Next TV writers Daniel Frankel and David Bloom ask that you when you call them "irrelevant," you address them as "Mr. Irrelevant." 

DANIEL FRANKEL: Hello David. Hope this Friday before Super Bowl Sunday sees you well. (It is looking for you. And it will find you.) So I was reading our somewhat surprisingly normalized summary of Tucker Carlson interviewing Vladimir Putin in our sibling pub, Broadcasting & Cable, and it occurred to me: What would the media reaction have been in, say 1984, with Ronald Reagan as president, if an unemployed, highly polarizing American journalist on the far left had given an outright propaganda platform to then Soviet Union premiere Yuri Andropov? 

You can see the full interview on Twitter/X here:

 I don't think we would have tolerated it in the same way. Sure, Carlson was clearly humiliated by the highly trained former KGB operative. And CNN and a number of other outlets rightly called Carlson out for being the clown he is. My job depends on the First Amendment. But I'm not so sure I want these rights extended to supporting foreign dictators who threaten us with nuclear annihilation. And we can rave all we want about the democratization of media by the internet, but I don't see how any good to our shared national interest comes from bad decisions like this one. 

DAVID BLOOM: Tucker has shown ample poor judgment in his career, and this is only the latest egregious example. Your Andropov hypothetical is apt, though, given that he also was ex-KGB and mired in a disastrous swamp fight against a neighboring country (Afghanistan). At least Andropov had the common courtesy to drop dead after two years in the top spot. Would that we could be so lucky with Putin. But I think the modest outcry over Carlson’s interview may be more a measure of how far he’s fallen in the media power lists, and perhaps just how fractured everything is. It lands in a very small pond with very high banks. Like a lot of ex-Fox famous, Tucker will have a lingering  following, but I doubt he’ll ever again MATTER. It’s possible that many people whose names don’t rhyme with Dump realize anything coming from a former KGB ops guy should probably be sharply discounted. I’m more concerned by those on the right who see Russia as somehow sympathetic in all this, not that different than the fascist-friendly American right-wingers of the 1930s, who at least could say they needed a powerful ideological counterbalance to communism. 

Russia is counterbalance to what? Democracy? Common decency? Non-murderous interactions with neighbors? The audience that is sympathetic to Putin’s concerns is, of course, Tuckster’s, too. But never mind that little sideshow. Let’s talk about big juicy stuff, like that three-headed Hulu for Sports that Disney, Fox and Warner Bros. Discovery revealed this week. Apparently, they didn’t even tell their sports league partners it was coming. I find that remarkable. What’s your guess about the service’s likely impact, whenever it launches, at whatever price? Brilliant play for relevance? Coup de grace for the tattered cable and broadcast business? More complications for customers? Giant nothing burger? 

Also read: Why ‘Re-Bundling Has To Happen’: Breaking Down the New ESPN, TNT Sports and Fox Sports Streaming JV

FRANKEL: Access to live sports channels is the primary driver of the virtual MVPD business. Why cede that business to Google? I thought it was no coincidence that they announced it on the same day that YouTube chief Neal Mohan disclosed the 8 million subscriber figure for YouTube TV. Everybody is talking about cord-cutting, but there's nothing retrograde about YouTube TV's business -- it's added 3 million subscribers over the last 18 months as the major pay TV  incumbents, notably Comcast and DirecTV, have shed at least 6 million of their own. 

There will be a big segment of the market still using linear channels to watch live sports in, say, 2028. I don't think Bob Iger, Lachlan Murdoch and David Zaslav want to be in the position of, say, paying $110 billion to the NFL and another $75 billion to the NBA, then having to rely on Google to reach their audience. Plus, as revealed by the NFL's latest deal -- it's now going to put a playoff game on Amazon Prime Video next season -- the leagues want to stream. Another reason: Unless you were, say, incarcerated in federal prison and you somehow missed it, the same companies were involved with Hulu, which you'd have to consider to be a highly successful streaming joint venture, with nearly 50 million subscribers across tiers. (Technically, Hulu is still a JV until Comcast is fully divested.) Separately but relatedly, I was right about Rob Manfred -- he was never going along with the big Amazon-backed Bally Sports restructuring. He told MLB league owners this week he wants to start his own local team access streaming service. Can he get 14 teams to go along with his plan?

BLOOM: Manfred can want what he wants, but those baseball owners are often pretty indifferent to preferences of the commissioner of the moment, especially when it comes to control over local TV rights. So we’ll see if Manfred can cobble together enough support, and enough scale, to matter.  Amazon is in learning mode this year with its Bally stake, so 2025, when decision-making looms, may be a very different landscape. Late-arriving news of that Amazon playoff stream is another example of the accelerating shift to online. Big chunks of the dam protecting linear assets are starting to give way aprés le deluge. 

FRANKEL: As we discuss how much power that live sports wields over the video entertainment business on Super Bowl weekend, I gotta confess that it has tickled me to watch the movie fanboy bloggers go back and forth about Coyote vs. Acme, the latest film that Zaz and Weeds want to take to the Train Station for tax and residuals breaks. A report surfaced late last week that the filmmakers have been unsuccessful finding a new home for the animated feature, and Warners is about to call "time" on it and pull the plug. 

On one side you've got this sort of natural coalescence of artistic freedom fighters, who are genuinely bereaved that the vastly dogmatic nature of federal tax law can so completely muzzle artistic expression. But there's also this small subset of this geeky social internet fanboy population who went around last week lecturing all of us about how "it's all just a business." As if they haven't passionately argued on the other side a million times. (I'm not giving them the specific attention they so desperately crave with a link.) All the while, the broader film industry grows more and more marginalized from all sides, it's very narrative format perhaps facing existential threat this time, as live sports grows more powerful. Truly a concert on the deck of the Titanic moment. 

