Weekly Column: Sports Franchises Benefit from Controlling Media Rights

In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about the changes Major League Baseball (MLB) needs to make to further its television production needs to increase viewership.

You can read the full column below.

There was time when sports franchises sought to sell their media rights (television, radio, and/or streaming) to a third party business(es) that could leverage the on-the-field content. The exchange was fairly simple: Team A licenses their copyright of broadcasting the team and its trademarks to Company B for a fee, specified length of time, and certain distribution rights, that are outlined in a contract. However, once cable subscriptions began to falter, the regional sports network (RSN) model that once dominated professional sports began to lose eyeballs and money.

As a result, sports franchises began look inward for production partners and channels specific to their team. The result was the Los Angeles Dodgers move from Fox Sports West to Spectrum’s SportsNet LA and the Texas Rangers looking to build something similar with the recent announcement of Sinclair-owned Diamond going through Chapter 11 bankruptcy proceedings. The Houston Astros and Rockets similarly want to build a new network or sell to a large streamer. The success of WGN (Chicago Cubs) and TBS (Atlanta Braves) are also good examples of national broadcast partners for a local team. Diamond’s move to Chapter 11 bankruptcy has led sports franchises to question the longevity of regional sports networks even if staying the course for the immediate future is a viable option. For context, Diamond has nineteen “Bally Sports” branded RSNs that control the media rights to forty-two professional franchises mixed about evenly across MLB, NBA, and NHL teams.

Diamond’s financial instability has sparked the interest of Major League Baseball. The League office has stated publicly that they are in position to take over the distribution of struggling RSNs if the teams wish to do so (the teams control the rights versus the league as in the NFL). In fact, the League has been preparing the move towards internal and national distribution for many years. The first sight of this move was when MLB spun-off BAMTech into a subsidiary to license to outside parties to pursue streaming opportunities, particularly with Disney-owned platforms like ESPN+ and Hulu in 2015. Disney now owns at least 75% of BAMTech. However, MLB Advanced Media (MLBAM) has been around since 2000 and is the digital media arm of Major League Baseball, focused on providing streaming video technology, particularly for over-the-top content services.

As Disney-owned ESPN looks to layoff 7,000 employees and reduce $5.5 billion in costs, it might be high time again for MLB and it franchises to look to internal distribution on team-owned networks with partnerships on streamers for a select amount of games. However, it is also conceivable to see MLB sell a host of games to one platform like Apple, Prime, or another platform, and good place to start would be the faltering RSNs, while purchasing or rounding up additional team rights as they become available. MLB and teams have the technology and expertise now to be their own broadcasters.

The possibilities could be endless for team controlled platforms or some national broadcasts. For one, games are shorter now because of the rule changes making MLB content more palatable to younger audiences. Second, teams need to take advantage of podcast channels devoted exclusively to the team much like radio or satellite stations have done. Third, AI-generated technology could assist with broadcasting, analytics, and production.

There is clearly an interest in baseball globally as proven by the record-breaking attendance and viewership numbers for the 2023 World Baseball Classic. On the other hand, college sports are benefiting significantly from conference television deals with the University of Texas at Austin, University of Oklahoma, UCLA, and USC have all left their home conferences for the Big Ten and SEC for more money and exposure. The viewership numbers of the 2023 March Madness Tournament is further proof of the on-going success of college sports on television. Major League Baseball will need to make a move to keep up with the changing landscape and thrive in the digital age. A changing a landscape that includes further real estate and television production development.

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.