The possibility of landing streaming rights to Major League Baseball games is fueling high interest among bidders for the 22 Fox regional sports networks being sold by Twenty-First Century Fox, with both MLB and Amazon showing interest.
Twenty-First Century Fox is divesting the 22 Fox RSNs as a condition of Disney acquiring many Fox assets, including a movie studio and library, cable networks and more. MLB and Amazon see streaming as a key to acquiring the RSNs, while other entities, like the New York Yankees, are expressing interest in single RSNs, as the team is looking at buying back YES Network, which it originally launched.
Going directly to consumers and bypassing cable networks is the current business strategy du jour for many content heavyweights. Disney has launched a pay streaming service, ESPN+, that includes live streaming of NHL, MLS and USL games for $4.99 a month, and is following up with a Disney+ streaming service focusing on the many family-oriented assets in the Disney library, including classic movies and Star Wars content. (Interestingly, the technology purchased from MLB in the form of BAMTech is being used for the Disney streaming services.) Using an RSN as the basis for a streaming service would open up new possibilities for ad and subscription sales that could also be combined with sponsorships or even season-ticket sales for MLB. RSNs are attractive properties because of the rights they control, not necessarily because of their financial futures as cable channels: a streaming RSN has the potential to attract cord cutters who find paying a higher fee for cable access off-putting, when all they want is a subset of the cable offering.
Acquiring the RSNs will not be cheap: the beginning bid will be $20 billion. From the New York Post:
“Candidly, we’re looking at the RSNs ourselves,” MLB Commissioner Rob Manfred said Tuesday at a March of Dimes luncheon in New York.
An MLB spokesman declined to comment on Manfred’s interest in the RSNs.
Sources said the MLB could attract financial backers for a bid — which it would clearly need, as Fox has set a floor price of $20 billion — with its claims on streaming rights to all MLB games.
There is one potential problem with this game plan: not every agrees with the MLB assessment that streaming rights are controlled by MLB. The Yankees, for instance, have a first right of refusal on YES Network (it currently controls 20 percent), so the pair will need to haggle over pricing. And while Amazon has expressed an interest in acquiring all 22 RSNs, it is reportedly working with the Yankees on a YES Network deal. Amazon may eventually scale back its interest to only the YES Network — but with the Yankees streaming rights as a cornerstone attraction, it could fuel the creation of a streaming YES Network or unroll the games as part of Amazon Prime, as it has done with Thursday night NFL games.