BLOOM: I’m not super fussed about the on-again, off-again fate of Coyote vs. Acme, though I always appreciate the chance to watch Wile E. Coyote take an anvil to the head.

These cancellations come back to two issues: 1) they were made in a different era, under different budgetary and production considerations. That era is emphatically over. The cost of releasing expensive projects such as CvA into a crippled theatrical window is substantial, with fading prospects for cost recoupment. Should they release anyway, regardless of the likely outcome? What makes more sense. And 2), I know you can rhapsodize about the art of cinema in dark rooms with strangers, like someone who just won a Golden Globe and is sucking up to Oscar voters. But the business side has mattered since a bunch of patent dodgers left Thomas Edison’s New Jersey backyard to get a fresh, enforcement-free start in sunny Los Angeles. I also might advise against getting too misty-eyed over cancelled Batgirl and Looney Tunes projects, of uncertain artistic achievement. Maybe they really do suck. It just seems like an odd hill for you and even for fans to die on, however. 

FRANKEL: Speaking of men who have effectively branded themselves as wise video business pundits, I see that 10 years after he "coined" the phrase "Peak TV," John Landgraf has declared us, er, peaked. Now I've written about this before three years ago -- John stole the term from me! ... after I ripped it off from Peter Kafka. Fascinating read, if you like to hear reporters whining about vast cosmic injustices. I keep bringing it up because I'm just so astounded at how much mileage ol' J.L. has gotten out of that term. And speaking of efficiencies, how about Netflix's "We Are the World" documentary, "The Greatest Night in Pop." How much did it cost for them to make that? A cup of coffee for Lionel Ritchie? And the thing is their No. 1 movie. Why ever give your buddies the Russo Bros. $200 million ever again?

Also read: ‘Gray Man’ Co-Director Joe Russo: ‘$200M at Netflix Is Different from $200M at, Say, Disney’

BLOOM: Well, the difference between you/the esteemed Mr. Kafka and John Landgraf is that he not only commissioned a team year after year to carefully document and detail the decade-long rise and collapse of Peak TV, he commissioned some of Peak TV’s peak moments. Some of them didn’t last very long (RIP, Reservation Dogs), but he regularly injected real quality and craft into a bunch of basic cable shows with modest budgets. So, perhaps you can cede this patch of bragging rights to one who made that era cool. 

Now, your second point is deeply connected to your first. Why indeed spend $200 million when you can stitch together a music documentary from 30-year-old videotape? Except, as Netflix execs point out, they need both. The Gray Man was an attempt to launch a new franchise, a series of movies built around one of the world’s biggest stars, a dead-in-the-eyes Ryan Gosling before he got all Ken-fused. It debuted in 2022, in Peak TV’s last days as the impacts of the Great Netflix Reset ricocheted around the industry. Now the Russos are attempting the same thing for Amazon, with Citadel, The Electric State and another untitled project on tap. 

Also read: Yes, We Can Now Safely Call Amazon's Russo Bros. Spy Thriller 'Citadel' a $300 Million Disaster

Even as we shift to streaming’s version of cable TV/theatrical releases, you still need big four-quadrant crowd pleasers that attract a mass audience, not just twee indie pics for those film fanboys to whom you so lovingly alluded. Actually, as these companies stretch across the globe, stuff that travels well is more important than ever. It’s worth noting that Disney is still spending on big shows, if more carefully than in the past. This past week, Bob Iger pushed the chips onto the table for streaming rights to Taylor Swift’s concert movie (she’s also going to direct another project for them). The reported price was $75 million, an eye-popper for a music doc, but sufficient to fend off Netflix and other suitors. Once again, I’m reminded it’s Taylor Swift’s multiverse and we only inhabit a few tiny corners of it. 

BLOOM: Iger had a rough start, even acknowledging the problems (which he helped create in his storied first run) were more intractable than he thought. Turns out his magic CEO wand couldn't make everything immediately better. 

Also read: Cost-Cutting Gives Disney an Earnings Boost in Quarter

But the onslaught of announcements around earnings (and the actual earnings) defanged any shareholder pitch Nelson Peltz or Blackwells might plausibly make and definitively re-orients Disney toward a very different future. NüDisney will focus on parks and live experiences and an integrated, coherent streaming strategy. Its battered linear properties are being led to the ice flow. Disney's other big cash cow, ESPN, is publicly positioning for the big streaming changeover. And importantly to me, Iger finally fixed  (probably) his biggest blind spot, with that $1.5 billion Epic investment and the Disney-Fortnite immersive world. That’s a great start (along with the Apple Vision Pro-Disney Plus deal) on Disney’s immersive future. For the Super Bowl, I’ll prognosticate purely as a Missouri boy who grew up about 110 miles from Walt Disney’s hometown. I’ll say 24-21, Kansas City, but acknowledge that’s my heart speaking. Maybe it’ll fuel a new Taylor Swift song. 

FRANKEL: You win, Missouri Boy. Right down the point differential, D Money. Nice call. Serves me right for betting against Patrick Mahomes ... and Taylor Swift. 

BLOOM: Oh, and add this: I see rising viewership, too. Maybe it's the Swift bump, but the NFL will be delighted to his 118 million viewers this year. 

Major League Baseball Commissioner Rob Manfred told team owners this week in meetings in Orlando, Fla. that he wants to launch a league-owned direct-to-consumer streaming service in time for the 2025 pro baseball season. 

“Realistically, my target to having a digital package I can take to market would be for the ’25 season,” said Manfred, who was quoted by The Athletic. 

To pull it off, Manfred believes he needs the streaming rights to around half of MLB's 30 clubs. “I think you need to be in the 14 and growing mode,” he added.

