Diamond Sports’ Bally Sports-branded networks carry the games of 42 pro teams, including 16 NBA, 14 MLB and 12 NHL clubs. But when Diamond filed for bankruptcy last week, the impact on baseball got all the attention. Why? Timing and revenue generation.
Basketball and hockey represent two-thirds of the affected teams, but the NHL and NBA wrap up their seasons over the next four weeks, and those teams have already received the lion’s share of their rights fees. Baseball’s opening day isn’t until March 30, which means clubs are just getting their first checks—or not, in the case of the Arizona Diamondbacks.
The bigger factor is how teams in each of the leagues generate revenue. MLB’s 30 teams generated a record $10.9 billion in revenue last season from tickets, sponsorships, TV, concessions and other sources, including an estimated $2.25 billion from their local TV deals. The TV tally is nearly double what NBA teams earn and more than three times those of the NHL’s 32 teams.
The NFL’s regular season and playoff TV packages are all controlled by the league, so their only local TV revenue comes from preseason games, representing less than 1% of the NFL’s total. But don’t fret for football; every other league envies the $11 billion NFL teams divvy up from leaguewide revenue, which was 64% of the NFL’s $17.4 billion total in 2021.
Local media, including radio, is 23% of MLB team revenue. It is the third biggest revenue stream after central revenue and tickets, but it is by far the biggest exposure to regional sports networks of any major U.S. sports league, and the NBA's 13% of revenue will dip further when its next national TV deals commence in 2025. Most MLB teams are in the 18% to 25% range, but the two Los Angeles franchises lean on local media for more than 30% of their revenue after netting out their revenue sharing payments.
Baseball provided a perfect foundation for RSNs as they proliferated through the 1990s and 2000s. The game delivered a six-month season of highly rated three-hour games, mostly in primetime, along with shoulder programming of pre- and post-game shows.
The race to lock up MLB teams to long-term deals created a stream of 10-figure pacts. The Dodgers inked a 25-year deal worth $8.35 billion. Their SoCal rivals, the Angels, got $3 billion for 20 years on Fox Sports West, now under the Bally Sports umbrella. The Texas Rangers, Philadelphia Phillies and Atlanta Braves all signed deals for at least 20 years with average annual values north of $80 million. Live sports allowed the networks to charge even higher affiliate fees, and baseball owners passed on their jackpots to players. Before 2014, Alex Rodriguez was the only player with an average salary of more than $26 million. There are 24 this season, according to Spotrac.
Baseball RSN ratings were and still are elite. Last season, it was the No. 1 programming in primetime on cable in 22 of 29 markets and 13 out of 29 when including broadcast networks, according to Nielsen (Toronto data is not available). But MLB is facing a reckoning accelerated by Diamond Sports’ $8 billion debt load. The company owes $1.92 billion in rights fees in 2023 with roughly 55% earmarked for baseball, but it skipped its $140 million debt payment in February, telegraphing last week’s bankruptcy filing.
Baseball’s audience skews older than other U.S. leagues, and the league is hoping a revamped distribution model that allows fans to access games through multiple platforms will allow it to reach a younger audience that skews higher on cord-cutters.
“The content has not suddenly gone from being valuable to being valueless,” Ed Desser, a media consultant who has negotiated more than 70 sports rights deals, said in a phone interview. “Baseball will figure out new ways to monetize it, and there are advantages to a streaming world as it allows you to have more of a direct relationship with your consumer.”
