MLB Reportedly In Talks To Launch Its Own In-Market Streaming Service As Soon As 2023
Major League Baseball has reportedly entered into talks to launch its own streaming service as soon as the 2023 season, according to sources mentioned by the New York Post.
According to the Post, the NBA and NHL are also considering partnerships with MLB on the new streaming services. Subscription rates would vary by market, and may land somewhere between $10 and $20 per month.
This flies in the face of the price for the proposed Bally Sports streaming app. Bally’s parent, Sinclair Broadcast Group, has said that a direct-to-consumer streaming product could live in the $15-to-$20 per month range. Outside observers have indicated that the price for the app could be as high as $23 per month for consumers.
Last week, MLB Commissioner Rob Manfred and NBA Commissioner Adam Silver, speaking at the World Congress of Sports conference, were both critical of Sinclair's efforts to move forward with a DTC streaming app.
Since the 1990s, consumers have been tied to regional sports networks for coverage of local sports teams, particularly with MLB, the NBA and NHL. According to the Post, sources said that while MLB wants to give fans the option to sidestep pricey cable packages, local games would still be tied to cable television and the broadcasts themselves would look the same as they do now, according to people familiar with the plans.
MLB.TV, which already offers out-of-market games to fans for a subscription fee, would also continue to operate in this event.
MLB.TV
MLB.TV is the official streaming service of Major League Baseball. You can see every out-of-market game live or on demand, and choose home or away TV and radio feeds. The app allows fans to watch up to four games simultaneously on the same screen through their Multi-view feature.
According to sources mentioned by the Post, Manfred could offer cable TV companies a piece of the streaming revenue in order to compensate for potential subscribers lost to streaming. According to what Manfred is selling, cable TV wouldn’t lose many subscribers as a result of a streaming MLB service, suggesting that the fans MLB is targeting with this proposed service are younger customers who have already cut the cord.
“For now, clearly, the (cable) bundle’s broken. I mean, we’re seeing now an issue that’s very topical at the moment, our regional sports networks, Sinclair in particular, and they’re, we’re trying with them to work through those issues,” said Silver last Tuesday at the World Congress of Sports.
While Sinclair has not commented on the MLB proposal as of this point, it is certain that it would completely derail plans for the proposed Bally Sports product. Sinclair currently holds streaming rights for 14 of MLB’s 30 teams. All told, Sinclair holds the rights to a total of 42 teams across Major League Baseball and the other two major leagues — including 14 NBA teams, and 12 NHL teams — a much smaller number than the 92-team total of the three leagues combined.
“We believe those digital rights are crucial and we want to own and control the platform on which they’re delivered, we may have partners in that process,” Manfred said. “But this idea that late in the discussions we somehow demanded an equity stake (from Sinclair), that’s just not accurate.”
When asked about Sinclair’s claim that it is “close” to obtaining the necessary rights to launch its DTC RSN service, Manfred said the more accurate statement would be that Sinclair does not have enough digital rights from enough clubs in order to have a viable direct-to-consumer product.
“The other set of rights they’ve talked a lot about is gambling rights,” Manfred said, “they don’t have those either. We have been clear with Diamond [Sports Group, the Sinclair subsidiary that technically owns the Bally Sports RSNs] from the very beginning, this was not a late starting issue. We’ve been very clear with them from the beginning that we see both those sets of rights as extraordinarily valuable to baseball, and we’re not just going to throw them in to help Sinclair out.”
This is not the first time MLB has dipped its toe into the water when it comes to broadcasting and streaming. MLB tried to by the former Fox RSNs in 2019, before Sinclair stepped to bat and purchased the regional sports networks for $9.6 billion before rebranding them with the Bally Sports name. Sinclair was forced to borrow about $8 million to fund the deal.
Since taking the RSNs over, Sinclair has faced an uphill battle. In calendar year 2018, the RSN portfolio delivered a combined $3.8 billion in revenue across 74 million subscribers. But the pandemic wreaked havoc with live sports last year. Today, Sinclair shares are trading for half their value from their May 2019 high. Sinclair Broadcast Group reported a loss of $3.2 billion in Q3 2020, including writing off part of the value of the RSNs. Multiple reports have suggested that Diamond Sports Group is close to bankruptcy, likely due to lackluster subscriber and carriage numbers.
“I think that the negativity surrounding the RSNs has been increased exponentially as a result of the situation with the Sinclair subsidiary Diamond. Part of their problem is cord-cutting. The other part of their problem is there’s excessive leverage on that business,” Manfred said. “If you think about what they paid for it, how much debt they have on it, I mean, you think it’s over 80%, it’s a huge number. And that leverage has produced headlines that are more negative. There are RSNs out there that aren’t thriving or growing, but they’re going to survive. Look, look, there are RSNs — YES and NESN — that have businesses that remain profitable, they’re affected by cord-cutting. But the fact of the matter is I think the negativity has been increased by the Diamond (Sinclair) situation.”