For years, the league's MLB.tv platform has let fans stream out-of-market games. But to follow their local teams' games on TV, they've had to subscribe to a pay TV operator that has their club's affiliated regional sports network. 

Also read: Everything You Need To Know About the Bally Sports Bankruptcy

Manfred's plan would seem throw a curveball at bankrupt Diamond Sports Group, and its recently filed restructuring plan, aided by a $115 million investment from Amazon, to keep the Bally Sports regional sports networks out of liquidation. 

The disclosure of Manfred's plan isn't entirely surprising, given his acrimony for Diamond's parent company, Sinclair Broadcasting Group, and its executive chairman, David Smith.

What Happens After 2024?

Last week, Diamond announced in a court filing that, through mediation, it had reached agreements with the Texas Rangers, Minnesota Twins and Cleveland Guardians to show their games on linear TV via Bally Sports channels through the 2024 MLB season. 

With these deals, Diamond has locked up linear and DTC rights for all of its Bally Sports-affiliated NBA and NHL teams through the remainder of the ongoing pro basketball and hockey seasons. It also has linear rights for 12 MLB teams -- and additional DTC rights for five of that dozen -- for the 2024 MLB campaign. 

So what happens after the MLB regular season ends in September?

As part of its ongoing quest to secure rights to live sporting events for Amazon Prime Video, Amazon invested $115 million in Diamond's restructuring, hoping to gain access to local MLB TV rights in 2024 and beyond. 

'Hats Off to Amazon'

At the Orlando owners meetings, Manfred seemed to indicate that MLB wasn't involved in the discussions between Amazon and Diamond. 

“Hats off to Amazon,” Manfred said Thursday (again, per The Athletic). “I think they, for them, made a really interesting deal. They essentially have — from now, until the time that there is a plan that is approved [by the court] that allows Diamond to exit bankruptcy — an option to try to figure out if they can acquire digital rights that would be enough to make a viable product. If they do that, I suspect they put the $100 million in. If they don’t, I suspect they don’t.

“A free option is a great thing if you can get it," Manfred added. 

What Teams Would Be in MLB's Package?

To date, Diamond has only secured DTC streaming rights for only five MLB clubs -- the Detroit Tigers, Kansas City Royals, Florida Marlins, Milwaukee Brewers and Tampa Bay Rays.

MLB currently oversees local distribution, including DTC streaming, for the San Diego Padres and Arizona Diamondbacks, which were both cut loose from Bally Sports during the 2023 season when the clubs wouldn't agree to Diamond's restructuring terms. 

MLB also controls the local sports TV destiny for the Colorado Rockies. That team's RSN shuttered last year when owner Warner Bros. Discovery decided to exit the regional sports channel business. 

Beyond those three teams, Manfred and MLB will have to find 11 more clubs willing to gamble that the league's DTC platform can outperform whatever local-sports TV arrangement they already have in place. 

There's Also the Big Sports Streaming JV to Consider

While he ponders the local TV future of his teams, Manfred also responded to the big announcement this week from Disney, Fox and Warner Bros. Discovery that they're pooling their linear sports channels in new virtual MVPD offering. 

Manfred said MLB wasn't given a heads-up about the deal ... but that's OK.

“I see that development as positive,” he said. “I think it is another place that’s going to need to buy rights in order to make the platform go, and compelling, and I think it’s good to have another buyer. I think it’s particularly good for us — you think about it, it’s our three biggest partners, right? All positive.”

Speaking to the Baseball Writers Association in Seattle on Tuesday, Major League Baseball Commissioner Rob Manfred said the league's 13 teams under the Bally Sports regional sports networks umbrella have received most of their owed local TV rights fees from Bally's bankrupt operator, Diamond Sports Group. 

“Of the rights fees that have come due, I think we’ve collected 94% of those rights fees so far. And that’s really important,” said Manfred, in Seattle to witness the MLB's annual All Star Game and surrounding events. The event was covered by Associated Press. 

“We have backstopped clubs to make sure that there isn’t some unforeseen alteration in their revenue, and all that’s designed to put clubs in a position to not have disruption when it comes to the most important side of their business, that is putting a good team on the field," the Commissioner added. 

Diamond, a subsidiary of Sinclair Broadcast Group, is currently in bankruptcy restructuring trying to shed $8 billion in debt tied to Sinclair's ill-fated 2019 purchase of 19 erstwhile Fox SportNet channels, later rebranded as Bally Sports. 

Diamond is using the leverage provided by Chapter 11 to try to force teams with money-losing contracts to lower their contracted linear TV rights fees and also surrender their DTC streaming rights for not additional cost. 

Bankruptcy restructuring allows Diamond to simply walk away from these contracts. 

So far, only one Bally Sports constituent, has been banished from the Bally Sports kingdom for failing to agree to these terms, the San Diego Padres. 

MLB has worked with the Padres to re-establish their presence on linear pay TV. Manfred said distribution of the new Padres linear channel was "well into the five figures." 

The team had been taking in $60 million a season via its Bally Sports contract, and it's unlikely that the MLB's new TV arrangement is compensating for that. 

League owners have expressed their willingness to "backstop" the Padres and any other Bally Sports MLB dissonant clubs only for this current season. 

Diamond is still negotiating with other teams, including the Arizona Diamondbacks and Cincinnati Reds, to keep them in the Bally Sports fold. 

Manfred said the league is ready to step in and help those clubs get their games on TV should those negotiations go south. 

“Well before the Diamond bankruptcy, we were kind of on the topic of that part of the media landscape changing,” he said. “Our goal from the beginning has been to make a transition from the current situation into a new model that did two things, number one, increase the availability of our games to fans, and number two, to minimize any financial disruption for clubs.”

