Potential ESPN Streaming Endeavor Is Of Great Interest To Major League Baseball

Major League Baseball is confronting economic challenges presented by Diamond Sports Group and Warner Bros. Discovery as they reassess the future of regional sports networks, local media rights, and streaming services. In a recent announcement, the league has named three seasoned executives to its newly formed Local Media department which will be led by Executive Vice President Billy Chambers. Doug Johnson will serve as Senior Vice President and Executive Producer, Local Media. Greg Pennell has accepted the position as Senior Vice President, Local Media and Kendell Burgess will become Vice President of Local Media Technical Operations.

As innovation is fueled by motivation and urgency, ESPN is thinking outside the box with a creative concept that could quell the frustrations surrounding sports consumption in an overcrowded environment. Media rights for sports leagues are spread across a variety of distributors which has become a confusing and costly investment for fans. Originally reported by Alex Sherman of CNBC, ESPN would like to develop a one stop shopping model using the company’s website and its app. A feature would appear on ESPN.com or its app where fans could be connected to live sports content from national, regional, or global streaming services. ESPN would be providing unprecedented access that goes well beyond their licensed content.

While presently an idea in its infancy and would require tremendous collaboration from forward thinking sports leagues and media partners, Major League Baseball must use ESPN’s boldness as inspiration and take a similar path in rethinking content distribution. ESPN is proposing accessibility to live sports around the world in one location. Streaming services such as Apple TV+, Peacock, Amazon Prime, and others would still be required as customers could possibly be given the option of purchasing a subscription plan through ESPN.com or its app. The “worldwide leader in sports” would receive a portion of the revenue generated from the sale with the remainder going directly to the streaming service who is in possession of the broadcast rights. ESPN would honor customers who already have subscriptions to streaming services with access to a link free of charge.

It is expected that more than half of the ball clubs in Major League Baseball will soon be taking back their local broadcast rights. Thanks to cord cutters and streaming services, financial burdens are consuming regional sports networks due to archaic distribution models. The short term solution might be to negotiate with cable and satellite television providers as the MLB Network will produce the ball games or offer an in-market package for the affected fans through MLB.TV. It will be a daunting task for the MLB Network as its emphasis is on in-studio programming and location shoots such as spring training and crown jewel events.

As Diamond Sports Group and Warner Bros. Discovery appear to be leaving the regional sports network business, the matter becomes even more complicated for Major League Baseball given the success of the New England Sports Network (Boston Red Sox), Marquee Sports Network (Chicago Cubs), Spectrum SportsNet LA (Los Angeles Dodgers), SportsNet New York (New York Mets), and the Yankees Entertainment And Sports Network (New York Yankees). In some cases, the ball clubs own a portion of the regional sports networks as well. In the case of the New York Mets, SportsNet New York is owned by Sterling Entertainment Enterprises in partnership with Charter and ComcastCMCSA
instead of Steven A. Cohen, Owner, Chairman, and Chief Executive Officer of the franchise. Regardless of the success enjoyed by a few regional sports networks, the focus going forward must be on streaming and direct-to-customer options that go well beyond the local markets.

A well run regional sports network can perfectly align with a ball club and create a powerful identity that is singular in nature. Given the daily rhythms of baseball and how it breeds familiarity, a regional sports network is the ultimate content provider and source of comfort for fans through storytelling. It’s more than a cable, satellite, or streaming service that broadcasts ball games. Unlike any other sport, there is a warmth and soul to the voices who broadcast local baseball games as they are as much a part of the experience as the ball players themselves.

The matter must be separated into two categories: content and distribution. Common sense tells us there are Boston Red Sox fans outside of the six New England states who crave an immersive experience with the ball club. Major League Baseball knows they need to develop a distribution model that provides unlimited access to content at an affordable price without restrictions based on geography. Distinctions between in-market and out-of-market along with the dreaded blackouts have infuriated fans. The overall effectiveness of a distribution model that prioritizes streaming begins with the ease in which content is accessed and that’s why ESPN could once again transform the sports media landscape.

Major League Baseball is not ready to take the full plunge into the world of streaming but has an eagerness in exploring the environment with curiosity and enthusiasm. Commissioner Manfred knows the present and future of baseball is in streaming, but the sport is still beholden to media rights designed for distribution through cable and satellite television. Four of Major League Baseball’s media rights partners (FOX, Turner, ESPN, and Apple) are contractually obligated through the 2028 season. Peacock, NBCUniversal’s streaming service, concludes its contractual obligation at season’s end.

Digital consumption and social media engagement are subjects of great interest to Major League Baseball as it continues to build deeper connections with a younger audience. As Commissioner Manfred navigates the regional sports network entanglements created by Diamond Sports Group and Warner Bros. Discovery, considerable thought must focus on the concept of what would the ultimate Major League Baseball experience look like for a cord cutting fan. What if certain aspects of ESPN’s “TV Guide” streaming idea and the best attributes of MLB.TV, MLB.com, and MLB At Bat app could be incorporated into one digital platform? Major League Baseball could one day develop an à la carte digital pricing model where fans create streaming subscriptions based on personal preferences and price sensitivities, but it must begin with accessibility and choice.

Source: https://www.forbes.com/sites/waynemcdonnell/2023/03/06/potential-espn-streaming-endeavor-is-of-great-interest-to-major-league-baseball/