[OutsiderFan]

This is a really informative article that speaks to the changing landscape of sports media rights, with a focus on MLB.
https://tcbmag.com/the-bally-sports-mess-explained/

Count me as wanting MLB to move away from the RSN model and MLB doing the negotiating for all the teams, pooling the money and have a much greater revenue distribution  - that will come with a salary cap - between MLB teams. It's so bad to have a league with teams that you know as "small market" and "big market" competing at the same level. 

Even the college conferences have realized how equal revenue sharing among conference members is in the best interest of all parties, big program or small.  The NFL has become the biggest sports business by following an equal revenue distribution model. MLB is going to figure this out eventually.

Why should the Yankees and Dodgers subsidize teams that make zero effort to field a competitive team?  Fisher would simply pocket his share and the A’s would still be woefully underfunded.

No to revenue sharing, no to salary caps and yes to a free market - spend whatever you want…..

The #1 driver of sports consumption is uncertainty of outcome. This is why the NFL is the richest league in North America by pursuing parity, and gambling is such a gigantic and growing part of the games. And based on some data I heard yesterday from a sports media and gambling executive, I actually think the reason the pitch clock was introduced in MLB has as much to do with gambling as it does anything else. It was shocking to hear the numbers of bets people are making on things like "will the next pitch be a ball, strike, or be put in play, and will it be o/u x MPH." To keep an audience engaged and betting, you need a certain pace of play like the NFL and NBA have with the play clock and shot clock.

But back to the point, MLB teams are facing a big challenge with the migration to streaming of games and the future of the RSNs that MLB teams have relied on for so much of their revenue is bleak at best. Only MLB has the leverage to control the assets in packages to drive up their cost. If 32 teams cut their own deals, the overall amount paid for them will be lower than if MLB does one sale for all of them. Ultimately, if the clubs decide to pool their rights like schools do in college conferences, all but a handful of teams will earn more money on a per team average basis.  

It sure seems we are going to be watching more games on YouTube, Apple, Amazon, and ESPN+ than cable in the not too distant future. In that streaming world, it's not going to matter what individual markets the teams are playing in when the price for MLB rights is determined. It's not like the SEC schools are in major markets and look at the money they command. I can stream a game from the middle of Montana where there is no MLB team for hundreds of miles without need for a cable subscription to an RSN in a given market to watch. And I won't need a cable or satellite subscription to get MLB Extra Innings to see it either. I'll be paying someone else for the streaming service on top of my ISP, and that someone else will have spent a fortune for the opportunity to stream the games. 

But the bigger deal is gambling. Individual teams can't really cut deals with gambling services and mass market them like the leagues can, and gambling services need leagues to promote gambling through their own media assets because the customer acquisition cost right now is apparently $900 per (a lot of this is the money gambling services give people to start out with in their account).  Any money gambling services can save by having league partners use their own assets to promote them, is super valuable.

There are so many variables at stake right now that really have nothing to do with traditional valuation metrics like market size, that it's hard for me to believe there aren't going to be some significant evolutions in how particularly MLB teams generate, and more importantly, share revenue. And I do think MLB owners want a salary cap and will eventually get one. All they need to do is convince enough union members that a cap will make more members more money than they are making now and it will happen.

[OutsiderFan]

This is a really informative article that speaks to the changing landscape of sports media rights, with a focus on MLB.
https://tcbmag.com/the-bally-sports-mess-explained/

Count me as wanting MLB to move away from the RSN model and MLB doing the negotiating for all the teams, pooling the money and have a much greater revenue distribution  - that will come with a salary cap - between MLB teams. It's so bad to have a league with teams that you know as "small market" and "big market" competing at the same level. 

Even the college conferences have realized how equal revenue sharing among conference members is in the best interest of all parties, big program or small.  The NFL has become the biggest sports business by following an equal revenue distribution model. MLB is going to figure this out eventually.

Why should the Yankees and Dodgers subsidize teams that make zero effort to field a competitive team?  Fisher would simply pocket his share and the A’s would still be woefully underfunded.

No to revenue sharing, no to salary caps and yes to a free market - spend whatever you want…..

The #1 driver of sports consumption is uncertainty of outcome. This is why the NFL is the richest league in North America by pursuing parity, and gambling is such a gigantic and growing part of the games. And based on some data I heard yesterday from a sports media and gambling executive, I actually think the reason the pitch clock was introduced in MLB has as much to do with gambling as it does anything else. It was shocking to hear the numbers of bets people are making on things like "will the next pitch be a ball, strike, or be put in play, and will it be o/u x MPH." To keep an audience engaged and betting, you need a certain pace of play like the NFL and NBA have with the play clock and shot clock.

But back to the point, MLB teams are facing a big challenge with the migration to streaming of games and the future of the RSNs that MLB teams have relied on for so much of their revenue is bleak at best. Only MLB has the leverage to control the assets in packages to drive up their cost. If 32 teams cut their own deals, the overall amount paid for them will be lower than if MLB does one sale for all of them. Ultimately, if the clubs decide to pool their rights like schools do in college conferences, all but a handful of teams will earn more money on a per team average basis.  

It sure seems we are going to be watching more games on YouTube, Apple, Amazon, and ESPN+ than cable in the not too distant future. In that streaming world, it's not going to matter what individual markets the teams are playing in when the price for MLB rights is determined. It's not like the SEC schools are in major markets and look at the money they command. I can stream a game from the middle of Montana where there is no MLB team for hundreds of miles without need for a cable subscription to an RSN in a given market to watch. And I won't need a cable or satellite subscription to get MLB Extra Innings to see it either. I'll be paying someone else for the streaming service on top of my ISP, and that someone else will have spent a fortune for the opportunity to stream the games. 

But the bigger deal is gambling. Individual teams can't really cut deals with gambling services and mass market them like the leagues can, and gambling services need leagues to promote gambling through their own media assets because the customer acquisition cost right now is apparently $900 per (a lot of this is the money gambling services give people to start out with in their account).  Any money gambling services can save by having league partners use their own assets to promote them, is super valuable.

There are so many variables at stake right now that really have nothing to do with traditional valuation metrics like market size, that it's hard for me to believe there aren't going to be some significant evolutions in how particularly MLB teams generate, and more importantly, share revenue. And I do think MLB owners want a salary cap and will eventually get one. All they need to do is convince enough union members that a cap will make more members more money than they are making now and it will happen.