When the lords of baseball took to a Baltimore boardroom Thursday to vote on a new commissioner, the least-heralded candidate carried into the election a most unbecoming title: King of the Blackouts. Much of Tim Brosnan’s candidacy — one he aborted before the first vote was cast — rested on him turning baseball into a $9 billion-a-year monolith as executive VP of business on the back of fat television contracts that leave fans all over the country unable to watch the very sport he’s in charge of selling to the public.
The fact that baseball owners revere this – that a sport hemorrhaging young fans actively chooses to black out local television games across the country in order to protect the supposed sanctity of the local TV deals that go into the billions – speaks to a certain tone-deafness. Consider the hilarity of the rogue candidate for commissioner, Boston Red Sox chairman Tom Werner, selling himself as the person who will spread the game best. The impetus behind Werner’s candidacy is the Red Sox want to tilt the revenue sharing of their huge TV deal even more in their favor.
And so as Rob Manfred, the lawyer who has fostered two decades of labor peace, wonders whether he can whip the 23 votes necessary for his coronation, the specter of baseball’s largest economic force casts a monstrous shadow over the proceedings. It’s all about TV now, even as the Dodgers go through a first-place season with barely a whisper in Los Angeles because they’re on so few TVs, as the Astros continue to put up 0.0 ratings because their attempt at a big-money local-rights deal ended up in bankruptcy court, and especially as the latest ruling came down in the case that continues to poke holes in baseball’s arguments why it makes sense to keep fans from watching games.
Late last week, a New York judge denied MLB’s motion for summary judgment in an antitrust lawsuit that contends the league’s blackout rules, guided by an antiquated territorial-rights map, should be overturned and free tens of millions of fans to watch games. Even as MLB wielded its antitrust exemption – a strategy it uses infrequently – the judge smacked aside its arguments as to why fans in Iowa can’t watch six teams, those in Las Vegas are barred from a half-dozen others and non-major league cities elsewhere around the U.S. get a black screen when they’re just trying to watch a ball game.
The ruling paved the way for a trial, though MLB lawyers on Tuesday filed an interlocutory order, hoping Judge Shira Scheindlin would separate MLB’s case from those against the NHL, Comcast, DirecTV and others, based on its antitrust exemption. Seeing as Scheindlin spent dozens of pages in her opinion firmly dismissing the applicability of the law to a case involving broadcast rights, such an appeal is a long shot. While the exemption is written to cover items “central to the business of baseball,” Scheindlin declared TV rights not so – a curious opinion, certainly, but one that brings the sport one step closer to abolishing the repugnant relationship between baseball and the companies that distribute its games.
The most odious portion of Scheindlin’s opinion came when she wrote about MLB’s attempt in 2008 to change its territorial-rights map and allow those in dead zones to watch its game. Comcast’s regional sports networks sent a letter to MLB that said if the league dared “to adopt any new MLB rule permitting MLB Extra Innings and/or MLB.TV to be distributed in unserved or underserved” areas, Comcast RSNs would explore “all of their respective rights and remedies with respect to any change in MLB’s current rules and practices that negatively impacts the clubs’ respective home television territories and the breadth of the exclusive rights heretofore granted to their corresponding Comcast RSNs.”
In other words: Change the rules, and we’ll sue. The same went for other RSNs, which former MLB COO Bob DuPuy said in a deposition would “insist” on “changed circumstances” clauses that would pay teams less if the territorial rights evolved.
Everyone is to blame for the blackouts. Baseball knew exactly how its territorial-rights map read, what it represented and why it mattered to TV stations. Having an exclusive area meant companies could hold leverage over a wide swath of TV viewers. If local games were available only on local distributors – whether that meant Time Warner or Comcast or the local DirecTV – that would mean they were part of a television package that can climb well above $100 a month. Offering games a la carte – or putting local games in national packages like Extra Innings or MLB.tv – could incentivize viewers to stay away from costly monthly charges and just drop $130 to $140 for baseball alone.
Baseball argued RSNs would stop operating without territorial rights, a notion so absurd that Scheindlin didn’t mince words in whacking it aside: “These arguments are far from compelling. Just because plaintiffs do not directly challenge the legality of the [out-of-market] packages and national broadcasts does not mean that preserving them is sufficient justification for the territorial rules.”
While this wasn’t an O’Bannon v. NCAA route, Scheindlin actively destroyed nearly every argument the league made, from the current rules promoting better production values to baseball’s competitive balance depending on territorial rights to the number of games on air going down should the rules change. The best argument in baseball’s favor is that it’s doing what it can to make money, and that its revenues would plummet if mega-TV deals no longer were so appealing to RSNs.
Surely, of course, baseball could find a way to package all of its games to all of its fans in the sort of fashion that eventually brings back whatever business it might lose in the short-term. The league’s gravy train chugs along too well for MLB to actively derail it.
So it’s going to take some fans and a judge who believes the current rules are anticompetitive and that “clubs in each League have entered an express agreement to limit competition between the clubs – and their broadcaster affiliates – based on geographic territories. There is also evidence of a negative impact on the output, price, and perhaps even quality of sports programming.”
All of it is sinister, all of it in the name of the dollar that had Brosnan one election away from the commissioner’s chair. He did his job and did it well, fattening owners’ pockets and avoiding an outcry about the ridiculousness of these policies. The same sort of policies Werner espoused as his partner with the Red Sox, John Henry, testified the “primary benefit” of territorial restrictions is “not to have to compete with other clubs or with baseball itself in your home television territory.”
In other words, to monopolize an entire part of the country, in the name of cable and satellite companies everywhere. In the meantime, Werner helps head the coup organized by White Sox owner Jerry Reinsdorf and Manfred hopes to avoid a stalemate that stretches this process any further. What Brosnan would do was anybody's best guess. His decision to make it a two-man race came as a surprise. As usual, he left a wide swath of people in the dark.
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- Shira Scheindlin