Sizing up the MLB contract situation

Here’s the way I see things heading into MLB’s rights renegotiations:

• Fox’s decision to hand over Saturday nights to sports, of which MLB plays a key role, may have MLB thinking of moving its main broadcast package to primetime full-time. As the only entity of sufficient stature that can fill the time all summer, MLB would have to be something close to the lynchpin of any effort to turn a network’s entire Saturday primetime schedule to sports. One problem: Fox and ABC would have to postpone the start of their primetime college football schedule to October, and NBC is lacking in sports it can plug in the rest of the year. The state of MLB’s infamous blackout restrictions that prevent out-of-market Fox games from appearing on Extra Innings may affect this as well.
• With the NFL likely not selling a Thursday Night package in the near term if ever, MLB is in the role of kingmaker, potentially singlehandedly deciding Fox and NBC’s chances of running down ESPN. MLB is NBCSN’s best hope for increasing its reach and popularity, and along with NASCAR, is the other sport that will play a key role in Fox’s eventual decision whether to start a network.
• Despite all this, the fact is that MLB’s status overall isn’t that great. For a variety of reasons, MLB isn’t succeeding at all at connecting with younger audiences. In particular, I think Fox kinda wants to get out of the sport that was always an odd fit for their brand and interrupts their highly successful primetime schedule considerably during the fall.
• TBS’ postseason coverage seems to be working out fine, but it’s hamstrung by the utter failure of their Sunday afternoon package, which last year wasn’t even attracting as many viewers as a freaking Formula 1 race. Of course, we’re comparing cable with broadcast, and part of the problem is that TBS is blacked out in home markets and gets second choice after ESPN’s Sunday night package, but it also has to do with a glut of sports on broadcast and cable weekend afternoons, and the fact remains that for most people, baseball means Fox and ESPN all year long, and then abruptly and inexplicably moves to TBS when the postseason hits. My feeling is that MLB won’t try to include that Sunday afternoon package in this round of negotiations, instead giving it to MLB Network and splitting up ESPN’s games. Most analysts seem to think MLB will create a Sunday/Wednesday package and sell the Monday package solo, but selling the Sunday package solo and packaging Monday and Wednesday together makes more sense to me, because Sunday seems to be the marquee package with exclusivity and no other games in the time slot, similar to the relationship between TNT’s Thursday NBA games vis-a-vis ESPN’s Wednesday and Friday games.
• Complicating matters even more for TBS, ESPN desperately wants back in the postseason. That will probably force MLB to find a way to juggle the postseason between two cable partners and MLB Network. Analysts are predicting that the LCS currently airing on Fox will join its sister on cable; perhaps the arrangement will be similar to how the NBA shuffles its conference finals between TNT and ESPN.
• The All-Star Game has been an especially odd fit on Fox, and last year actually lost in the ratings to NBC’s America’s Got Talent. My hunch is that it will move to cable, probably ESPN.

Putting all this together, I see only three potential outcomes:

NBCSN and ESPN split the cable contracts, NBC gets the World Series. There’s so much that fits about this, even beyond NBC’s desire to improve the status of NBC Sports Network: NBC’s primetime has been mired in last place for ages, so it has less to lose during October than the other broadcast networks do, plus NBC generally has a weaker sports profile overall. Also, it would mark the return of Bob Costas to baseball coverage people would actually watch.

I would expect NBC, more than any of the other contenders, not to settle for “second-class” cable status in any way. I would expect NBCSN to get a share of the postseason, including LCS games, and possibly even the Home Run Derby. There’s no way to really avoid conflicting with hockey on NBCSN in April and into May, but the Sunday package would work out better for that purpose. Meanwhile, golf and horse racing could pretty much force the broadcast package into primetime.

The biggest problem is probably that even there, NBC would run into conflicts with the Stanley Cup Final on one Saturday night a year, plus occasional West Coast US Open golf tournaments NBC would rather allow to leak into primetime. A bigger problem could be that this would involve MLB jettisoning two partners at once, which could be a bridge too far for them. That could be enough for them to back away in favor of…

ESPN and TBS split the cable contracts, ABC gets the World Series. This might be the most comfortable option for MLB, shacking up with the two most established sports broadcasters on cable in a mirror of the NBA’s relationship, but it would be disastrous for anyone who wants a competitor for ESPN. It would certainly produce some happy faces in the offices of the Walt Disney Company, not only by shutting out any potential competitors and winning World Series rights but mitigating the loss of one or two nights to TBS with the addition of the broadcast package. I wouldn’t be surprised if ESPN were trying to form an alliance with Turner to make this happen.

