MLB Teams Face Financial Challenges as Regional Sports Network Money Dries Up
I’ve been emphasizing this concern for quite some time, and recent developments have only amplified it.
The Impact of Streaming on MLB Teams’ Revenue
The ongoing shift towards streaming as a means of televising MLB games may result in a significant decrease in revenue for teams, as regional sports network money dries up.
This concern has been underscored by a recent report concerning the Minnesota Twins:
Major League Baseball’s Minnesota Twins are taking measures to reduce their payroll and explore alternative local TV options following the expiration of their agreement with the bankrupt regional sports network operator, Diamond Sports Group.
During a league-wide general managers meeting earlier this week, Twins GM Derek Falvey expressed his expectation that the team will not be able to match the record-breaking collective player payroll of $156 million from the 2023 MLB season.
The report further reveals that the Twins received $54.8 million from Bally Sports North, a subsidiary of Diamond Sports Group, in 2023. With the expiration of this deal, the Twins will need to seek alternative sources of funding.
Projected Payroll for the Twins in 2024
It is anticipated that the Twins’ payroll for the upcoming 2024 season will experience a decline of approximately 10 to 20 percent compared to 2023. Despite this reduction, the Twins’ previous payroll enabled them to achieve success, winning 87 games and securing the A.L. Central title.
Financial Challenges Extend to Other MLB Teams
The bankruptcy of Diamond Sports Group poses a potential threat to the revenue of the 12 teams that still maintain agreements with Bally Sports. Alongside the Twins, these teams include the Braves, Marlins, Tigers, Reds, Cardinals, Brewers, Royals, Angels, Guardians, Rangers, and Rays.
However, the Chicago Cubs are currently less susceptible to this issue due to their co-ownership of Marquee Sports Network, which remains in a stable financial position.
Implications for the Future of MLB
If teams continue to reduce their payroll, a wider disparity will emerge between wealthy, high-payroll teams and those forced to make cuts, as the Twins are reportedly planning to do. This situation may prompt MLB to pursue a salary cap during the next Collective Bargaining Agreement (CBA) negotiation. However, the likelihood of players accepting such a proposal is uncertain and could potentially lead to another lockout.
As we approach the next three MLB seasons, it is important to appreciate the game while these financial challenges persist.