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 MLB.tv 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.