Fri. Mar 22nd, 2019

MLB Considers Bidding on Fox RSNs

Major League Baseball commissioner Rob Manfred recently sat down for an interview with the JohnWallStreet blog. He was asked his opinions on Disney’s sale of the 22 regional sports networks it acquired from Fox. His answer is raising a few eyebrows in the sports media world.

JWS: The Yankees are going to re-acquire control of the YES Network. The Cubs have discussed doing the same in 2020. Does MLB want its teams to control their broadcast rights? Does the league care who ends up buying the other 21 Fox RSNs?

Manfred: We’re very interested in the RSN sale process and have preferences in terms of who the owners are going to be. Candidly, we’re looking at the RSNs ourselves.

JWS: MLB renewed its media rights partnership with Fox Sports (includes World Series), with a +39% increase in value 3 years early. As teams’ current deals expire, would you expect local broadcast rights to grow at a similar rate?

Manfred: Yeah, I think that content is going to continue to increase in value as we move forward. It may be different bidders, different companies that are involved, but I think the most important point is that content has durable value.

The obvious questions are 1) “Who does MLB prefer own the RSNs?” and 2) “What would it take for MLB to make a bid of their own?”.

Does Manfred have concerns over streaming rights and how an Amazon take over of those regional sports networks could effect the future of MLB.TV? Does the Major League Baseball office fear what an association with the heavily scrutinized Sinclair Media Group would do for its brand image? There is no real way to know those answers without Manfred saying who he prefers win the bidding and why, so let’s instead talk about the idea of Major League Baseball bidding for those networks.

There are plenty of cost factors to consider. Not only would a new bidder likely drive up the price, but there would be a whole new set of production costs the league and its teams would be responsible for. There is also the question of what exactly MLB wants to buy. If the Yankees want to reacquire the controlling interest in the YES Network, would that be part of this deal or would YES exist outside of this deal?

There are advantages too, particularly in the streaming world. Awful Announcing‘s Andrew Bucholtz points out that “it would make it a lot easier to do cross-RSN initiatives, such as in-market streaming, and would also give the league a whole lot of control over over-the-top options; if MLB controls both the local rights and the national rights, that could potentially allow for subscription levels that ignore in-market blackouts.”

Another question worth asking is how would acquiring 22 regional networks effect the MLB Network. Surely the league wouldn’t want to create a scenario where they own two networks in a market that are essentially simulcasts of each other.

These questions may be a lot of consternation over nothing. Although the first round of bidding is over, it is still not entirely impossible that Fox or Comcast don’t find a way into the bidding in the second round. Surely groups that MLB already has working relationships with would ease Manfred’s mind and reduce the league’s desire to make a bid. This could also be posturing to make sure whoever wins the bidding is prepared to treat the league’s teams the way they feel they deserve to be treated.