The only people this would make happy outside Bristol and Atlanta might be people who want to stem the death of sports on ABC. Because of the restrictions of MLB’s anti-trust exemption and MLB’s own desires, neither ESPN nor TBS would be able to move the World Series to cable, and I don’t think either CBS or MLB want a relationship between those two to fill the broadcast contract, despite its popularity with MLB’s own audience – CBS has US Open tennis in September, SEC football in the rest of the month, golf the rest of the year, and “America’s Most Watched Network” in primetime to avoid disrupting in October. ESPN would be fine with putting the World Series on broadcast and giving ABC a regular-season broadcast package because ABC’s primetime in recent years has become increasingly weak, coming dangerously close to falling to NBC’s level, and like NBC, ABC has an infamously weak sports portfolio. I could see ESPN airing a regional ABC game on its cable network, similar to what it does for college football, though only in primetime.

All things considered, though, I don’t see this happening; the most recent contract, to me, ultimately amounts in the grand scheme of things to a way for TBS to transition out of its old Braves games. MLB might be more comfortable if…

FX (or the proposed Fox Sports network) and ESPN split the cable contracts, Fox gets the World Series. Given Fox’s desire to increase the presence of sports on FX, this is the only way I see Fox staying in the sport – from both Fox’s end and MLB’s. When the Sports Business Journal wrote an article on the Fox Sports network speculations, they cited as one key factor MLB telling Fox they needed to “establish a better cable sports presence” to compete with NBC and ESPN. I don’t know whether that says more about NBC’s chances, Fox, MLB, or FX. (Or Turner, for which it might be even worse news than it is for Fox, both in the fact they weren’t even mentioned and in what it implies MLB is looking for.) In any case, while Frank the Tank suggests that big-time sports leagues like MLB would rather be on a network with other draws, whether other big-time leagues or general-entertainment programming, and cites that as a big obstacle to both NBC and Fox’s all-sports networks vis-a-vis ESPN and Turner, this little piece of information suggests otherwise.

This is the closest outcome to the status quo, and it’s hard for me to find convincing points against it – if Fox ends up launching an all-sports network. It was harder for me to see this happening when it involved FX getting games, because of FX’s inability to raise the fees it charges to cable providers. To my knowledge, however, a Fox Sports network wouldn’t have that problem, so the only real issues left are the ones laid out in the opening of this post.

The most likely scenarios are the ones involving NBC and Fox, with TBS being an outcome of last resort if Fox decides not to launch an all-sports network and Turner’s desire to stick with baseball combined with ESPN’s desire to keep NBC from approaching their level are enough to keep NBC out of the sport. Before Fox’s network dreams came to light I would have considered the TBS/ABC scenario the second favorite, and normally I’d say ESPN could completely box NBC out of the market – besides Turner, an alliance with Fox makes sense even with their network ideas because of their established relationships with MLB – but I think NBC is willing to overpay considerably on possibly their last, best hope to establish NBCSN’s bona fides, and I think NBC can provide a high-quality enough broadcast to overcome any qualms MLB might have over NBCSN.

I keep going back and forth on which scenario is more likely; it’s hard because the MLB contract will influence whether Fox starts a network, but the existence of a network will determine whether Fox gets the contract. That may be one reason why they’re trying to renew the NASCAR contract early, which could be a bellweather for the outcome of the MLB talks if it’s announced first. If Fox doesn’t launch a network, I think it’s probable that NBC ends up with the baseball contract, dependent on the outcome of an ESPN-Turner alliance. But if they do, or even if they haven’t decided yet? Then the race is on as Fox and NBC wage a fierce (and expensive) battle to determine which will move on to take on ESPN, with Fox being the slight favorite if they have decided and NBC a slight favorite if they haven’t.