Major League Baseball is prepared to step in and block a renegotiated carriage deal between Sinclair’s bankrupt regional sports networks subsidiary, Diamond Sports Group, and the Arizona Diamondbacks. 

As thoroughly reported Tuesday by the New York Post, under new terms negotiated under the framework of Diamond's Chapter 11 restructuring, the Arizona club would agree to tear up the 20-year, $1.5 billion deal it signed for its linear local TV rights back in 2015 and accept a new pact valued at 20% less per season for five years. It adds up to a haircut of around $15 million per season. 

And in a development that surely irked MLB commissioner Rob Manfred, the Diamondbacks would surrender their direct-to-consumer rights to Diamond for the Bally Sports Plus streaming service. 

Manfred, who has also spoken ruefully about his dealings with Sinclair executive chairman David Smith in the past, has been adamant about MLB teams under the Bally Sports regional sports networks umbrella not giving up their DTC streaming rights. MLB has its own plan to launch a national DTC streaming service. 

Diamond and the Diamondbacks are set to present the renegotiated deal to the Houston bankruptcy court overseeing the subsidiary's restructuring on July 17. But according to the Post, Manfred is ready to block the Diamondbacks' deal. 

And with Diamond also using the flexibility and leverage that comes with bankruptcy restructuring to reset club deals it’s losing money on — cue Yakov Smirnoff's signature phrase here — Manfred could find himself similarly intervening on other proposed rearrangements with MLB clubs including the Cleveland Guardians and Cincinnati Reds. 

As the Post reports, he might not have backing from MLB owners. 

Diamond has already torn up the contract of one Bally Sports tenant, the San Diego Padres, after it failed to reach renegotiated terms with the team in May. 

The Padres quickly launched a new linear pay TV channel on DirecTV and other pay TV platforms in the San Diego region, and the league is streaming their games on DTC-serviced MLB.tv. 

But closing the sizable chasm needed to make the Padres whole on their lost $60 million a season Bally Sports San Diego deal falls on other, better-situated MLB teams. 

“I’m not paying past one year,” one MLB owner told The Post. “I don’t believe Rob will reject the Arizona deal. I think it’s a complete bluff."

Diamond filed for bankruptcy in March, looking to shed around $8 billion in debt. This debt was incurred in 2019, when parent company Sinclair paid $10.6 billion for 19 Fox Sports Net local sports channels, beating out a bid from MLB.

Those channels were spinning off margins in excess of 50% at the time. But due to cord-cutting and increased local sports TV rights costs, the average margin for Bally Sports channels has been reduced to less than 15%.

Diamond is now trying to renegotiate contracts among its 42 MLB, National Basketball Association and National Hockey League constituents for which it is losing money. 

Diamond's other goal: eight of the remaining 13 MLB teams in the Bally Sports portfolio haven't given up their DTC rights for Bally Sports Plus, and Diamond wants to fix that, too.

As the Post also reported, MLB’s owners collectively offered over the spring to buy Diamond for $350 million including the estimated $175 million the subsidiary had on its balance sheet at the time. 

A day after Sinclair Broadcast Group’s regional sports network subsidiary, Diamond Sports Group, made the bombshell decision to simply walk away from a billion-dollar contract with a Major League Baseball franchise, top executives and lawyers for the company appeared in a Texas bankruptcy court Wednesday, where they engaged in what was described by one reporter as a "vitriolic" standoff with Major League Baseball Commissioner Rob Manfred. 

Amid the acrimony, Diamond made a bombshell disclosure: The direct-to-consumer streaming service that's at the heart of the conflict, Bally Sports Plus, only has around 203,000 paying customers attached to it, nine months after its national rollout.

Also read: Meet the New Boss: Major League Baseball Officially Launches Into the RSN Biz With ‘MLB San Diego Padres’ 

In testimony Wednesday, Diamond CEO David Preschlack confessed that the figure was only 55% of his subsidiary's goal. (Doing the math, at $20 a customer, the service is generating only around $36 million in annual revenue. This is probably not enough dough to dent the interest payment on over $9 billion of Bally Sports debt.)

Described as “bobbing back and forth” on the witness stand, meanwhile, Manfred seemed to make no effort to hide his disdain for Sinclair executive chairman David Smith, who he said tried to blackmail MLB into forcing its teams into playing ball with Bally Sports Plus. 

Wednesday’s “marathon” hearing was well covered by The Athletic's David Kaplan, among few other sports media writers. It was held to adjudicate a petition filed by MLB. 

Diamond has paid four of the league's teams — the Arizona Diamondbacks, Cleveland Guardians, Minnesota Twins and Texas Rangers — only 75% of what it owes the clubs for 2023. And it’s waiting for the bankruptcy court to restructure the money-losing deals it has with those teams to “market value” before it pays more.

Diamond also hopes that the restructuring will result in all 13 remaining MLB teams under the Bally Sports RSN umbrella signing their DTC rights away to Bally Sports Plus, so that Diamond can offset Bally Sports revenue declines from cord-cutting and other factors. 

Currently, Diamond has all of its NBA and NHL team partners signed onto its Plus streaming service, and it has rights for five MLB teams. After walking away from the San Diego Padres on Tuesday, it continued Wednesday its “passionate pursuit” of streaming rights from the eight remaining MLB teams under the Bally Sports umbrella that it still hasn’t locked into DTC deals. 

As he has for years, Manfred continues to want nothing to do with Bally Sports Plus. He was in court Wednesday to ask Judge Christopher Lopez to cut the Diamondbacks, Guardians, Twins and Rangers loose from Bally Sports if Diamond won't pay the full freight of their respective local-TV licensing contracts. 

