While the current CBA between MLB and the MLBPA doesn’t expire until December 2026, it’s not too early to look ahead to some of the issues that will undoubtedly shape the negotiations between the two sides. Given the tenor of the last round of bargaining combined with the game’s history of lockouts and strikes, it would be naïve to expect a smooth and swift process this time around. However, while the focus will be directed at the tension between MLB and the MLBPA, there might be just as much to sort out between the commissioner’s office and the collective owners across the sport.
While MLB’s total league revenue figures continue to grow each year, that revenue is not shared equally across each of the 30 franchises. The reality of revenue and payroll inequity is nothing new in the game and it’s no secret that teams like the Yankees and Dodgers have far more resources available than the Pirates and Rays. This is especially relevant given MLB’s lack of a salary cap compared to the other major professional sports. While the commissioner’s office and each of the respective owners will continue to push for some form of a salary cap in future CBA negotiations, there’s little reason to believe the MLBPA will ever concede such a momentous action.
Nonetheless, recent developments in the sports media landscape could prove to be a major source of contention among baseball’s 30 owners.
In today's media environment, television networks have been facing an accelerated rate of cord-cutting in recent years as consumers opt for streaming services. Despite maintaining stable ratings, as live sports often do, regional sports networks (RSNs) have felt the brunt of the shift away from cable. Chief among these RSNs is Diamond Sports Group, the parent company of FanDuel Sports (formerly Bally Sports), which just two years ago carried the rights to nearly half of the MLB clubs. In March 2023, Diamond filed for Chapter 11 bankruptcy protection, casting doubt on the company's ability to broadcast games moving forward. Eventually, Diamond emerged from bankruptcy and will continue to broadcast games for a handful of teams in 2025, but the lengthy saga created a lot of discussion about the future of how fans consume MLB.
I’ve written for multiple years now that one of MLB’s goals is to create more a national product that would address the local blackout problem through in-market streaming. MLB.tv is a great product that many leagues are envious of. However, without control of broadcast rights, many fans have been “blacked out” from watching certain games. Progress has been made on this front over the last couple years, but the issue is far from obsolete as we head into 2025.
To that point, Rob Manfred formally announced earlier this offseason that MLB plans to create national packages for major streaming companies to bid on in 2028, the year that the league’s national television deals with ESPN, Fox and Turner are set to expire. To do so, the commissioner needs as many of its teams’ local media rights available as possible by then to bundle them together for potential platforms. Manfred ultimately wants the league office to take over teams’ local media rights — the traditional, linear TV rights, as well as the in-market, direct-to-consumer streaming rights, both of which currently belong to the individual clubs.
The league already has some of their team’s rights in hand as they are already handling the broadcasts for a handful of clubs in 2025. Moreover, the deals for the aforementioned teams returning to Diamond Sports were designed around the goal of being available to MLB three years down the road. As of now, close to two-thirds of the league’s teams appear to have their rights available come 2028, if not more.
However, just because the rights may be available, and some owners would likely be on board with combining the rights of all the teams doesn’t mean every owner will happily turn over theirs. Achieving the changes the commissioner seeks is a difficult task because the worth of media rights varies greatly from small markets to large.
According to Morningstar, the Dodgers make an average of over $300 million per year from their local TV deal with Charter Communications’ Spectrum. The Yankees took home $143 million from its YES platform in 2022. By contrast, several clubs generate less than even $70 million annually from their respective deals. Therefore, why would teams like the Dodgers or Yankees agree to share TV revenues with teams like the Pirates or Rays?
Of the four major professional sports in America, local television deals provide MLB franchises with the highest percentage of their overall revenue on an annual basis (approximately 25%). The nature of the 162-game season provides an unmatched volume of content for television providers to fill programming from early spring all the way into the fall. So, while ticket sales, sponsorships, concessions, and even the national television revenues provide significant revenue streams, the local television deal plays a big role in separating the financial “haves” from “have nots” in baseball.
In an interview on Sirius XM’s MLB Network Radio, Manfred implored that “it’s important to recognize that our clubs should and do act in their economic self-interest.” “If you want to make a change, you’ve got to demonstrate to people that what you’re offering to them is better for them” Manfred continued. “I do think there are a combination of things that for even the very biggest teams, we can demonstrate that for the good of the game over the long haul, it’s better for everybody and better for them.”
One of the ways Manfred can demonstrate this is by showing that the plan will make MLB games more accessible for fans, thereby expanding the reach of the sport across the country and the world at-large. Hypothetically, getting more eyeballs on the product creates avenues to unlock a wider audience and appeal to new demographics that baseball hasn’t unlocked to this point. Therefore, a potential short term financial set back could prove to be offset by long term gains of more invested fans in MLB.
However, Yankees owner Hal Steinbrenner has already hinted that he isn’t fully on board with handing over his team’s rights. “We’ve had discussions with Rob in the past,” Steinbrenner said earlier this offseason when asked about Manfred’s plan. “He knows my take, which is that at the very least, it needs to be an optional thing, but I’m gonna leave it at that. But we’ve got a good board of directors at the YES Network, and we’ve got a good network, and we’re doing pretty good right now.”
Whether or not Steinbrenner is speaking on behalf of every big market club’s owners remains to be seen, but conventional wisdom suggests that Steve Cohen, Mark Walter, or Tom Ricketts won’t be too eager to give up the financial windfall that comes from their respective TV deals. It will be fascinating to see how the tenor of these conversations play out either behind closed doors or potentially through the media as 2026 nears.
So, while the upcoming CBA might very well feature intense bargaining between the owners and the players, don’t discount the tension that will undoubtedly be present between the owners and the owners. Hopefully, a solution that benefits all parties can be reached over the coming years. At the end of the day, the number one goal for MLB and the owners should be to act in the best interest of the game and its fans. Without the fans, baseball is far from an $11 billion dollar industry.
Brendan Bell is a 2L at SMU Dedman School of Law. He can be followed on Twitter (X) @_bbell5
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