NEW YORK — Major League Baseball’s first labor proposal contains an offer from the owners that could, over time, lead to the end of the territorial TV rights system that creates out-of-market “blackouts.”
That might conjure an image for some fans of a long-desired, single service to watch all of their favorite team’s baseball games. But the reality is different and complicated.
The term “blackouts” applies specifically to local broadcasts. If it gets rid of the territory system, MLB indeed might be able to put local broadcasts all in one place. Over time, that could spell the death of the “out-of-market” vs. “in-market” distinction that frustrates many fans.
To watch most ballgames today, you might need a map. If you’re trying to watch a game inside your favorite team’s territory, you cannot watch your team’s games via MLB’s “out-of-market” streaming service, MLB.tv. That creates confusion and sometimes leaves fans without an easy way to watch games.
Beyond those local matchups, an entirely different class of games exists: the national games, such as those on ESPN, NBC or Netflix. For those, fans would still need access to other channels or services. MLB is simultaneously planning to increase the number of games available nationally starting in 2029, while reducing the number of games available locally.
Therefore, no matter what happens during bargaining between players and owners, fans will probably still need several paid subscriptions to watch every game their favorite team plays.
And there are several other key points to understand, too.
The first is that, at least for now, MLB is offering to end local blackouts only if the players accept a salary cap — something players have always said they will not do.
The Players Association believes MLB is attempting to portray the territorial rights system as something the players control, when they do not. Whether the owners would consider eliminating blackouts without a cap isn’t known at this point.
“There are some aspects of media that really don’t involve us, like blackouts,” interim union head Bruce Meyer said Monday. “That’s a function of the way the league has structured its media rights.”
The existing territorial set-up exists mostly for profit. It limits the way fans can watch games, and historically, that exclusivity has helped teams, broadcasters, and the cable and satellite companies that carry baseball channels to make a lot of money. Ultimately, some of that money has helped grow player salaries, too.
But local TV revenues are drying up in many places, leading the league to search for a new plan.
Why are the owners offering this in a cap system? Because with the other financial benefits they’d gain, all the teams are newly willing to share their local TV revenues equally. That’s a radical change, one that commissioner Rob Manfred has said for the last couple of years he wants.
“When you’re centralizing media rights, the focus on local territories goes way down,” Manfred said. “Who cares, right? Because it’s all going into one pot, and it creates flexibility in terms of dealing with the blackout issue.”
Even the big-market teams with the richest TV contracts, such as the Los Angeles Dodgers, appear to be on board.
“I think that the Dodgers understand that there is a need to update the overall economic model in the industry,” Manfred said.
The Dodgers declined comment.
The second caveat is MLB likely couldn’t end blackouts everywhere on Day One in 2027, when a new labor deal is supposed to begin.
The process probably would be gradual, depending on the individual team’s current broadcasting situation. If a team is under a long-term contract that in some way relies on the existing territories, that contract might have to be renegotiated or would simply have to expire.
MLB declined comment Thursday on how quickly it could eliminate the blackouts.
The national pastime
The third key point is that it’s important to understand what an end to “blackouts” would not cover. And that’s exclusive national games.
Let’s review how blackouts operate.
Today, local baseball broadcasts fall into two buckets: in-market and out-of-market, based on geographic territories that MLB controls.
Every MLB team has an “in-market” territory.
If you’re trying to watch the New York Mets while you’re in New York City, you are considered in-market. You would need access to the Mets’ local broadcaster (SportsNet New York) to watch the majority of Mets games. That access comes by signing up for cable, satellite, or a digital provider that carries the channel. Alternatively, a streaming subscription to the station is also available.
But if you’re trying to watch Mets games in, say, Chicago, you are “out-of-market.”
For many years, MLB has sold a package, the aforementioned MLB.tv, that lets viewers watch only out-of-market games for every team. Via that service, the Mets fan in Chicago can watch a ton of games — except when the Mets are playing the Cubs or White Sox, which are in-market teams. Those contests would be blacked out.
But if you’re a fan of a team that’s in-market? In some areas, the problem used to be a lot worse before each team started to offer streaming options.
In Iowa, for example, six teams are considered in-market: the Cubs, White Sox, St. Louis Cardinals, Kansas City Royals, Minnesota Twins and Milwaukee Brewers. That means they’re not available to a fan in Iowa via MLB.tv.
So, if you were, say, a Brewers fan in Iowa back in 2021, your only hope of watching your team’s games was that your local cable or other TV provider carried the Brewers’ channel. If it wasn’t carried, you were out of luck.
But, over the past few years, MLB teams moved en masse to provide a streaming option for in-market local broadcasts. This year, for the first time, all 30 teams can be watched in-market via a standalone streaming subscription. The Brewers fan in Iowa can pay for the team’s channel so long as they have an internet connection.
But then there’s that whole other bucket of games: the national telecasts. Many, but not all, are exclusive telecasts, meaning they can’t be watched on the regular local station.
For example: If ESPN has a game between the Mets and the Cubs, what city a fan is in doesn’t matter — the only way to watch that game is to have access to ESPN. ESPN pays a lot of money for that right.
Exclusive national broadcasts aren’t technically considered “blackouts,” even though the effect is sometimes the same: you normally watch games one way, but can’t do so that way on a given night.
“You’re going to have national exclusivities, but you know, I think about that one a little differently,” Manfred said. “No matter what your setup is in terms of whether you’ve cut the cord — pretty much everybody has access to network television, right? You’re not really blacked out in the same sense.
“(It) becomes a question of discoverability, making sure your fans know that, ‘They usually go to X to get their game. Well, tonight it’s on NBC.’ That’s just a question of discoverability, not a blackout.”
But not all national games will wind up on network TV. Some will likely be on paid services.
“Certainly there are going to be more national games,” Manfred said. “It’s our No. 1 priority in terms of reach going forward.”
