After months of preparation for this show, Major League Baseball is taking over television broadcasts for one of its franchises in a rare but potentially industry-changing move that continues to expand the long-lucrative regional sports network model.
MLB and the San Diego Padres announced Wednesday morning that the league will take over production and distribution of all Padres games after Diamond Sports, which filed for bankruptcy in March, fell behind on rights payments to the club.
The change is immediate — starting with the Padres’ Wednesday night game in Miami — and the team and league prospects will be invisible to the average viewer. However, Bally Sports – owned by Diamond Sports, a subsidiary of Sinclair – could be the first of many moves to hold the local TV rights for 14 MLB clubs.
An overview of immediate and long-term problems:
‘Here to take control.’After three painful seasons, Boston’s Chris Sale is back
Follow each game. Latest MLB results and schedules
Where are Padres games broadcast?
MLB and the team announced that Padres games will be available on DirecTV, Spectrum, Cox Cable and Fubo, and will be available for streaming on MLB.TV for the first time. The league said it will expand the Padres’ reach from 1.13 million homes to 3.26 million homes in the team’s viewing area. Cox Cable has approximately 6 million customers and Spectrum has approximately 2.5 million customers in the market.
Will the broadcasts have a different sound?
Not particularly. Of course, Padres TV is under state control, but that doesn’t mean commissioner Rob Manfred will be on the mic. Play-by-play man Don Orsillo, commentator Mark Grant and reporter Bob Scalan will remain in their respective roles.
How did he get here?
Fox Sports was the dominant regional sports network brand — think Fox Sports North, Fox Sports West, Sun Sports, etc. — until The Walt Disney Company sold all of those holdings to Sinclair in August 2019 for more than $10 billion, as part of the mega-unit DC’s acquisition of Twenty-First Century Fox. However, 21 media marketing requests to destroy regional networks.
The Bally Sports brand was developed for 42 major sports franchises — 14 MLB, 16 NBA, 12 NHL — and retained much of the talent and production, making for a relatively seamless transition from the Fox Sports era. However, the debt load of 8 billion dollars Sinclair and the company that took in the diamond transaction sank; It filed for Chapter 11 bankruptcy protection in March, announcing a restructuring plan with its debtors.
But that puts dozens of sports franchises behind the line, which rake in billions of dollars in TV rights.
Will other MLB franchises meet the Padres’ fate?
Very likely. Diamond Sports has met the deadline to pay the rights fee to the Cincinnati Reds this month, keeping the club’s games at BallySports in Ohio.
But with the season in full swing and more than a dozen clubs facing millions of dollars in rights fees, it looks like a house of cards. The Reds, Texas Rangers, Minnesota Twins and Cleveland Cavaliers are among the nine teams that have missed out on the franchise this year. Diamond Sports has agreed to pay some of these clubs in exchange for direct-to-consumer release rights. But it is not clear how long Diamond Sports can meet these obligations.
Why do you suffer on the balance sheet?
Cord-cutting, for one. From 88% in 2010 to 66% this year, cable households have been shrinking significantly over the past 15 years, Statista said. Nearly 700,000 consumers will cut the cord in the third quarter of 2022 alone, a move that will significantly reduce the networks’ revenue, which depends on subscriber revenue.
ESPN recently waved the white flag with plans to develop a subscription-based streaming service.
Cord cutting has networks and leagues that have long relied on the RSN business model. It also begs the question of what Sinclair was thinking when he doubled down on this brutal industry.
Does this pave the way for streaming any MLB game anywhere?
Not necessarily — although San Diego does prove an interesting test market for what the future might look like. MLB will allow viewers in San Diego to stream Padres games on MLB.TV for $19.99 a month or $74.99 for the rest of the season — roughly the price of a season-long MLB TV subscription.
San Diego will then be the only market in which rights holders can register home broadcasts either continuously or via a cable package. Given the turmoil with Bally San Diego, it’s the least the league can do.
But it’s too early to call this a tipping point for the industry — because local TV contracts are so lucrative for the league and its teams. The Los Angeles Dodgers, for example, are in the midst of an $8.35 billion, 25-year deal with Time Warner Cable. The New York Yankees and Mets and the Boston Red Sox have large stakes in their own profitable networks.
That’s what Golden Goose teams will defend to the hilt — even if it does nothing to eradicate the existential threat of cord-cutting.
42 Do Bally’s sports franchises need to adapt?
could be. The Phoenix Suns and Mercury have already closed in on establishing their own direct-to-consumer distribution model, which new owner Matt Ishbia said “will now be accessible to millions more fans in Arizona and around the world.” That arrangement will last five years for the Suns and will allow fans to watch games “with or without a pay TV subscription.”
MLB, for now, takes it for granted that all Bally games are available. But the long-term solution is not so sure.
[ad_2]