An interesting thing transpired this week out in the San Diego market. Major League Baseball teams here in the US have traditionally relied on local networks to broadcast the majority of their games to the fans in the team’s region of the country. So, for example, I live in the NYC metro area so the Yankees and the Mets are broadcast locally via YES and SNY respectively – cable networks partially or fully owned by the teams themselves. Out in San Diego, where the Padres play, the broadcaster Diamond Sports Group (who operates as Bally Sports) a few weeks ago failed to pay the licensing fee to broadcast Padres games. Once the grace period to pay the fee expired, Diamond Sports Group effectively, and apparently willingly, broke their contract and rescinded their rights to broadcast Padres games.
Diamond, the Sinclair subsidiary that operates under the name Bally Sports, skipped its payment to the Padres a couple of weeks ago and had until the end of its grace period on Tuesday to make the team whole and maintain their long-term agreement. Choosing not to meant Tuesday’s game against the Miami Marlins was the last Padres game under the Bally Sports umbrella. Moving forward — starting Wednesday, continuing through the end of the season and resuming in perpetuity — MLB will air Padres games through its streaming service and on different cable channels.
MLB will provide Padres games through its MLB.TV app for free through Sunday. After that, in-market fans can continue to stream games for $19.99 a month or $74.99 for the rest of the regular season on MLB.com and Padres.com (postseason games air on national platforms). Through this process, Padres games will no longer be subject to blackouts. Local fans can also watch Padres games through a variety of cable providers — AT&T U-Verse, DirecTV, Cox and Spectrum — on a different channel. fuboTV will also continue to air Padres games through its platform.
In a release issued late Tuesday night, MLB stated that the new approach would increase the Padres’ reach from 1.13 million to about 3.2 million homes within the team’s TV territory.Alden Gonzalez, ESPN
What we are seeing here is the the first crack in the local/regional sports broadcasting ecosystem as a result of the rampant “cord cutting” that is happening around the country and the world. The significance of this can not be understated. We may very well see a few more teams/regional networks suffer the same fate and that will mean that the league(s) will start to take over “local” broadcasting services. The economic implications on the league will be very interesting to watch as the sky high valuations of many MLB teams have historically been tied to the value of the regional sports networks that the individual franchises have huge stakes in. If those broadcast rights shift to the leagues, how does that impact the individual teams, especially if the streaming subscription dollars do not add up to the ‘per household’ fees traditionally paid through cable packages?
Another interesting element this highlights and also brings into focus is one that has been around forever – the fact that not all fans of said teams are located in that region of the country. I am a displaced New Englander who lives in the NYC metro area. For as long as I have lived here, the only way I have been able to watch the Red Sox on broadcast or cable TV has been if the Red Sox were playing the Yankees or Mets (or the Braves on TBS), or if they were being broadcast nationally (regular season and/or playoffs).
If I wanted to be able to see all the games of my favorite teams – basically to mimic what I would be able to watch if I was living in New England – I’d have to subscribe to ‘league pass’ services from the NFL, MLB, NBA, NHL and drop an additional $750/year. And that’s not even counting if I’m a soccer fan where an MLS subscription would be another $100 via the new Apple TV+ deal or that the English Premier League has many games broadcast on NBC’s Peacock premium streaming service.
If I wanted to be able to see all the games of my favorite teams – basically to mimic what I would be able to watch if I was living in New England – I’d have to subscribe to ‘league pass’ services from the NFL, MLB, NBA, NHL and drop an additional $750/year. And that’s not even counting if I’m a soccer fan where an MLS subscription would be another $100 via the new Apple TV+ deal or that the English Premier League has many games broadcast on NBC’s Peacock premium streaming service. Or, I could just move back to the New England region.