We haven’t exactly entered baseball’s nuclear winter yet. That’s still about two weeks away, with the Dec. 1st deadline of the current CBA expiring and everyone expecting a lockout the next day. While some “connected” writers have claimed that “sources” have told them that negotiations so far are a rocky place where an accord can find no purchase, what that really is is owners bitching that the players aren’t just rolling over in these negotiations. Every proposal we hear from the owners is more ridiculous than the last, from a salary floor that is miles too low, to a lowering of the tax threshold, to arbitration being tied to a flawed bWAR system, to free agency not happening until players are basically through their prime. None of this is moving negotiations forward, and the players know it. So should everyone else.
And now the players might know that they have another pressure point to squeeze, because it might be that owners are trying to ram through these Dickensian proposals as their RSN money might be drying up or greatly altering come the summer.
Bill Shea of The Athletic has a thorough look at the trouble that Sinclair’s RSN wing, Diamond Sports Group, is in. The whole thing is very much worth your time. Stop me if you’ve heard this before, but the gist is that Sinclair soaked up Fox’s regional sports channels in a highly-leveraged deal, and now that debt is knocking on the door with bat in hand as RSNs continue to lose value thanks to cord-cutting and streaming. There are whispers, and maybe even louder utterances than that, that Diamond could go bankrupt in the middle of 2022.
That doesn’t mean that teams that have Sinclair RSNs broadcasting their games, now under the banner of Bally Sports, would simply just go off the air in the middle of the night, never to return. Teams have reserves of cash, but we know how they feel about using it, and who really pays for it when they even have to flirt with not making gobs of money. That’s the players on their team, who soon find themselves not on that team anymore. Which in turn means the fans pay by having only circus clowns and stray dogs to watch.
However, not having games to broadcast come the spring would really put the squeeze on Diamond/Sinclair, and the teams that have Bally as their broadcaster, as well as those who partner with Sinclair for their own channels like the Yankees and Cubs. If there are no games, fans are even less likely to pony up for cable packages that are outsized thanks to the charges RSN enforce on cable companies. Becoming clearer why teams are cozying up to gambling sites as quickly and as nakedly as they can?
Suddenly, it feels like if the lockout gets pretty close to March 31st, it isn’t just the players who might start sweating missing their salary. Diamond being pushed closer and closer to the brink is going to have nearly half the teams in MLB shitting bricks.
It isn’t all doom and gloom for those 14 MLB teams, as Shea points out. If Diamond were to go to the wall, those teams could buy back their rights for basically nothing, and try to resell them to someone. To whom, exactly, is the question, because RSNs aren’t going to get any more valuable anytime soon. No one can figure out what sports broadcasting on the local level is going to look like in the next five years. This is why the NFL remains Godzilla, because it doesn’t have to put up with any of this shit, thanks to only national broadcast deals.
And the MLBPA can split the owners here. It’s not even half of the teams that will have this problem, but it’s more than enough teams that the rest can’t ignore. MLB isn’t going to be able to try and just come up with some scheme where everything is just on MLB.TV, because too many teams have TV deals that aren’t going belly-up and there are still enough fans with cable that aren’t going to just traipse over to paying for another package to watch baseball. This is yet another issue of baseball’s fandom getting into the horse racing/boxing demographic of “altacocker.” It’s not exactly a generation of people that will happily and willingly and understandingly pick up a streaming app.
It’s yet another crunch to these MLB negotiations, and yet another example of how MLB owners couldn’t see the $5 they could have made in the future over the $1 that was right in front of their faces. It’s been known for years that RSNs were in trouble, as cord-cutting became more and more the norm, and yet they didn’t do anything about it. It should be noted that there are a gaggle of NBA and NHL teams that are going to have this issue too, but baseball is the one that’s always had the most passionate relationship with RSNs. Just looking around at a sample, the Diamondbacks get some $80 million a year from Sinclair. The Braves got north of that and were counting on their deal rising to $113 million in the next few years. The Cardinals get somewhere around $100 million per year. This is obviously antihistamine money (not to be sneezed at... yes I spent my youth in an OTB, why do you ask?).
It would be wise for the MLBPA to keep this in mind as both they and the owners plow through this CBA wasteland. The players might find even more precious juice on the other side of it.