Making Sense of the PEBA’s New Media-Rights Deal

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Updated: July 14, 2016

Ken O’Brien, Smallball Times

Asheville, North CarolinaNovember 6, 2023: The PEBA announced on Monday that it had struck a four-year, $8 billion media-rights deal with its global television partners in North America, Asia, and Europe. This agreement will have far-reaching effects on everything from how teams are put together to how you consume professional baseball.

Currently, the PEBA’s television partners combine to pay the PEBA around $600 million annually for the rights to broadcast games nationally in their various nations, and individual teams negotiate locally for additional media revenue in their respective markets. Under the terms of the new deal, which will take effect during the 2023 season, these television partners will pay a little over $1.6 billion annually, so the new deal represents a roughly 267 percent increase in the amount of money flowing into the league’s coffers. We should keep in mind that this new deal is meant to be a comprehensive media-rights deal, subsuming the 32 individual local media-rights agreements that the league’s clubs formerly had, with more local advertising revenue being captured by the league and distributed to the member clubs on an equitable basis.

Everybody wins, though some win more than others. Because local media contracts have been eliminated under the new deal, large market teams will see less of a bump in revenue than the clubs playing in smaller and more non-traditional baseball markets.

It has been widely understood for the last month or two, since word got out that the PEBA was reexamining how it approached media-rights, that the new deal would raise eyebrows; the only question was how big the numbers could get. Ratings across television have been declining for a variety of reasons: DVRs, internet streaming, more channels, cord cutting. But ratings for live sports have remained largely immune to this trend, staying flat or even rising in some cases. It has often been said that live sports are the last bits of appointment TV around, and television networks are paying handsomely for it. As the PEBA’s lead negotiator on the deal, Okinawa club owner Iyou Seigyoki, said the other day, “the games are only live once, and we own all the games.”

There will be more nationally televised games. Under the current deal, the PEBA’s television partners broadcast 362 regular-season games here in the U.S., or roughly 14 percent of all games played. Under terms of the new contract, domestic channels will get an additional 58 games, meaning that 420 (insert obligatory Aurora fan joke here) of the PEBA’s regular season games will be nationally televised. While this represents increased exposure for the league, it also represents an enormous challenge with respect to scheduling.

There will be more relevant nationally televised games. The national TV schedule is released before the season begins, and it always prioritizes the big-market teams—Borealis, Bears, Hitmen—and big-name players. Last season, both New Jersey and Palm Springs were on national television the maximum of 40 times, even though the Hitmen were terrible (66-96) and the Codgers missed the playoffs. This was always a possibility when the national games were announced, yet these were the games on everyone’s TV set nonetheless. Taking a page from the NFL playbook, the PEBA is introducing flex scheduling in 2024 for games taking place after the all-star break, allowing lesser-seen, but nevertheless competing teams to get some much needed airtime.

One interesting and unique aspect to PEBA television scheduling is the fact that what games are nationally televised will now depend on the nation in which the viewer resides. This will be a boon to teams outside of the North American market who will see their exposure in their host nations increase dramatically. This was something lost in the rush to merge the LRS and PEBA three years ago, when existing television agreements were simply cloned in the league’s new television markets, thus forcing baseball fans in Toyama to endure LondonMarseilles games in which they had no interest. No more.

You’ll be able to stream nationally televised games without needing cable. Previously, the PEBA’s only streaming option was PEBA Live, a third party service which was not well-received by baseball fans. One problem was that the 362 nationally televised games and all playoff games weren’t available, meaning you couldn’t actually watch the most important games. On top of this, there were many complaints that the video quality was poor for the games fans could watch.

Per today’s announcement by Seigyoki, the league has “finally entered the information age, establishing an enterprise that will launch new world class offerings.” In this context, ‘world class’ means ‘internet and mobile streaming.’ Under the terms of the new agreement, the PEBA now controls its digital properties. Seigyoki announced that the league would form its own media division, a limited partnership between the member clubs that will be known as PEBA Media and Online Ventures (PEBA MOV). While many of the details are yet to be hashed out, some of the products PEBA MOV will initially offer include: PEBA Streaming (a subscription service for streaming out of market games accessible through PEBAbaseball.com), and PEBA On Deck (a subscription service for mobile devices). This arrangement is consistent with the trend of major sports leagues clawing back digital operations that they’d originally outsourced.

What about local broadcasts? Fans will likely notice little change in the production of locally televised games. The new media-rights agreement covers advertising for local games, which advertising will also appear during games streamed through PEBA Streaming and PEBA On Deck. The PEBA has essentially made local networks subsidiaries of PEBA MOV, and has made them a part of its streaming and mobile services. Local broadcasters will sacrifice some autonomy in exchange for the ability to plug into a lucrative advertising space arrangement with the league. If anything, regional broadcasts will see their production values increase.

Your cable bill will increase. With sports cable channels shelling out an extra $1 billion annually under the new deal, you can be certain that they will charge cable providers more, who will in turn pass those costs on to you. Your cable bill will increase a couple of dollars a month solely because of the PEBA.

Will there be CBA ramifications? While the new deal has immense ramifications on league revenue, raising all member teams’ national media revenue figures to $72,357,500, it probably will have little effect on the terms of the collective bargaining agreement. Because the PEBA has no salary cap, there will be no mandatory adjustments to player salaries (the league just recently increased minimum salaries to $510 thousand a year and is not likely to bump them up again soon). Expect contracts yet to be negotiated, including this year’s free agent signings, to increase in value, however, as teams and players negotiate salaries.

The next couple of years will be interesting for fans of inside baseball as front offices and agents attempt to negotiate contracts and conduct trades in an uncertain but lucrative environment.