is subject to bankruptcy from its RSN.