A bleary-eyed Bob Bowman acknowledged that he, and many others involved in the Garber vs. MLB lawsuit regarding baseball’s broadcast territories and blackout rules, didn’t get much sleep over the Martin Luther King Jr. holiday weekend. But marathon negotiating sessions produced a settlement that represents perhaps the largest shift in how baseball distributes its content since the advent of live video streaming more than a decade ago.
The settlement, after three years of litigation regarding baseball’s long-frustrating broadcast rules, contains four key components: price reductions in MLB’s out-of-market subscriptions, MLB.TV and Extra Innings; the creation of a single-team subscription option for MLB.TV; a pathway for regional sports networks owned by DirecTV and Comcast to join Fox Sports and offer authenticated in-market live game streaming; and the creation of a Follow Your Team option in MLB.TV that allows for a limited breakthrough of current blackout rules.
Owners last week were briefed on the settlement, which was struck minutes before a trial was due to begin Jan. 19 in the U.S. District Court for the Southern District of New York. Bowman, MLB’s president of business and media, hailed the compromise that offers fans lower prices and more options, and maintains the regional sports network economic model that represents a financial bedrock for the sport.
“We have a complicated but important business model, and that was preserved,” Bowman said. “At the same time, we’ve always tried to put customers first, and this is a good solution that both sides worked really hard to develop that offers more for fans.”
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“We have a complicated but important business model, and that was preserved.”
— Bob Bowman, Major league baseball
Photo by: GETTY IMAGES
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Bowman said it remains unclear how many fans will opt for the new single-team option of MLB.TV, which at $84.99 for the 2016 season is not a drastic difference from the full league out-of-market package at $109.99, down from $129.99 last year. MLB.TV purchase history shows the vast majority of fans opt for the highest-level offering. But the idea of increased choice for consumers is critical, and was a core element of the Garber lawsuit. The single-team option mirrors offerings now available for the NHL and NBA with their out-of-market subscriptions.
The Follow Your Team component, meanwhile, represents a new element for any major U.S. sports league. The offering, slated to debut by early July, allows fans to select a favorite club when subscribing to MLB.TV and watch that team’s broadcast, even when they are playing a local team. For example, a Boston Red Sox fan living in New York City will now be able to watch NESN broadcasts of the Red Sox when the club plays the New York Yankees or Mets, games that previously would have been blacked out to protect the YES Network or SNY.
The Follow Your Team offering requires a $10 surcharge to the MLB.TV subscription price, as well as fans also subscribing to their local regional sports network. But it also presents some targeted relief to particularly hard-hit areas such as Las Vegas and Des Moines, who are now blacked out of as many as six clubs in their out-of-market packages. MLB Commissioner Rob Manfred at the conclusion of last week’s meetings called the Garber settlement “perhaps the biggest piece of good news” coming out of the session.
“Antitrust litigation, when it’s settled, is always good news,” Manfred said.
The court must still formally approve the settlement deal. But once that happens, MLB Advanced Media will have its hands full, particularly with Follow Your Team, marketing a fairly complex and nuanced product to the general public.
Bowman, however, said he was looking forward to the opportunity to “learn a lot” about new consumer purchase and usage patterns within the expanded menu of offerings to watch MLB games.
Attorneys for the plaintiffs said they were pleased by the results achieved after the extended litigation.
“This is a meaningful step forward,” said Peter Leckman, partner with Langer, Grogan & Diver, a Philadelphia-based firm that represented the plaintiffs. “There is real relief coming out of this for consumers.”
