One of the biggest issues many fans have and have had with Major League Baseball and having access to following the games is that they have been blacked out of watching their home team play in many areas due to a lack of access. In many places the solution has been simple: just subscribe to your local cable or satellite provider and you can get the regional sports network that carries the games for your home team.

It’s not always that easy for everyone, though. In some places you may live in an area where you only get some of the games on your regional sports network because another team has priority and you live in a bit of an “in-between” area. People in Iowa, for example, are blacked out of six different teams despite the state having zero teams in it. Not every cable or satellite provider even offers up every regional sports network to cover those six teams, so if a person living there wanted to legally watch all of the games they may have to have three different cable or satellite companies providing them services just to cover the various sports networks.

Major League Baseball is working on a solution to that according to The New York Post’s Josh Kosman. He is reporting that MLB is looking to create a new streaming service that would allow fans to stream in-market games. Kosman reports that the NBA and NHL are both considering a partnership with MLB on this streaming service and it may cost $10-20 per month. While the service won’t be available next season, it does have a chance of being available for 2023.

For a sports fan who doesn’t watch much else on cable – which is very easy to do these days with options such as Netflix, Hulu, etc – this kind of deal sounds incredible. It opens up options that aren’t, or haven’t been available in the past for these kinds of users.

And more so of late, we’ve seen situations where more than a few cable or satellite companies don’t even offer multiple regional spots networks. Bally Sports has lost it’s affiliation with a ton of carriers over the fees they want per subscriber to the channel and the carriers are playing hardball and saying it’s too much.

The simple solution would seem to be to just end the blackout restrictions and allow users to get for $130 a year and let people in Cincinnati watch the Reds games (or whatever city/team in your hometown). Of course, though, it’s not that simple.

That would cause a big domino effect for these regional sports networks who pay anywhere from about $30,000,000 to $200,000,000 a year to teams for the broadcast rights to games. That money from the regional sports network is acquired because their station gets $4-8 per subscriber to cable/satellite, not just the people who are watching the games.

Using the Reds as an example – roughly 40,000 people watched each Reds game during the 2019 season in the “Cincinnati market” according to The Business Journal. Let’s say that the organization could double that amount of viewers somehow, and also charge $30 a month to those people – that’s still just $14,400,000. While we don’t know exactly how much money Bally Sports pays to the Cincinnati Reds, what we do know is that it’s “in line with the market”, which at the time the deal was made, seemed to be in the $60,000,000 per year range. Pushing that a little bit in either direction doesn’t matter because it’s still a far cry from the $14,400,000 we just talked about.

Teams need the television money in order to make payroll. It’s a good chunk of their revenue each year. The television money is made because everyone with Spectrum, Cincinnati Bell Fioptics, and DirecTV in the greater Cincinnati television market is paying somewhere around $6 for Bally Sports. There are probably 2-3M people in the “local” market (Cincinnati/Dayton/Columbus/Indianapolis) that are cable/satellite subscribers. Do the math (it’s a big number).

If sports fans can simply opt out of paying for a bunch of other channels and just get the specific sport that they want, it will cause problems for when the regional sports network next goes to the provider and asks for that same $8 per subscriber because the carrier will just laugh at them and say no, now, because the people they caved to were those willing to pay that as a part of their cable package and now they know those people will just go buy the direct product in some cases. So now the carrier comes back and offers $4 per subscriber and the regional sports network may have to take it because they don’t have nearly as much leverage now. Can they even stay in business if they don’t find a way to get a good chunk of money from the “only sports” streamers?

Major League Baseball should be doing all that they can in order to get their product in front of as many eyes as possible. This certainly would do that. But at the same time they can’t, or at least shouldn’t be trying to cut out the middle man that is the regional sports networks because they rely, heavily, on that money. And if this causes the regional sports networks to go bust it’s going to lead to a very, very big problem for the teams in Major League Baseball.

I am sure that the folks at MLB have run the numbers, done the market research, and have a far better idea of all of this than I do. But there seem to be some big steps to overcome from my view at 40,000 feet in order to make all of this work in a way that is good for just about everyone involved.

35 Responses

  1. Ryan

    Would “payroll” be an issue if there weren’t so many overpaid stiffs (Suárez, Samardzja, etc.)?

