Major League Baseball announced that it will take over the distribution of local broadcasts for the Twins, Guardians and Brewers in 2025.
All three of those clubs previously had deals with Diamond Sports Group, which owns the Bally Sports Networks. But those deals all expired after 2024, and it was reported this week that Diamond is planning to make cutbacks to the number of teams on its MLB slate. MLB will now handle the broadcasts of at least six clubs, as it was already distributing for the Padres, Diamondbacks and Rockies.
Fans will be able to sign up for direct-to-consumer streaming packages without blackouts, except for games that are being broadcast nationally. The Rangers also saw their Diamond deal expire in 2024 but seem in a different situation now. MLB announced that Texas wouldn’t continue with Diamond but is exploring local options for 2025.
The Regional Sports Network model has been decaying for many years, and this news is the latest part of the crumbling. For years, broadcasters paid clubs for the right to have exclusive local broadcasting rights, which often led to frustration among fans. Baseball games were harder to access, and some fans found themselves in the blackout areas of multiple different teams. However, these deals were a significant source of annual revenue for teams.
However, as consumers cut cords and move away from buying cable packages, the model has become less effective, and several deals have already fallen apart. Diamond has been going through the bankruptcy process since early in 2023. As mentioned, the Padres, Diamondbacks and Rockies didn’t have a local broadcasting deal for 2024. The Padres and Diamondbacks had previously been with Diamond, while the Rockies were with AT&T SportsNet Rocky Mountain. Fans in those markets could pay MLB directly to watch the team in 2024, with no blackouts, for $19.99 monthly or $99.99 for the year. Dan Hayes of The Athletic relays on X that the Twins will charge a similar price next year.
While that was a nice development for many fans, it wasn’t good for the teams. By all accounts, the revenue generated from this model is lower than what the clubs previously received from the cable model, as the latter led to a passive stream of revenue from fans who signed up for cable packages but didn’t watch much or any baseball. The direct-to-consumer model cuts out the middleman but depends on active fan interest.
Tuesday’s announcement says that the “reach” of the Guardians via RSN was 1.45 million homes, with the Twins at 1.08M. The league relays that between four and five million homes will now have access to their local clubs via these streaming options, but not all of them will sign up and it’s unclear what sort of rates are to be expected. Twins president Dave St. Peter expects the club to receive less broadcast revenue in 2025, per Aaron Gleeman of the Athletic on X, though he added that he expects greater revenue in the future.
In short, the move is good for fans simply watching the games. But since it’s bad for the teams on the business side, it could have spillover effects into roster construction. Last offseason, declining broadcast revenue seemed to have significant ripple effects regarding transactions. For instance, the Padres trading Juan Soto to the Yankees seemed to be motivated by the Friars need to make budget cuts. Teams like the Rangers, Twins and others either cut their payrolls or didn’t raise them as much as expected, which led to certain free agents having fewer suitors than anticipated and a weak market for free agents in general.
Whether this will immediately impact the Twins’ decisions, Guardians and Brewers will remain to be seen. The Twins cut their payroll significantly a year ago due to uncertainty with Diamond. There was seemingly some chance of the deal collapsing before the Twins re-signed for another year but with reduced fees. Per Cot’s Baseball Contracts, the payroll went from $154M in 2023 to $127M in 2024. Per recent reporting, the club isn’t planning further payroll cuts, but it doesn’t appear that an increase is coming either. Per Gleeman on X, St. Peter doesn’t think this news impacts the payroll relative to those recent reports, as the club already knew this was coming.
The Rangers appear to be exploring a different path. Last month, it was reported by Tom Friend of the Sports Business Journal that the club is looking into developing their own direct-to-consumer streaming service, independent of MLB. Presumably, the benefit to handling it themselves would mean they reap more direct revenue, but they would also spend more on the day-to-day costs of running the operation. If they eventually find this path too challenging, it seems fair to assume that letting MLB take over would be a fallback option.
Uncertainty around the broadcast situation seemed to impact the Rangers last year. Though they won the 2023 World Series, they followed that up with a relatively modest offseason, not signing any deals larger than the two years and $22M they gave to Tyler Mahle. How their current plan will play out perhaps has even less certainty than the other three clubs, so it will be an interesting situation to watch.
There will be other long-term questions to be answered in time. Commissioner Rob Manfred intends to market a streaming package consisting of multiple teams at some point in the future, perhaps as soon as 2025. MLB.TV has existed for years, but consumers are affected by local blackout rules. Going forward, the idea would be to make a blackout-free version of MLB.TV. There would be complications in such a plan, as clubs like the Yankees, Dodgers, Cubs and others handle their own games via broadcasters that are at least partially owned by the team. Given their relatively stable footing, they would have less interest in joining such a plan with the other clubs.
As for Diamond, they had deals with 12 clubs in 2024. It was recently revealed that they are only fully committed to one for 2025, Atlanta. As part of last week’s reporting, Diamond was willing to renegotiate with other clubs but wanted to pay reduced fees. It seems that won’t happen with the four clubs mentioned in Tuesday’s announcement so that the Diamond slate will be down to a maximum of eight clubs in 2025, but perhaps that will go even lower if some others decide to make a deal like this with MLB instead.