Rights Ownership and the Major Leagues

Rights management has always been a semi-confusing topic that even those of us in the content delivery and distribution space can find slightly intimidating.  But it’s an important issue these days, and whether you are a team, a league, an owner or a provider, sooner or later, it is going to be something you have to deal with, drama and all.  You see, rights management for the major leagues has all the makings of a good daytime soap – lots of intrigue, conflict, power plays, and courtships.  And the central character that everyone is watching right now (literally – with the World Series approaching) is Major League Baseball; Americas ‘darling’ when it comes to sports, with no shortage of drama to keep things interesting.

Baseball’s Rights Management

Rights management for MLB, as for all major leagues, is typically divided into two main areas; broadcast and digital rights.  For this discussion, we’ll focus on the digital rights (since that is much juicier and the rumors much more enticing) but if you would like to see who owns what on the broadcast side, you can go here.

Digital rights, or ‘interactive rights’ as they are sometimes called, are managed centrally by MLB Advanced Media who provides live streaming through MLB.TV (since 2002) and manages the revenue sharing for all 30 clubs (like its TV counterpart, Extra Innings).  This revenue sharing model is not only unique, it’s also the focus of a lot of internal ‘bickering’ within the ranks of baseball.

Who Owns Digital Rights – The League or The Team?

The main issue here is $$$. Surprise, surprise.  Of course, it is completely understandable that the individual teams want to have control over their own digital rights and the revenue associated, after all, as Tom Werner of the Red Sox said back in 2009, “when we acquired the rights to the Red Sox, we believed that we were acquiring the video and radio rights for games in our own territory”.  But it’s not just about the relationship between MLB and the teams; there is a third party involved here that is secretly courting the teams. And as is the case in any good marriage, three is a crowd.  Regional Sports (Media) Networks are a clubs’ answer to revenue sharing, and a whole lot more sexy than your average broadcaster.  But as club controlled RSN’s become more powerful, so does the divide between the haves and the have-nots.

The truth is, MLB is doing a remarkable job at keeping both the Mrs and the mistress relatively happy at the same time, but as we all know from the daytime dramas it is only a matter of time before one of the two smells deceit.  The dilemma for MLB is simple; they have to provide the blackouts of streaming in local markets, or risk possibly cannibalizing the broadcast TV audience and resulting in ‘bad blood’ with local cable stations.  The teams, to their credit, have made the argument that changes to existing policies would actually supplement coverage on club-owned regional sports networks, not take it away.  And so the dance continues…

Revenue Sharing: Good or Socialist?!

The other question being hotly debated across the leagues, is whether MLB’s centralized revenue share model evens the playing field or if this the sports world’s version of socialism.  And what happens when digital rights are worth more than cable rights (yes, I said it) and what happens when local digital rights become even bigger as a result – how are the clubs that have no RSN ‘backing’ supposed to compete with those that are?  OMG, maybe this revenue sharing thing wasn’t such a bad idea after all!

At the end of the day, I really think that there is a master plan at work here and those who work for, in and around MLB, are going to have to have a little more patience.  MLBAM has successfully brokered deals with the likes of YES and ESPN; case in point: their digital rights deal with ESPN that was extended in 2008 to 2013. And the subscriber model that has worked so well for MLB.TV isn’t going anywhere; in fact, other leagues are trying to mimic the same model (with various degrees of success; which we will examine in upcoming editions).

Does the Solution Lie in Content Delivery Technology?

So maybe, the model they will eventually end up with just builds on an already successful relationship where only subscribers to the cable channel can access the in-market live streaming of games via geo-blocking technology.  (Hey, doesn’t Level 3 do that?) Or maybe MLB will go the direction of TV Everywhere (Can anyone say MLBGO?).

It is a brave new world out there in digital sports; just look at the latest addition of the Glenn Beck show to MLBAM’s online network.  At the end of the day, providing a lucrative, consistent revenue stream will be core to any league’s online strategy.  And whatever the end result, there is no disputing that the Broadcasters, RSNs, MLBAM and the local teams all have a vested interest in successful resolution; the sooner the better.

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Jackie Donaldson

I am Segment Director for Sports & Media within Content Markets, which essentially means I run strategy/ BD activities for the sports and media verticals. Outside of work, I am the proud mother of a precocious 2 year old human child, as well as 5 horses, 3 dogs, and 5 cats. Life is never dull!!

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One thought on “Rights Ownership and the Major Leagues

  1. I am not objective about Jackie Donaldson since we are so fortunate to have her in our family.

    However, it seems to me that her analysis of the direction in which Rights Managment of this goes is right on!

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