And as Kaplan describes it, Manfred's testimony revealed two entities who don't like each other very much. 

Manfred recalled — not so fondly! — a visit from Sinclair’s Smith in New York during an undisclosed time period. 

Quoted by The Athletic, Manfred testified, “And Mr. Smith, you know, said, ‘You know, we want these rights.’ And I said, ‘Well, you know, unfortunately, sometimes people want things they’re not going to get and you’re not getting these rights.’ And he said to me, ‘So let me tell you what’s going to happen.’ He says, ‘I put $2 billion into the purchase of these RSNs … so what I’m going to do is I’m going to keep this going long enough until I get my $2 billion out, OK? And then I’m going to start squeezing your clubs to take their rights fees down, OK, in order to make sure that I stay profitable in the RSN business. And if they don’t agree to that, I’m going to put the entity into bankruptcy, and then I’m going to selectively reject contracts.'”

Under its Chapter 11 status, Sinclair’s Diamond unit on Tuesday severed its 20-year, $1.2 billion deal with MLB’s San Diego Padres, citing the club's unwillingness to participate in Bally Sports Plus.

The MLB has stepped in to prop up distribution of a new Padres channel on DirecTV, Charter Communications, Cox Communications and Fubo, as well as present Padres games on MLB.TV DTC streaming. This arrangement started Wednesday evening. 

As for Manfred's testimony, we won't aggregate too much more from Kaplan, who stood on the front lines for the duration, and who made it pay off with the best read you’ll have all week. Here’s that Athletic link again. 

There’s a part in here where, under cross-examination, Diamond's attorney tries to hammer home the Sinclair talking point that Diamond now functions almost an entirely separate entity from its station group parent, Sinclair. 

Manfred smacked that one away like an 83 MPH hanging curveball. 

And he had some stern John Dutton-esque closing remarks for Diamond, Sinclair ... and Smith.

“But let me tell you, every time you threaten to reject the contract … we’re going to be there to stand up those broadcasts for clubs so that our fans are not deprived of their games. OK, so if you think the leverage is fans are going to be screaming, you’re wrong, because we’re going to be there to stay in those games," Manfred added. 

The court is expected to take a few days before ruling on MLB's motion. 

Major League Baseball’s regular season takes its first swings on March 30, with baseball fans able to access live game telecasts on broadcast, cable and streaming platforms. 

With the financial challenges of Bally Sports and Warner Bros. Discovery’s desire to exit the RSN business, the situation with regional sports networks situation remains in flux. The national TV situation is settled, though, with games set for linear channels Fox, ESPN, FS1, TBS and MLB Network, as well as streamers Apple TV Plus and Peacock, which both enter the second season of their multiyear deals.

Games on streaming platforms in particular are expected to help the league reach younger viewers, Lee Berke, a TV sports consultant and CEO of LHB Sports, said.

Also: MLB Will Reportedly Stream Games for Free Should Bally Sports Renege on TV Rights Deals

“The way to reach the next generation of baseball fans is to be on the screens that they are utilizing, and increasingly that’s services like Apple TV Plus, Peacock and YouTube,” Berke said. “You establish a presence there and you build on those and other services over time.” 

B+C Multichannel News recently caught up with Major League Baseball Commissioner Rob Manfred to discuss the outlook for linear and streaming TV this season. He also talked about this year’s rule changes — including a pitch timer, larger bases and a ban on defensive shifts — an effort to speed up games and increase excitement on the field. Here are highlights of that interview. 

B+C: How does baseball balance its linear television strategy with the need to reach new and potentially younger viewers on the streaming platform? 

Rob Manfred: Look, we see broadcast television, particularly for major events, will continue to deliver the biggest reach in terms of your audience and is a crucial component of the overall media strategy. It’s really, really important to have that bedrock of broadcast television.

B+C: Yet you’ve done major streaming deals with Peacock and Apple TV Plus. How have those deals worked for baseball so far? 

RM: We feel like the landscape going forward can be summarized in two thoughts. In my view, you want the widest reach for your biggest events, and we just talked about that with broadcast television. But then I think the second piece of it is making sure that people can watch what they want to watch when they want to watch it. I think our streaming experiments move us forward in that regard, and as such we’re going to move forward on
the platform.

B+C: Is baseball looking to do any additional distribution deals with other streaming services? 

RM: No … the Peacock and the Apple TV Plus deals were multiyear deals, so we’ll be back with our same partners this year. 

B+C: Overall, what should baseball fans look forward to in terms of watching baseball on television? 

RM: I think the big thing for 2023 is the rules changes that we have for this year in terms of the pitch clock and the elimination of the shift. While these are internal and non-broadcaster issues, it is all aimed at making the product better. ■

Conducting a news conference in Phoenix, Arizona Wednesday to mark the beginning of spring training, Major League Baseball Commissioner Rob Manfred was anxious to talk about league-wide momentum that saw ticket sales surge 10% in September, as well as how changes including the new balanced schedule might improve the overall fan experience. (Watch the full presser below.)

But the bulk of Manfred's 16-minute Q&A was spent responding to questions about what appears to be the imminent Chapter 11 filing by Sinclair Broadcasting's Diamond Sports Group, which owns the Bally Sports-branded regional sports networks that have broadcast rights deals with 14 MLB teams. 

Manfred stressed that he hopes Diamond is able to pay MLB's clubs "as required under its contract." But if that doesn't happen?

"We've been really clear that if Diamond doesn't pay, under every single one of the broadcast agreements, that creates a termination right, and our clubs will proceed to terminate those contracts," the commissioner said. 

"In the event that MLB stepped in, what we would do is we would produce the games, we would make use of our asset, the MLB Network, to do that. We would go directly to distributors -- meaning Comcast, Charter, the big distributors -- and make an agreement to have those games distributed on cable networks," Manfred added.