    • Doug Gray

      Would payroll be an issue if teams spent more money and owners didn’t hoard their wealth?

      • Chris

        Yes, it would be, because the game itself survives due to Capitalism. The rich are able to own baseball teams, and they didn’t get rich by making slim margins on their investments. Some teams do it better than others, reference the Yankees, who have always had owners who hoarded their wealth, but still maintained the highest success in the sport.

      • Doug Gray

        The Reds were purchased for $276M in 2006. They are now worth over a billion dollars. The Reds aren’t making “slim margins” on their investment. And neither is any other owner. They are all making massive amounts of wealth off of these teams.

      • Luke J

        But they don’t realize those increases in team value unless they sell the team. There is a difference in theoretical capital gains and actual profit, i.e. revenue flow.

        p.s. don’t take this post as supporting the idea of tight purse strings. I fully believe good team owners are willing to lose money to make the team a winner, because, as you said, they still have much to gain in the long term. I was just pointing out the difference.

      • Doug Gray

        The difference is only that I didn’t mention that they could easily just go call the bank and get a loan if they needed to, just like the rest of us – except they’d get it easier and at a far better interest rate than any of us would.

  2. Old Big Ed

    I’ve never had the issue myself with my set-up, but I’ve always thought the solution to the black-out issue was for MLB to charge the in-market viewer and in turn pay the RSN whatever the the RSN would have gotten as a cable fee. So, if DirecTV or the cable provider was paying Bally $6/month, then MLB would collect (at least) $6/month from the customer and remit $6 to Bally.

    That seems to be a variation of what this plan is. The cable provider itself loses out, but that is going on, anyway, plus a lot of them are now ISP providers themselves.

    Another benefit for Bally is that the plan will increase eyeballs — those of local cord-cutters who heretofore couldn’t see the Reds — and Bally can charge more for ads. Ray St. Clair Roofing will pay more for ads but get more exposure. (I assume the coverage will include pre-game and post-game shows, too.)

    I also think that plenty of people will pay $10-$20/month just for the Reds, even to watch a few innings a night, as opposed to a general cable package, or as a supplement to Netflix, etc. This is part of the general trend toward “ala carte” content consumption.

    • Doug Gray

      The problem I see with just paying the carrier their price is that they then lose all leverage in negotiating that same price point with the cable/satellite company per user rather than per watcher. Let’s assume there are 2M cable/satellite subscribers in the general “Bally Sports Ohio” area. Let’s assume that’s $6 carriage fee. That’s $12M a month for Bally Sports Ohio. And while yes, there is other programming they have and operating costs and such, there’s no way that you can make the math work for them to simply get that same cut when they lose leverage with the other carriers who then say “we’ll give you $3 per subscriber because those die hards will just leave cable to get the MLB in-market package”.

      But here’s something that I failed to mention – it *seems* that in this new thing MLB wants to do they aren’t just giving you the rights to the regional sports network broadcast, but would be providing their own team to call the game, run the cameras, and that stuff.

      I don’t know. There’s a lot of stuff going on here, as I noted in the article. I just don’t know how it’ll work out to make everyone happy. I’m hoping for the best, particularly as someone who pays for cable from late February through October solely to watch baseball and only baseball. It’ll save me a few bucks if they get it right. But, I also expect the worst because MLB is involved and they rarely get much of anything right.

    • Jim Walker

      As a retired network engineer who spent the last 15 years of my career working on the network backbone of a ~30K user “Wide Area” business campus network, I’ll throw in to keep an eye on who owns/ controls the physical media that moves the content, stuff like routers, cabling (copper and fiber) and the like.

      The backbone and “last mile” physical provider is probably a cable company which is also a content provider or a (one time) landline telephone company (or spinoff). 5G penetration to the home could fundamentally change this, however.

      In the last year as pure steamering providers (and direct satellite) content providers have been shut out by Sinclair/ Bally, the large cable companies, by and large, have not had severe issues. Their control of the backbone and particularly last mile (as ISP) could well be the reason, keeping in mind that politics aside, network neutrality is not currently assured by government policy. Thus whoever controls the network can control priority of the content moving on it.

