Commissioner Rob Manfred hints at possible end to MLB streaming blackouts in wake of Diamond Sports bankruptcy

DUNEDIN, FLA. – Rob Manfred has imagined baseball's future on television, and it's both daringly revolutionary — and delightfully simple.

"I hope we get to the point where, when you go to MLB.tv, you can buy whatever the heck you want," baseball's commissioner told reporters Thursday. "You can buy an out-of-market package. You can buy local games. You can buy two sets of local games. Whatever you want!"

As straightforward a business model as this sounds, it's not possible now in most places, because of arcane blackout rules instituted decades ago by MLB, and because the regional sports networks (RSNs) that carry them have largely been unable to find a way to reach cord-cutting viewers who no longer subscribe to cable or satellite TV.

But those crises might ultimately be solved, and Manfred's vision of baseball's TV future codified, by another looming crisis. Diamond Sports, a subsidiary of Sinclair Broadcasting that owns Bally Sports North and 17 other similar networks, appears headed for bankruptcy, having failed to make $140 million in interest payments due last week.

It seems like a disastrous situation for the Twins and the 13 other major league teams broadcast on Bally Sports networks — but Manfred hinted that MLB is not only ready to step in and broadcast games if Bally is unable to, but eager to do so.

"I don't relish any of this," Manfred said — but then he began outlining the advantages that baseball fans might be thrilled to reap. "From a fan's perspective, though it may not be whatever channel is your traditional RSN, if you think about it from a reach perspective, the games being available digitally in-market is something fans have been screaming for for years."

Yes, baseball has a huge infrastructure already in place to provide digital streams of games directly to consumers, which it does for fans who want to watch teams that aren't local to them. Twins fans in Utah, for instance, can subscribe and inexpensively watch Bally Sports North's broadcast on their mobile devices or TVs, but Twins fans in Minnesota can only do so by subscribing to cable, satellite or a tiny number of digital carriers.

That's because RSN contracts, most of which pay tens of millions of dollars to their teams, come with exclusivity clauses that allow no other broadcasters to make a team's games (save a handful of national broadcasts) available in that team's "territory," a broadly defined area that in many cases far exceeds each network's reach. In one of the most notorious cases, Iowa is designated as within the home territory of the Twins, Royals, Cardinals, Brewers, Cubs and White Sox, meaning that Iowans who subscribe to MLB.tv's streaming service will not be able to watch any live games involving those six teams, home or away.

But if bankruptcy wipes out Sinclair's Bally networks, which are in debt by more than $8 billion, according to MLB?

Baseball sees a well-timed chance to change the business model.

"The blackout issue has been a concern for a number of years. Some of it, maybe a lot of it, was built into the structure of the RSNs [but] the issue has become more acute in the last few years," Manfred said. "And our aggressiveness with respect to stepping in, in the event that Bally can't broadcast, was driven in part by the fact that we saw it as an opportunity to fix the blackout."

Sports networks, and not just the Bally-branded ones, have reached a crisis point because they were designed for the cable era. Bally Sports North, which broadcasts Twins, Timberwolves, Wild, Lynx and some Gophers games, charges a small monthly fee for each subscriber to cable (like Comcast in Minneapolis) or satellite (like DirecTV) systems that carry it, which the carriers then pass on to consumers.

Trouble is, fewer households subscribe to those systems each year, choosing instead to stream programming though online services, most of which have been willing to pay that fee.

"The combination of [factors] made it clear to us some months ago that there was going to be a serious problem here, that they were likely headed to bankruptcy and that we needed to be prepared. We have taken those preparation efforts really seriously," Manfred said. "We know that we can produce games in the event that Bally is not broadcasting. We know that we can put those games up, in conjunction with mlb.tv, digitally. And we are in the process of trying to work out arrangements that will put us in position to make those games available within the cable bundle as well."

The Twins are estimated to have earned in the neighborhood of $50 million per season — neither the team nor the network will reveal the specific figure — from BSN under a contract that expires at the end of 2023. The pending bankruptcy poses significant problems for the team, both from an unhappy fan base cut off from the broadcasts and from the loss of that revenue.

Manfred, however, said MLB is ready to help limit the lost income.

"There could be revenue losses for individual teams. You can assume when stepping in, we will do everything possible to generate revenue in each local market that we will pass through to those clubs, at least as an interim arrangement," the commissioner said. "You know, we have a pretty good balance sheet in central baseball, and it's safe to assume we will provide every support that we possibly can to those clubs that are at risk."