If it comes to that, and MLB ends up negotiating a carriage deal for its teams, the commissioner said he'd like to carve out streaming rights for the league to handle itself. 

"We would also be seeking flexibility on the digital side, so that when you look at MLB.tv, you'd go in, you can buy your out-of-market package like you've always had, but you would have the option to buy up into in-market games, which I see as a huge improvement for fans," Manfred said. 

This week, as expected, cash-strapped Diamond elected not to pay a $140 million mid-February all-interest payment to lenders covering around $9 billion in debt. It's expected that Diamond will file for bankruptcy after the 30-day grace period for that payment expires in March. 

Sinclair paid over $10 billion back in 2019 to acquire 19 regional sports networks from Fox, as the entertainment conglomerate was divesting many of its assets to Disney. 

Sinclair, which rebranded those channels as "Bally Sports" and set up a subsidiary, Diamond Sports Group, to manage them, has embarked on two stock buyback campaigns since that purchase. In fact, the money from those buybacks could have floated what Diamond owes the MLB teams for their broadcast rights, MLB biz watchers note.

But in addition to its creditors, there's now serious questioning as to whether Diamond can pay MLB's clubs what it owes them. And due to the seasonality of the deal structuring, the bulk of this year's payments are due between now and April 1, Manfred said. 

The affected MLB teams under Bally Sports contract include: the Arizona Diamondbacks, Atlanta Braves, Cincinnati Reds, Cleveland Guardians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Miami Marlins, Milwaukee Brewers, Minnesota Twins, San Diego Padres, St. Louis Cardinals, Texas Rangers and Tampa Bay Rays. 

Meanwhile, the Chicago Cubs and New York Yankees co-own RSNs with Diamond that aren't branded under the Bally Sports portfolio. 

The Bally Sports channels also have broadcast contracts with 16 NBA franchises and 12 NHL teams, all of which don't wrap up their 2022-23 regular season schedules until April. 

And to make matters worse for the pro sports ecosystem: AT&T SportsNet RSNs contracted with the Colorado Rockies, Houston Astros and Pittsburgh Pirates --- channels that are now owned and operated under the spun off Warner Bros. Discovery -- have in recent weeks handed over to the teams "lighter than expected envelopes," according to a report in Sportico earlier this week. 

Manfred didn't address the AT&T SportsNet payment shortfall in his Wednesday discussion. 

The commissioner did, however, address the larger longterm fate of regional sports networks ... which he believes will live on, but not at the scale we've all become used to. 

"It's hard to escape the reality that change in media consumption has been particularly hard on the RSNs," Manfred said. "Obviously, we want all of our broadcast partners to be successful. We don't want them to have financial difficulties. We have been spending a lot of time and effort trying to work with Diamond to figure out exactly where they are.

"Obviously, our first choice would be that Diamond pay the clubs what they're contractually obligated to pay them," he also said. "But because I'm a contingency planner by nature, we are prepared no matter what happens, with respect to Diamond, to make sure games are available to fans in their local markets. We think it will be both linear in the traditional cable bundle and digitally on our own platforms, but that remains to be seen."

MLB Network has cut ties with star reporter Ken Rosenthal. Rosenthal has been on the baseball beat for over 25 years, and is a senior baseball writer at The Athletic. 

“Can confirm MLB Network has decided not to bring me back,“ Rosenthal said on Twitter. ”I’m grateful for the more than 12 years I spent there, and my enduring friendships with on-air personalities, producers and staff. I always strove to maintain my journalistic integrity, and my work reflects that.”  

The New York Post previously wrote of Rosenthal’s departure, saying it is tied to the bow-tied reporter’s criticism of MLB Commissioner Rob Manfred. “Rosenthal, a top news breaker, was first kept off the air for around three months, according to sources, after he wrote columns in 2020 — with the season in jeopardy due to the pandemic — analyzing Manfred’s handling of the situation for The Athletic,” said the Post. 

Major League Baseball owns MLB Network, alongside a clutch of cable companies. 

“As MLB Network continues to look at fresh ways to bring baseball to our viewers, there is a natural turnover in our talent roster that takes place each year,” an MLB spokesman told The NY Post. “Ken played a significant part at MLB Network over the last 13 years. From spring training to the winter meetings, we thank him for his work across MLB Network’s studio, game and event programming, and wish him the very best going forward.” 

Rosenthal continues to work for The Athletic and for Fox Sports.

Sinclair Broadcast Group CEO Chris Ripley tried to deflect attention away from the mastodon in the room during an earnings conference call with analysts on Wednesday, telling them that although the broadcaster has secured direct-to-consumer rights with just four Major League Baseball teams less than six months before it is supposed to launch a DTC service, it will have the necessary deals in hand in time. 

“We do think we have critical mass in terms of rights to launch a product,” Ripley said on the earnings call. “And that’s what we intend to do.”

Maybe he‘s right. Maybe Sinclair will craft renewal deals with 10 other baseball teams over the course of the next 20 weeks that include DTC, linear and authenticated rights for more money. 

Maybe the teams, anxious to keep the money spigot from the linear RSNs flowing, will work out some kind of deal for DTC rights that will be beneficial for all, instead of taking advantage of Sinclair's desperation and make them pay through the nose. Maybe the teams, which though the league has hinted that it may keep DTC rights for itself, have changed their minds.

And then again, maybe not.

