Major League Baseball (MLB) is facing a potential $1 billion loss in revenue if a cable television company fails to make payments for local broadcasting rights to 14 teams. MLB is now preparing to take over telecasts if the cable company, Diamond Sports Group, fails to make payments.
Sinclair Broadcast Group, the parent company of Diamond Sports Group, acquired 21 regional sports networks in 2019 from The Walt Disney Co. Sinclair also holds rights to 16 NBA teams and 12 NHL franchises. Teams fear in an era of cord-cutting they may not get payments from Diamond Sports Group, who operates the networks under the name Bally Sports.
MLB Commissioner Rob Manfred said, “Our No. 1 goal in terms of preparations is that if for some reason Diamond isn’t broadcasting, that we want to be in a position to make sure our fans are going to get their games.” Billy Chambers, who had been Sinclair’s chief financial offer, started work this month with MLB in a new position as executive vice president for local media.
The 14 teams whose local broadcasts are at risk are the Arizona Diamondbacks, Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, St. Louis Cardinals, San Diego Padres, Tampa Bay Rays and Texas Rangers.
In addition to the revenue risk, Manfred and the owners discussed the A’s search for a new ballpark. Manfred said he views the Athletics’ search for a new ballpark as “Oakland and/or Las Vegas.” The team needs to have an agreement in place by next January.
The Rays announced plans on Jan. 30 to build a ballpark near Tropicana Field in St. Petersburg. The team has been searching for a new stadium for 15 years, and owner Stu Sternberg says the Rays can’t afford to stay in their current ballpark when their lease expires after the 2027 season.
The rule to start extra innings with a runner on second was adopted as a pandemic measure for the 2020 season and appears likely to stay. Manfred said the teams discussed the permanence of the rule and it will go back to the on-field committee.
The owners also discussed revenue disparity, which is not unrelated to the local media issues. MLB had $10.8 billion in revenue last year. Some teams have become alarmed the New York Mets, entering their third season under owner Steve Cohen, have increased payroll to about $370 million.
San Francisco chairman Greg Johnson replaced Colorado chairman Dick Montfort and Cleveland chairman Paul Dolan replaced Boston principal owner John Henry on the executive council. The council also includes Los Angeles Dodgers chairman Mark Walter and Detroit Tigers chairman Christopher Ilitch (whose terms expire in 2024); Philadelphia managing partner John Middleton and Kansas City chairman John Sherman (2025) and Arizona managing general partner Ken Kendrick and Seattle chairman John Stanton (2026).
MLB is facing a financial crisis with the potential of a $1 billion loss in revenue if Diamond Sports Group fails to make payments. MLB is now preparing to take over telecasts if the cable company fails to make payments. The owners discussed the potential of revenue disparity and the search for new ballparks, as well as the rule to start extra innings with a runner on second. It is clear that MLB is taking these issues seriously, and fans can expect to see changes in the near future.
