What Will MLB Teams Released by Diamond Sports Group Do Now?
There are several options awaiting MLB teams whose contracts are about to be dropped by their current distributor.
Major League Baseball may have gotten a reminder of why the old saying “be careful what you wish for” is still relevant this week. The league has been anxious to pull away from regional sports networks (RSNs) like the Bally Sports channels that 12 of its teams partnered with last year, as commissioner Rob Manfred sees a better future for baseball in streaming.
But when Diamond informed MLB of its plans to drop all teams except the Atlanta Braves ahead of a bankruptcy court hearing this week, the league was caught off-guard. There are several options now available to the teams whose rights are about to be up for grabs, and we’ll walk through them below.
Key Details:
- Many NBA and NHL teams formerly partnered with Diamond are now using over-the-air broadcast channels to distribute games.
- ESPN has expressed an interest in acquiring local rights to teams leaving RSNs.
- Some teams may try to hang onto their Bally Sports partner as long as possible.
The first option available to MLB teams who are faced with having their rights dropped by Diamond Sports Group and need to get their games on TV in 2025 would be to follow the example of NBA and NHL clubs like the New Orleans Pelicans and Florida Panthers. These teams have decided to pair with local, over-the-air (OTA) broadcast stations in their respective markets, making their games available to anyone with an antenna. Many have also established their own streaming services to allow local viewers to cut out any need for a pay-TV plan.
The upshot here is reach. Some Bally Sports channels only penetrate 30% of the homes in their respective markets or less, much less in some cases. Going to OTA channels can improve that reach to dramatically; the Utah Jazz increased their reach by 300% after going to local broadcast channels ahead of the 2023-24 NBA season.
The downside is that OTA channels don’t bring in the kind of ad revenue and licensing fees that cable commands. Regional sports networks were able to offer such big broadcasting fees to teams because for years, cable customers who didn’t watch RSNs still had to pay to receive them. That system has changed for many distributors, but even now some teams are reluctant to take less money to play on broadcast channels. Even with a direct-to-consumer (DTC) streaming service, the revenue gap some teams face after leaving an RSN could be stark.
Wait for ESPN?
Another option available to teams is to create a temporary arrangement for the 2025 season, while they wait for ESPN’s new streaming service codenamed “Flagship” to hit the market next fall. ESPN has expressed an interest in acquiring local rights to MLB, NBA or NHL teams for distribution on the service, which will be able to offer content to fans in specific regions thanks to its geolocating abilities.
It’s hard to say how much ESPN would offer teams to distribute their games this way, but it would still likely be less than the amount they’re making from RSNs now. However, the chance to affiliate with the ESPN brand might be highly alluring for some clubs.
Manfred’s Dream
MLB commissioner Rob Manfred wants to bring the game to a younger audience, and to do that he’d like to craft an in-market streaming service or RSN package carrying as many as 15 teams that the league would distribute itself. The service would need at least that many teams to become viable financially, and having the 11 clubs ostensibly about to be dropped by Diamond would be a good start.
Teams would have to buy into such a service, however, which would require them to share revenues. That’s a big reason that larger clubs like the New York Yankees would be extremely unlikely to join; they already make more money from their partner RSNs than they would ever get from joining a league-wide streaming service.
Back to Bally
The last option available to teams would be to try and stay with their current Bally Sports partner for at least one more year. The Los Angeles Angels are reportedly already seeking a restructured deal with Diamond, and other teams could follow in their wake.
Diamond has spent more than 18 months under Chapter 11 bankruptcy protections as it tries to reorganize itself into a viable business. But some teams still see the revenue they can get from Diamond as more attractive than OTA/streaming options, even if it comes in at 20% to 40% less than they’ve grown accustomed to making from a Bally Sports channel.
So What Will Clubs Do?
Ultimately, I think there will be more than just one team that tries to go back to a Bally Sports channel for 2025. Teams rely on the revenue they get from local TV deals to make up their payroll for the season, and some clubs with ambitions to sign a new high-dollar player won’t want to take the chance that they can’t afford to pay him because they’ve decided to go OTA or join Manfred’s league-wide streamer.
I also think some teams will decide to use this season as an experiment to see how good a return they can get by going OTA. If they like what they see, they can continue that way. If they don’t they can sign on with ESPN’s new streaming platform once it’s ready to roll in 2025 and try to boost revenues doing so.
Those are the two options I think will be pursued by the majority of teams whose rights are about to be let go by Diamond. A few will likely try to set up in-market streamers of their own, but there really isn’t much time to get such services up and running considering the 2025 MLB season is less than six months away.
Bally Sports+
Bally Sports+ is a direct-to-consumer streaming service that offers live games for those who want access to your local Bally Sports RSN without subscribing to a cable or satellite package.