The San Diego Padres have become the first Major League Baseball (MLB) team to integrate their broadcasting rights under a national umbrella. The move comes after Diamond Sports Group, a Sinclair subsidiary, failed to pay the Padres, allowing the team to break free from its contract. MLB will take over the Padres’ local broadcasts, ensuring that fans do not miss any games. This article explores the implications of this move and what it means for the future of broadcasting rights in baseball.
Details of the transition
The mechanisms of MLB’s approach are highly complex, but many of the details were sorted out on the front end, given Diamond’s publicly tenuous financial situation. Padres games will be free for all fans on MLB.com and Padres.com from Wednesday to Sunday, including two road games against the Miami Marlins and three home games against the Chicago Cubs. Starting next Monday, a subscription cost will kick in for Padres streams in the local market. In-market fans can pay $19.99 a month or $74.99 for the rest of the season to watch San Diego’s games on MLB.tv.
MLB has cut deals with several cable companies, including DirecTV, AT&T U-verse, Cox, and Spectrum, to air Padres games through their services. These will be available on different channels, and fans’ guides will list the channel simply as “San Diego Padres.” MLB essentially eliminated territorial rights through those deals, which means that, for local fans who purchase the Padres MLB.tv package, streamed San Diego games will no longer be subject to blackouts.
Impact on the Padres
San Diego began this season with a near-$250 million payroll, which stood as the third-highest in the sport, the largest in franchise history, and more than 3½ times larger than it was just six years ago. However, its financial future is uncertain, at least concerning its profits off broadcasting rights. Only one of three payments for an RSN contract that reportedly pays the team around $50 million a year was ultimately made by Diamond.
Despite this, the Padres will still generate broadcast revenue through the deals MLB cut with the various cable companies in preparation for this possibility. Those deals, details of which have not been made public, probably aren’t as close to what San Diego was generating through Diamond (particularly because streaming rights weren’t included in them). But the league believes teams eventually will benefit from broadcasting rights and subscription revenue operating through a national model.
Outlook for other MLB teams
The Padres’ move to a national broadcasting plan could have implications for other MLB teams. Big-market teams such as the New York Yankees and the Boston Red Sox, who own their regional sports networks, disagree with the league’s stance, but the league believes that teams will eventually benefit from a national model.
A hearing will take place in Houston, during which a bankruptcy judge will preside over Diamond’s claims that it should pay lesser rights fees to the Minnesota Twins, Texas Rangers, Arizona Diamondbacks, and Cleveland Guardians to account for market forces that have greatly diminished the traditional cable model in recent years. The judge’s ruling, which is expected no later than Thursday night, will play a big role in Diamond determining which contracts it keeps or sheds as part of the bankruptcy process, not just with those four teams but potentially with some of the other nine that remain under its ownership.
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