Could Cleveland Guardians benefit from shift to baseball's TV rights model?
With their monetary health at stake, Major League Baseball recently formed an economic reform committee, according to a report in The Athletic.
It’s not a surprising move given that baseball teams, 14 of which have local broadcast deals with the Diamond Sports Group’s Bally Sports regional sports networks, could take a significant hit in light of that company’s possible bankruptcy. Diamond recently missed an interest payment that triggered a 30-day grace period after which they are expected to hit bankruptcy court.
Lest anyone think Bally is the only regional sports network in this quagmire, do not. AT&T Sportsnet is also facing financial issues.
The current system, heavily reliant on what some view to be an antiquated cable model decimated by cord cutting, is on the verge of financial Armageddon. Because of that, MLB is proactively establishing this committee which apparently includes three owners – John Henry of the Boston Red Sox, Chris Illitch of the Detroit Tigers and the Colorado Rockies’ Dick Monfort.
“We got to find a new model,” MLB commissioner Rob Manfred said to The Athletic. “Maybe we ought to be driving the boat, what that model looks like. So, that’s the new challenge.”
That, however, isn’t it. Manfred is perfectly willing to open the conversation regarding the revenue disparity that plagues baseball in the broadcast realm. If there is an honest conversation, it’s a hierarchy of haves and have-nots who are able to spend and make money.
Although each team is guaranteed $100 million annually in TV revenue between national and local resources, that amount is multiplied for large market teams because their local TV contracts are much more substantial.
For example, the Los Angeles Dodgers has a deal that’s worth approximately $239 million per year, according to reports. The Guardians local revenue is worth $47-$52 million per year.
Any evolution of the current model could certainly benefit a team like the Guardians.
“We have businesses that are literally not similar in terms of the overall revenue that they’re generating,” Manfred said. “And to the extent that you could find a new distribution model that actually helped on that disparity side, that would be the daily double. So people are having conversations that haven’t been had in baseball, and it’s really been owners talking to owners, which is a good thing.”
This article originally appeared on Akron Beacon Journal: MLB willingness to explore TV issue could benefit Cleveland Guardians
