MLB Commissioner Rob Manfred said the league needs more clarity on Diamond Sports’ financial situation. Marc Bryan-Brown
MLB is no closer to closing a streaming deal with Sinclair than it was a year ago, and that’s not good news for Bally Sports’ regional sports networks.
Late last year, the NHL renewed its agreement to allow Sinclair’s Diamond Sports, which runs the Bally Sports channels, to broadcast its games through a direct-to-consumer service. About a month later, the NBA followed suit with a deal of its own.
Baseball still hasn’t reached an agreement, and when I asked MLB Commissioner Rob Manfred why he was dragging, he corrected me.
“I don’t think of it as dragging our feet. I think of it as an effort,” Manfred said at the CAA World Sports Congress last week.
Manfred went on to describe a negotiation process that, in his view, was short and incomplete. According to Manfred, Diamond Sports executives told baseball that they had financial problems and wanted these additional broadcast rights.
Manfred said he asked Diamond to demonstrate how the additional streaming rights would solve the company’s financial problems.
“We never received a coherent answer to this, as our analysis suggested that what they were looking for from us would not solve their problems,” Manfred said. “Our reaction was, why attach additional rights to an entity that by its own admission has financial problems? We just think it’s a good business decision.”
Sinclair has the rights to broadcast the games of five MLB teams: Detroit Tigers, Kansas City Royals, Miami Marlins, Milwaukee Brewers and Tampa Bay Rays.
Manfred said these deals were recently made by clubs when their media rights came into being.
“If they felt it was necessary to give these rights away to get a deal, especially if there was no other bidder, then obviously we wouldn’t stand in the way of that,” Manfred said. “The rights of the other clubs we control and we are not willing to throw them into the pot of diamonds in the hope that it will make any difference in the absence of some business plan that convinced us that was the case.”
Manfred is not blind to the problems RSNs are facing, as they are beset by soaring rights rates combined with a declining subscriber base. He sees the traditional pay-TV package holding up, albeit with far fewer subscribers. “It’s the people who are outside the pack, the people who cut the cord, that we need to make sure we have adequate reach with this group. That’s my biggest concern,” he said.
One way to do this is to allow a company – whether “the current rights holder on the RSN or us” – to stream games alongside the traditional linear RSN.
Eric Shanks said the Fox package helped his original RSNs grow. Marc Bryan-Brown
Fox’s Shanks: No interest in RSN business
Fox Sports launched its RSN business in 1996. It eventually sold RSNs to Disney in 2018, when they were valued at over $20 billion. This may interest you : Best sports bars in Austin: Where to watch football games and more. Disney, in turn, sold them to Sinclair for $10.6 billion in 2019.
Fox was not interested in buying the RSNs back from Disney at a deep discount. And when I asked Fox Sports CEO and Executive Producer Eric Shanks if there was a price he would consider buying the RSNs back at, he just shook his head.
Says a lot that a company that managed RSNs for two decades has no interest in getting them back.
“We also knew what it took to get that value,” Shanks said. “We used a lot of leverage from Fox and a lot of right timing and right product in certain areas to get the value out of these RSNs.”
Shanks went on to talk about the Fox package — which included Fox News, the NFL and college football — that helped RSN’s business grow. Distributors weren’t buying RSNs individually. All of them were part of a package that included channels like Fox broadcast and Fox News that would be difficult for cable and satellite operators to abandon.
“On our own, we knew what would happen,” Shanks said.
We got a glimpse into the perils of the RSN world in 2016. That’s when Comcast launched YES Network in Connecticut and New Jersey for a full season.
The way YES Network managed to get back into the Comcast system at the time? Fox News’ deal with Comcast was ending in 2017, and Fox chose to let YES Network piggyback on its negotiations with Fox News.
Shanks didn’t address this onstage, but many of my sources say Comcast wouldn’t have struck a deal with YES Network without Fox News.
John Ourand can be reached at jourand@sportsbusinessjournal.com. Follow him on Twitter @Ourand_SBJ and read his weekly newsletter and listen to his weekly podcast.