After months of telling investors and analysts not to be concerned about their ability to secure the necessary rights for its 2022 direct-to-consumer service, it came as a bit of a shock when Ripley said it only had secured those rights with four baseball teams. The Sinclair CEO said that in the past the company has obtained those rights as part of larger carriage negotiations. Ripley didn’t say which 10 baseball teams it needed to obtain rights from — some outlets have speculated the teams Sinclair does have deals with are the Detroit Tigers (77-85), Kansas City Royals (74-88), Milwaukee Brewers (95-67) and Miami Marlins (67-95), all but one with losing regular season records in 2021 —  or when it expected to reach those deals. Sinclair has said it will launch the DTC service in the first half of 2022, likely around April, the start of the MLB regular season. 

The revelation also seems to contradict Ripley’s earlier comments when he said during a Q1 earnings conference call that the company had DTC deals with the “vast majority” of its teams. In hindsight, it appears that Ripley was mainly talking about linear rights with all its teams — baseball, basketball, hockey and whatnot — and not DTC rights.

LightShed Partners principal Rich Greenfield, a vocal critic of Sinclair’s RSN strategy, wasn’t amused.

“Amazing how many times Chris Ripley has misled investors publicly,” Greenfield said in a tweet Wednesday. Later, he expressed doubt that Sinclair will be able to secure DTC rights with teams as they re-up their linear deals, adding that he believes teams are “moving in a different direction.”  

Sinclair’s RSN dilemma comes a few weeks after Major League Baseball commissioner Rob Manfred told an audience at the CAA World Congress of Sports that the broadcaster not only didn’t have sufficient rights to launch its own DTC service, it didn’t have gambling rights from the teams. And Manfred didn’t seem to want to give either of those rights up too easily.  

”We’ve been very clear with them from the beginning that we see both those sets of rights as extraordinarily valuable to baseball, and we're not just going to throw them in to help Sinclair out,” Manfred said at the conference, according to Sports Business Journal.

Gambling rights are an important component of Sinclair’s future RSN success, and maybe Manfred’s comments are merely a negotiating ploy on behalf of the league. But not everybody thinks so.

In the Q3 conference call, Ripley seemed to brush off any notion that the league may be positioning itself to launch its own direct-to-consumer product, adding that the RSNs have linear and authenticated digital deals with teams that would make such an endeavor highly unattractive. 

“What’s important to note is that we have exclusive local rights for our teams,” Ripley said on the conference call. “And those rights cannot be infringed upon by any other party to launch a direct-to-consumer product without significant ramifications. So we continue to negotiate in good faith with all interested parties to make direct-to-consumer a reality.”     

Sports consultant Lee Berke, president and CEO of LHB Sports, Entertainment & Media, said that isn’t so cut and dried because generally team deals are subject to league policies.

That could be as simple as striking a deal with teams to show 140 games on a regional basis, but a league agreement takes that down to 120 games nationally. So it is unclear whether Sinclair’s current deals would prevent teams from launching a regional DTC service but allow a national one. 

“Those are the sorts of things that do happen,” Berke said, adding the same holds true for the NHL and NBA. “It has to, because you are striking a balance between what you can sell nationally and what you can sell locally. So, for them to say, ‘We have a critical mass of rights,’ that’s subject to what the league wants you to have.”

Also read: Sinclair RSNs: Timing is Everything 

Adding to the uncertainty is the obvious animosity between MLB and Sinclair. Berke and other sports executives have said that Manfred’s scathing public criticism of the broadcaster was unprecedented and points to a relationship where the owner of the content has little incentive to help out its distributor.

Even NBA commissioner Adam Silver, who has been generally mum about rights deals in the past, seemed to lash out at Sinclair at the Oct. 12 CAA conference, telling the audience that he believed the RSNs are probably worth half of what the company paid for them two years ago.

“They paid $10 billion, it’s not clear it’s a good deal with $5 billion,” Silver said of the Sinclair RSNs at the conference, according to The Streamable. The Sinclair RSNs are also in negotiations for rights with 16 NBA teams. 

Manfred also criticized Sinclair for publicly airing its debt issues with the entity that holds its RSNs, Diamond Sports Group. Diamond Sports has been trying for months to restructure its $8 billion in debt, and in September said it was seeking another $600 million in financing from its bondholders for the DTC launch.  At the CAA World Congress of Sports, Manfred said Sinclair’s debt issues have cast a negative pall on the RSN space. 

During Wednesday’s conference call with analysts, Ripley said Diamond Sports has “ample” liquidity for the next 12 months, and that it is in “discussions with various commercial partners regarding financing.”

And when asked if MLB’s biggest concern with Diamond Sports is its debt, and could be solved by cleaning up its balance sheet, Ripley agreed. 

“I think getting additional financing would be helpful for all parties,” Ripley said. “I mean, that’s sort of undeniably true. And I think you’re spot on in that observation.” 

And then there is the question of whether Sinclair will be able to hammer out 10 rights deals with 10 different teams in time to launch the DTC network. Ripley didn’t say when those deals would come up for renewal.

According to one sports executive who asked not to be named, it is highly unlikely that renewals for all 10 remaining MLB teams were set to expire between now and April, so that means Sinclair will have to renegotiate existing pacts with the teams. 

“The teams have all the leverage,” the sports executive said, adding that clubs don’t have much incentive to open up existing agreements to negotiate DTC rights before they come due. “Why would they do that? What are they getting?”

The executive added that even if Sinclair agreed to terms that were highly favorable to the teams, the sheer number of deals to be done could pose its own problems.  

“That’s an incredibly ambitious task,” the sports executive said of trying to negotiate 10 rights deals by April 1.  

While Ripley appears confident those deals will be reached quickly, negotiations with Dish Network for Sinclair’s TV stations and RSNs continue to drag on. Dish’s carriage deal originally expired in August, was extended to September and currently is in the midst of a long line of one-week extensions as the parties have failed to reach a compromise. Many analysts believe that Dish has had the upper hand in talks since the beginning, and is in no hurry to reach a deal unless the terms are extremely favorable to the satellite TV giant. So, to believe that MLB teams that essentially hold the key to Sinclair’s DTC streaming future will rush to complete a deal to help out the broadcaster may be a bit naïve. 

