MLB may brush back Sinclair with its own streaming service
Major League Baseball is in talks to launch a nationwide video-streaming service that would enable fans to watch their teams’ hometown games without a cable-TV subscription, The Post has learned.
The web-based service — which could address a decades-old annoyance for baseball fans that some have partly blamed for the league’s steadily declining viewership — could launch as early as the 2023 season, a person with direct knowledge of the negotiations said.
The National Basketball Association and the National Hockey League are also considering partnering with MLB on the new streaming service, sources said. Insiders say subscription rates would vary by geographic market and could be between $10 and $20 a month — well below the monthly cost of most cable-TV packages, which can easily stretch past $100.
Since the 1990s, baseball fans have been largely beholden to cable TV to watch their local sports teams play at home, as the teams have sold the broadcast rights to so-called regional sports networks, or RSNs, which then charge cable and satellite-TV operators to air the games.
While the MLB wants to give fans the option to sidestep pricey cable packages, local games will still be broadcast on cable as they are now and the broadcasts would be identical, according to people familiar with the plans. The league’s MLB.TV service, which offers out-of-market games for a subscription fee, will also continue to operate, sources said.
Sources said MLB Commissioner Rob Manfred could end up offering cable-TV giants a piece of the streaming revenue to compensate for potential subscriber losses. Manfred’s pitch is that cable TV won’t lose many subscribers, as MLB is mainly targeting younger customers who have already cut the cord, sources said. The cable companies don’t have streaming rights but could retaliate by paying less to broadcast games if they don’t like the bargain, sources said.
As for the teams, MLB’s streaming service would pay them based on viewership in their local markets. One MLB owner said the league has kept its owners appraised, and believes it has general support though no vote has been taken. Indeed, the MLB and team owners are concerned over dire forecasts for viewership. Roughly half of Americans will not be watching cable or satellite TV within a few years, according to Pew Research Center annual surveys.
MLB viewership is down about 12 percent this year compared to the 2019 season, according to Sportsnaut. The 45 million fans who attended regular-season games in 2021 amounted to a 34 percent drop compared with two seasons ago. While the pandemic was largely to blame, it was the lowest number of fans in a full season since 1984.
The talks between MLB and the other parties are fluid and while terms are being negotiated, a deal is not yet close at hand, sources said.
Meanwhile, sources said Manfred could face still thornier negotiations with Sinclair Broadcast Group, the Maryland-based telecom giant that owns the digital broadcast rights to 14 of the league’s 30 baseball teams including the St. Louis Cardinals and Detroit Tigers.
“We believe those digital rights are crucial,” Manfred said last week at the CAA World Congress of Sports conference. “And we want to own and control the platform on which they’re delivered, we may have partners in that process.”
Manfred didn’t elaborate and an MLB spokesman declined to comment.
Both MLB and Sinclair have plausible legal claims to the hometown-game streaming rights. Nevertheless, insiders say MLB wants to launch its service independently of Sinclair’s Diamond Sports unit, which currently airs most of its MLB games through its Bally Sports-branded regional TV networks.
While Manfred’s plan looks ambitious, sources said recent troubles at Sinclair may give him a leg up in talks. As first reported by The Post, Sinclair in June tried to raise $250 million to launch its own video-streaming service, but cannot do so without MLB approval.
“I thought it was presumptuous for [Sinclair] to morph from a cable broadcast company to a streaming company,” said Greg Bouris, the sports management program director at Adelphi University and former communications director for the MLB Players Association.
At first, sources said Sinclair tried to persuade MLB to allow it to control the service for several years before handing the reins to MLB. But the league wasn’t having it, citing Sinclair’s financial condition and raising concerns that the company won’t be able to spend the money that’s needed for high-quality broadcasts, sources said.
In 2019, Sinclair’s Diamond Sports subsidiary paid $9.6 billion for the Fox Regional Sports Networks, since rebranded to Bally’s, giving it exclusive rights to the 14 MLB teams, 16 NBA teams, and 12 NHL teams. It borrowed a staggering $8 billion to fund the deal, sources said.
Since then, Dish, Hulu and YouTube TV have stopped carrying the Bally’s RSNs, even as revenue from existing distribution deals has been slammed by cord cutting and subscriber declines. An August Moody’s Investors Service report found that Sinclair “now has an unsustainable capital structure given its very high leverage and weak liquidity.”
In exchange for Sinclair backing its streaming plans, MLB is open to a proposal from Sinclair in which the league would cut the roughly $1 billion in annual fees Sinclair pays teams for cable broadcast rights, giving its Diamond unit more breathing room to refinance its loans before they mature in 2026, sources said.
MLB and Sinclair declined to comment. NY Post
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