  3. Luke J

    I’m in a weird area where I am local to 3 teams on regional networks (Detroit, Cleveland, Cincinnati). I specifically subscribe to Spectrum because it’s the only way for me to get Bally sports in my area. The funny thing is, the Bally channel for Cincinnati doesn’t play the Reds games on my cable, but I can watch them on the Bally app on my smart TV. I hope they don’t mess around with that and all of a sudden I can’t get the Reds anymore.

  4. Jim Walker

    I watch some sports via cable/ streaming all year around. I’ve been doing some quick arithmetic in my head; and, I think it may turn out to be just as cheap for me to stick with a full cable package bundled with internet service than to buy the sports separately plus pay the unbundled price for internet to stream them in.

    My caveat is that I live in an area where the cable company is currently (and has always been) the only ISP. Perhaps if 5G to the home actually comes into being, the increased competition will change things. However, despite getting preliminary 5G solicitations several months ago, no provider is actually pushing it into homes yet in my area.

    • Jim Walker

      Missed saying that while I subscribe to cable for access to sports, probably at least 75% of my actual watching is streaming via the cable provider app/ interface or the Bally interface as opposed to watching via the traditional cable box.

      I have 100mb to the wireless router and this supports as many as 3 or 4 HD simultaneous video streams.

  5. JayTheRed

    I don’t have this issue except when the Reds play the Brewers.. Which is annoying lucky with MLB package from I am still able to listen to the game on the Radio side and follow along with the gameday. I would like to be able to actually watch those games though too…

    Here is hoping a good solution comes forth without hurting teams.

  6. Andy

    NFL now offering all local team games FREE, both over the air and streaming, and they throw in SNF/MNF. It’s incredible. MLB has got to move soon (2023 seems too long to me). They should offer a free service that gives one local game per week, and use the ad space to sell the hell out of the paid/all games package. I’ll probably go a second year with no Reds on TV in 2022. I’m wondering if Bally’s will offer standalone products for 2022, but am worried about excessive gambling tie-in.

    • Doug Gray

      Bally Sports/Sinclair has been planning to do this, with a heavy placement on having in-app betting so they can make even more money from you on top of the subscription….. but Rob Manfred seems to have said that they actually don’t have the rights to do that. It will be interesting to see how that one works out.

      • Jim Walker

        Leveraging against each other for the one big deal in a new partnership??

        How about MLB agrees to buy the raw camera output of regionals but reserves the right to mix it as they please and add proprietary content including their own on air personalities. Regionals get the same reciprocal rights from MLB in parks where they have no production plant.

        Cable and streamers get a kickback based on a formula derived from the number of subscribers they lose cross checked against MLB subscriber rolls to determine those subscribers who used to be cable/ streamer subscribers. Regionals get plaid for cable/ streamer subscribers who remain with cable/streamer and actually watch the regionals. (if they can authenticate subscribers now for access via regionals apps, they can certainly manage this).

  7. MIredfan

    First time caller, long time listener
    Not trying to rehash a worn out topic, but I find the frequent references to the tightwad owner to be puzzling. Most here will acknowledge the Reds are a mid-market team. For 2021, their team salaries fell just below the league average. Yes, it’s not a simple calculation, and I’m sure different sites have different values, but regardless, the Reds are in about the middle.
    So…..where’s the beef? Perhaps a better question to be asked: How is it the Rays consistently make the playoffs and make the Reds look like spendthrifts? One site lists the Reds at $126M and the Rays at $71M. That’s not even close. Perhaps more attention should be paid to those making the decisions on how the money is spent.

    • Doug Gray

      That other teams also aren’t spending enough money doesn’t make me feel better about what the team I invest so much time in when I know for a fact that they could be spending money.

      • MIredfan

        Doug, you have to choose to look at the positive.
        I’ll show you how by example: I’ll always remember 2021 as the year Geno hit .355 in September with 7 dingers. He raked!!

      • Doug Gray

        2021 – the year Jonathan India introduced himself to Major League Baseball.

      • Chris

        What’s enough in your mind? I personally think the Reds spend a lot of money for their market size. As alluded to, it seems right in the middle, especially based on their market size.