But talks with Dish are apparently ongoing. Ripley said Sinclair and Dish are in “very short-term renewals at this point,” adding that the company does not comment on “live negotiations.”

Dish Network is scheduled to hold a conference call with analysts at noon Nov. 4 to discuss Q3 results. Perhaps it will add some further clarity to those negotiations.   

However, as part of its Q3 results, Sinclair reduced Diamond Sports’ full-year cash flow guidance by 12%, a move that some analysts took to mean they don’t think they’ll be able to reach a Dish agreement this year.  

And though Cahall agreed that with about $476 million in cash, Diamond Sports has enough liquidity to last 12 months, he added it is going to be a tight next few months for RSN business. 

About half of that cash will be tied up in sports rights payments, bond interest payments and distributor rebates in the first half of 2022, Cahall wrote in a research note, adding that the “real crunch” will occur in Q4 2022. In the meantime, Cahall wrote that Diamond Sports’ unsecured bonds are trading at about 26 cents on the dollar. 

The analyst wrote that investors, once most concerned about the debt restructuring, are now hyper-focused on direct-to-consumer streaming rights. 

“We think it's too close to call,” Cahall wrote, adding that without a direct-to-consumer product, “it's tough for us to see a financial future for Diamond.” 

Berke added that despite Sinclair’s RSN difficulties, the value of sports content remains high, which could raise optimism that a deal can eventually be done. But there will also have to be some changes. The sports business isn’t what it used to be. 

“This is not a crisis of the value of the content — ratings still do well,” Berke said. “But it’s a crisis of the distribution of the content. It’s a fact that the business model is outmoded. All of that needs to be addressed. The easier path is to negotiate this out. But it has been two years, and they have yet to work it out.”

Count Major League Baseball Commissioner Rob Manfred as not a fan of Sinclair Broadcast Group's $250 million plan to parlay its 19 regional sports networks into a streaming service. 

Also read: Why Sinclair’s $250 Million Sports Streaming Swing Could Deliver a Walk-off Defeat of Pay TV

For one thing, Manfred doesn't believe Sinclair has enough digital rights from the 14 MLB clubs it has licensing agreements with to pull off such an enterprise. 

"The other set of rights they've talked a lot about is gambling rights, they don't have those either," Manfred said Tuesday, speaking at the CAA World Congress of Sports event in New York, an event covered by Sports Business Journal heavyweight John Ourand. 

"We've been very clear with them from the beginning that we see both those sets of rights as extraordinarily valuable to baseball, and we're not just going to throw them in to help Sinclair out.”

Through an Securities Exchange Commission filing in June, Sinclair revealed plans to raise $250 million to create a live sports OTT venture based on its RSNs, which are managed by a separate company called Diamond Sports Group. Sinclair also outlined a plan to restructure about $8 billion in debt. 

Manfred described reports that MLB would agree to taking an ownership stake in order to offer Diamond the necessary digital rights as "not accurate." 

In fact, the commissioner described Sinclair's RSN business as perhaps one MLB has very little interest in integrating with at all. Like all RSNs, the Diamond Sports Group channels have to deal with cord cutting. But the debt makes the story much more "negative," Manfred said. 

"The other part of their problem is there's excessive leverage on that business." Manfred said. "If you think about what they paid for it, how much debt they have on it, I mean, you think it's over 80%, it's a huge number. And that leverage has produced headlines that are more negative."

Major League Baseball Commissioner Rob Manfred threw his hat in the ring for the 22 Fox regional sports networks currently on the block, telling Fox Business Network host Maria Bartiromo that the networks are valuable properties.

“Yes, we're interested in the regionals,” Manfred told Bartiromo on Fox Business Networks’ Mornings with Maria. “You know, in 12 markets baseball on the Regional Sports Network is the number one programming throughout the summer. In 24 of 25 markets that we operate in, we're the number one programming on cable. So these Regional Sport Networks are really valuable, valuable assets and we think that the combination of that traditional mode of delivery and the digital rights that we control is an opportunity for the game.” 

The 22 RSNs, which some analysts have valued at as much as $20 billion, are on the block as a condition of The Walt Disney Co.’s pending $71.3 billion purchase of certain assets of 21st Century Fox. In issuing its approval of the deal, the U.S. Department of Justice required that Disney divest of the 22 RSNs within 90 days after closing the larger Fox deal. That larger deal is expected to close in the first quarter of 2019.

Related: Books Out on Fox RSNs

The RSNs own rights to 44 professional baseball, basketball and hockey teams and in markets like Atlanta, Detroit, Kansas City, Miami, Phoenix and Indianapolis. The New York Yankees, which own 20% of Fox regional the YES Network, have the right of first refusal to purchase the remaining interest of the network, and are reportedly assembling a group of private equity investors to make a bid. 

Related: The Curious Case of the RSNs

MLB was considered to be among the parties expressing interest in the RSNs, a field that has been said to include TV station group Sinclair Broadcast Group, online retailer Amazon, private equity investor The Blackstone Group and rapper and entrepreneur Ice Cube. In his interview with Bartiromo, Manfred added that digital streaming has been an important part of the league’s growth.

“Well, I think our fans want to be able to consume the game on the platforms that they're naturally on… that's why we have experimented with things,” Manfred told Fox Business. “We had 30 games on Facebook last year. We have a relationship with Twitter. YouTube's been very active with respect to our product. And it's important for us to deliver games in the way that fans want to see them.”