MLB Inks Deal with FOX to Stream In-Market Games, but Don’t Get Too Excited Just Yet
The most-read article in Cubs Insider’s brief history was my look at MLB’s blackout policies, complete with the (goofy) map of market coverage and a look at how to watch Cubs games being carried by local stations. The viewers didn’t come because I had crafted some masterwork, but because there are Cubs fans everywhere who couldn’t figure out how to watch their team. In my post, I included an email to and response from MLB.tv support regarding their coverage and how to “fix” it.
I suggested team-specific coverage or the ability to purchase individual games on a PPV basis, though the response I got was anything but helpful. There are obviously all sorts of issues at play here, not the least of which is the broadcast and advertising agreements in place with local stations. MLB streaming in-market games would erode the revenues of those local and national broadcast partners, thus causing friction in those relationships, if not outright litigation. But there is hope for change.
Rob Manfred’s announcement on Thursday at the quarterly owners meetings in Dallas that MLB had reached a deal with FOX to provide live streaming of in-market games was a big step in the right direction. However, it’s far from all-encompassing. The deal only impacts 15 teams (the Cubs and White Sox aren’t among them) and doesn’t help those fans who have “cut the cord” and turned away from cable/satellite TV.
The dream for fans would be to simply log on via their computer/tablet/phone and access their team’s games without the need to be at home or to pay for a cable package they don’t need. But since this deal really only helps those who can verify that they’ve got access to one of the included FOX regional networks. Furthermore, this deal does not extend to MLB.tv Premium, so don’t expect to find the Cubs there.
So what this really amounts to is simply that fans in the impacted markets can now watch games from their devices when they’re away from home and are without access to a TV, or when they’re in an area that doesn’t have their particular network (perhaps at the home of a friend who said goodbye to cable). It’s certainly not the perfect solution for all fans, but it’s better than what we’ve got now.
And just in case you were thinking MLB was getting a little altruistic here, consider that the league stands to reap a significant windfall from this new pact. As Maury Brown reported in Forbes:
Overall, bringing in-market games to fans marks another revenue stream for MLB to tap. Out-of-market games have been available via MLB Extra Innings for television and MLB.TV, but in-market is seen as the true cash cow given fans interest in their local teams. In terms of the financial impact to MLB, as reported prior by the SportsBusiness Journal, the league will pull in approx. 4% additional revenue of each club’s overall media deal. To put that in context, using just the recent 20-year, $1.5 billion FS Arizona deal with the Diamondbacks, an additional $3 million annually will come in from FOX, or around $9 million over the life of the 3-year in-market streaming deal.
Okay, so $9 million seems like a pittance, but keep in mind that that’s only one team. Not all 15 included markets have such lucrative deals, but I’ll hazard a guess that MLB will pull in $20-30 million annually from this streaming agreement. And one has to think MLB has approached other regional sports networks (CSN, MASN, NESN) to gauge their interest in similar deals.
But where does this put the Cubs, particularly in light of the recently-announced network they plan to launch in 2020? With an in-market reach that already expands well beyond the reach of either Chicagoland channels or Comcast SportsNet Chicago and a dedicated fanbase that stretches even farther, the Cubs — perhaps more than any other team in baseball — could benefit greatly from a streaming service.
One has to assume a streaming service would go hand-in-hand with the television network, but what happens in the intervening years? The Cubs have done a pretty good job of leveraging any revenue stream possible, so any opportunity to add to the flow (can you tie a legacy sponsor to the streaming service?) is something they’re going to look at.
Thursday’s announcement was a welcome one, but it’s far from a solution for fans trying to watch their team(s) in this changing landscape of media consumption. The fact that this is only a three-year deal, however, opens the door to bigger and better things to come. So I applaud MLB for getting this right and I look forward to them getting it righter.