      • Doug Gray

        I think every team in baseball can afford to spend $150M a year on player payroll.

      • Chris

        What do you base that number on? And how in the world is that fair. Do you not think that it’s much easier for the Dodgers or Yankees to spend $150 mil, than it is for the Reds, or Pirates, or even the Rays? If the Reds spend $150 mil and fail, it would take them years and years to recover from that failure, but if the Dodgers or Yankees fail at their large spending amount, they can recover in a year or less. All things are not equal in this case.

      • Doug Gray

        I base it on everything that we know about the money teams are bringing in (mostly from what Forbes reports every single year).

        Yes, it’s easier for the Dodgers or Yankees to spend $150M than the Reds. That doesn’t mean the Reds can’t spend $150M.

        It’s not “fair”. It’s never going to be fair. Baseball will never be the NBA or NFL with a salary cap and floor that’s basically the same number. That’s a multiple-reason explanation there involving the television contracts and how they are handed out, the players union being far stronger in MLB than the other two sports, and the ownership in the sport where the big market teams want to win and are willing to spend, while many non-large market teams are content with simply making money.

      • BK

        But Forbes data pretty much backs up the fact that Reds break even on an annual basis. An increase in payroll would clearly change that fact. You’ve often argued the Reds could borrow against the value of the team, but in time that money must be repaid and would thus impact the ability to cashflow future payrolls. Interest is not insignificant. Based on their financial reports and Forbes analysis, we know the Braves are paying a little more than 5% in interest annually.
        Getting loans to fund working capital will cost at least that month. In short, it’s really unsustainable to borrow against the value of the team. So how do you “know”?

  8. Doc

    Thread makes me happy I’m not addicted to watching TV.

    • Jim Walker

      Yeah, I don’t mind the fees. Neither my wife nor I really see all that well anymore to drive at night except when necessary. So, it is not like we are going to be out and about like we used to be. She still reads a lot. I used to but issues I’ve had with my eyes make it difficult for me to read a hard copy book anymore (eyes don’t wrap lines well) and I don’t really get into reading books on a computer that much.

      I just wish a person could pay a fair price and have one channel or button to click for all Reds, another for CBJ hockey and a 3rd for OSU football versus having to keep track of which channel tonight’s game(s) are on.

      • Luke J

        My cable streaming service has that. I go to the sports tab, select the teams I follow, and it is all right there, perfectly collated for me. I can even set it up to record every game from my chosen teams automatically, or auto-tune the TV to start showing my games as soon as the broadcast starts. I’d imagine many streaming services have this feature (as my Hulu live-tv subscription also has this feature, as did Dish Network when I had it).

    • Doug Gray

      I have been enjoying watching a lot of television the past two weeks. I’ve caught up on some shows and checked off a few movies I wanted to watch during the baseball season that I simply didn’t have/make the time for.

  9. MBS

    I have every confidence that MLB teams will find the money.

  10. Frankie Tomatoes

    Everyone has their own streaming channel now. We are to the point where between having the internet and then 3-5 streaming services costs as much as having the internet and cable bundle everyone wanted to get away from. The customer never stood a chance.

    • Jim Walker

      Amen brother. And NBC in particular has cut off their nose to spite their face with me. For 5-10 years, I got up every Saturday and Sunday and turned on NBCSN and watched the Premier League till it ended for the day (or Ohio State US football came on). Even with the pandemic it has now been more than a year since I watched a Premier League game from start to finish like I used to and most weeks I don’t even fire up the TV to look for it even though I signed up for the level of Peacock to get it which I guess is all they really wanted.

    • Jonathan Linn

      agreed. everyone has a streaming service. Every streaming service has their own movies and TV shows that they are developing and are the sole provider for. I’m a huge Marvel fan…but can’t justify paying for Disney+ ….so i’m going to miss all of their new TV shows.

      • Doug Gray

        The Hulu/Disney+/ESPN+ bundle is the best deal going in streaming!

        Of course, that’s just my opinion. It helps a lot that ESPN+ has the UFC stuff and I watch all of that. I don’t use Hulu or Disney+ much during the baseball season because I just don’t watch much non-baseball. But Hulu and Disney both have a ton of stuff on there to watch.