MLB hopes to gain control of local broadcast deals
NEW YORK (AP) — Major League Baseball hopes to gain control of local broadcasting agreements involving its teams, the reason behind its bid to purchase regional sports networks from The Walt Disney Co.
Disney acquired 22 RSNs as part of its $71 billion purchase of 21st Century Fox’s entertainment business this month, and the Justice Department said last June that Disney had to sell the networks as a condition of the deal.
“There’s tremendous revenue disparity in our game, and I think that if we had more of a national model closer to where the NFL is it would solve a lot of those competitive issues for us, kind of level the playing field.” baseball Commissioner Rob Manfred said Wednesday.
“I think that all of the difficult issues for baseball, if you took that revenue disparity out of the picture, would be easier.”
The New York Yankees have a right of first refusal to buy back control of their YES Network and have arranged partners for their own deal. MLB wants to purchase the remaining networks.
“Strategically, it would be a very interesting move for us,” Manfred said during a breakfast at The Paley Center for Media.
“Our game has always had sort of a national broadcast component that’s come out of New York. But the bulk of our business has been local. And the idea of a central baseball having more control over local rights is one that’s really intriguing to us. If we do the transaction, we’ll do it on the theory that we will try to accumulate more.”
Leagues and teams are worried over the cord-cutting trend and how to react with the emergence of over-the-top digital streaming.
“You’re buying an ongoing RSN business, which generates really significant profits right now,” Manfred said. “I think everybody knows that it’s probably going to degrade over time as the cable model erodes.
“I think for us, we’d be prepared to live with that, run out of profitability and at the end of that runout, assuming it comes to some sort of a hard end, we would be in control of the content, which we fundamentally believe in, and we think that holding it as a lead better positions us to figure out exactly what that next distribution model is going to look like for the benefit of the league, as opposed to having some kind of private equity firm owning the RSNs.”