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MLB-Fox talks on live streaming hit a slowdown

Fox Sports’ local streaming talks with MLB have hit a snag, putting a crimp in a years-long negotiation that had picked up in recent weeks, according to several sources.

As little as three weeks ago, both sides believed that a deal was close. But talks cooled as Fox Sports simultaneously was negotiating long-term local TV rights extensions with two of its teams: the St. Louis Cardinals and Arizona Diamondbacks.

The Diamondbacks’ deal with FS Arizona ends after next season, and the Cardinals’ deal with FS Midwest runs through 2017. Fox Sports and the teams wanted to open those agreements early to work out long-term extensions. A Fox Sports source said it doesn’t make sense to cut long-term rights deals in the current media landscape unless they include streaming rights.

As a result, Fox Sports has put its renewal negotiations with the Cardinals and Diamondbacks on “a slow track” until a leaguewide local streaming deal can be worked out with MLB, a source said. Fox is not able to cut any streaming deals with individual teams until it reaches an agreement with MLB.

Fox Sports declined to comment.

As part of their national TV deals with MLB, ESPN, Fox Sports and Turner have the rights to stream their games. But MLB historically has not wanted to grant those same rights to regional sports networks. MLB has believed that the live look-ins and alerts already available from its At Bat app mitigates the need for local streaming deals.

The hiccup in Fox and MLB’s current negotiations quells the recent momentum to fashion a local streaming deal after several years of fruitless talks. Discussions picked up over the summer, and the two sides hammered through several contentious issues, suggesting that a deal was close.

One of the biggest roadblocks — the value of local streaming rights — was averted when Fox and MLB agreed on price, said to be in the low eight figures in total for Fox’s 15 RSNs that hold baseball rights, sources said.

The feeds would be authenticated and part of the cable industry’s TV Everywhere initiative. Fans would not be allowed to buy individual games.

But there has been little agreement on more technical details, like where the streamed games would be hosted. Fox Sports, which holds the local TV rights to 15 MLB teams, wants to host the streams itself and make them available with all of its other streamed programming via its Fox Sports Go application. MLBAM, which has built a sizable business live streaming its own content as well as for a variety of third-party clients, also wants to host and manage the streams.

Still, league executives believe a streaming deal will help advance the broader notion of baseball being available at any time on any device.

“We’re closer than we’ve ever been,” said Bob Bowman, MLBAM chief executive. “We’re having a deep and honest conversation with Fox, and we’re hopeful we’ll have something for the 2015 season.”

Talks between Fox and MLBAM got serious around the All-Star break in July, after several team owners, notably including Boston Red Sox owner John Henry, worried that they were losing revenue from the lack of a streaming deal and agitated for an agreement to be worked out. Fox does not hold the rights to Red Sox games; NESN does. But Henry apparently believes that a Fox deal would be used as a template for other RSNs.

Negotiations have been led by Randy Freer and Eric Shanks on the Fox side, and Bowman and Rob Manfred, MLB chief operating officer and commissioner-elect, on the MLB side. Sources said Manfred has been particularly engaged on the issue and has attended every meeting between the two sides.

Still, all sides say they are optimistic that a deal can be worked out by the start of next season. Nationally, Fox is streaming authenticated feeds for the World Series for the first time, and sources said the agreement has been helpful in moving along local streaming conversations.

“[Fox] doesn’t want to do this to just check off a box,” Bowman said. “They want to serve the fan, and so do we.”

NBC Sports Group, which runs the group of Comcast SportsNet RSNs, is an interested observer in the Fox Sports-MLB negotiations. NBC Sports clearly wants local streaming rights, too, but is not as engaged in these negotiations as Fox, sources said.

The slow pace of negotiations with MLB comes as Fox Sports gets ready to start the second year of a three-year streaming deal with the NBA. This season, Fox Sports plans to have streaming services up and running with 16 of the 17 NBA teams to which it holds rights, thanks to deals it has cut with distributors such as Time Warner Cable, Charter, Cox and Cablevision.

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