MLB's Blackout Restrictions are the Same Old Story

On any summer night, a baseball fan and MLB.TV subscriber in Des Moines could be blacked out from as many as 12 major league baseball games. By MLB's rules, Iowans are blacked out from watching the Twins in the north, the Brewers in the northeast, the Cubs and White Sox due east, the Royals and the Cardinals to the south, and any team that happens to be playing one of these forbidden squads. Same goes for the sport-loving residents of Las Vegas, blacked out from the Padres, Dodgers, Angels, Rockies, Giants, and Athletics.

Iowa and Las Vegas are just the extremes. Vast swaths of the country are blacked out from at least two teams, and every single MLB.TV subscriber remains blacked out from games broadcast in his or her local media market. Tuesday, in an interview with Maury Brown at Forbes, new MLB commissioner Rob Manfred issued a passionate defense of the blackout policy. "Television territories that cause these blackouts are integral to the economics of the game," Manfred told Brown. "They're a foundation of the very structure of the league."

Television territories matter because Major League Baseball's biggest financial victories in the past few years have come in the form of lucrative rights deals between teams and regional sports networks. The Texas Rangers and Los Angeles Angels of Anaheim have each signed deals worth $150 million per season to broadcast games. The Phillies signed a deal with Comcast SportsNet Philadelphia last year worth $100 million per season, with the club retaining a 25 percent share in the network on top of that. The Dodgers signed the largest deal of them all in January 2013—a $7 billion contract with Time Warner Cable to create a new sports channel, good for a cool $280 million per season.

MLB.TV has been a revolutionary product in sports distribution, allowing fans with an internet connection to tune into any game live. It's perfect for fans who have moved away but still want to follow their hometown team, or those who want to watch star players like Yasiel Puig and Felix Hernandez whenever they play. But those looking to follow their team locally via the internet are screwed by the blackout rules. Companies like Time Warner are willing to talk billions-with-a-B because of the massive subscriber fees attached to regional sports networks. If sports fans are able to dodge cable bills through an internet streaming option, Time Warner and other distributors lose their leverage, and the sports cable bubble sustaining these huge contracts just might pop.

For years, fans who would glady pay for the privilege of streaming in-market games have complained about Major League Baseball restricting access. But of course they are. Baseball owners have always used all the tools in the toolbox to get richer and more powerful; this includes taking control of markets and territories to get what they want, whether it's television contracts, leverage against fellow owners and smaller leagues, or the monopoly power of simply being the only game in town. If the fans happen to take some lumps in the process, so be it.

Go back to the late 1950s, after the Brooklyn Dodgers left for Los Angeles and the New York Giants left for San Francisco, leaving the Yankees to run New York City by themselves. National League fans in New York quickly clamored for another team to fill the void. They would eventually get the Mets in 1962, but it wasn't easy. As Jimmy Breslin wrote in his account of those disastrous inaugural Mets, Can't Anybody Here Play This Game, "Del Webb, co-owner of the Yankees, thought he was getting all of New York when O'Malley was given Los Angeles as a territory. Webb didn't want to hear of any New York Mets. They were not part of the deal."

The Yankees fought hard to keep the National League out of New York and prevent the Mets from ever materializing. As the push for the Mets became heavier and heavier, the Yankees tried their best to turn their territorial rights into some sort of gain. First they tried to wrestle Macombs Dam Park, the eventual building site of the new Yankee Stadium, away from New York City, for use as a parking structure. Then, after the city didn't bite, the Yankees held out until the National League allowed the American League to push its own team, the Angels, into O'Malley's Los Angeles territory. Webb's Yankees lost their monopoly, but the junior circuit gained a sweet slice of the game's new West Coast money at a time when the business distinction between leagues actually mattered.

Whether it's restricting TV access to milk cable subscribers for every last dollar, restricting player rights through the reserve clause, restricting access to independent baseball through its government-approved monopoly, or restricting gigantic population centers to a single team, the people who profit off of baseball have always relied on restrictions like the current MLB.TV blackout that make their product more scarce, and harder for fans to enjoy. The The business of baseball relies entirely on controlling the fan's access to the sport. This control is, as Manfred says, the foundation of the very structure of the league. And as long as the cable cash keeps flowing, Major League Baseball and Commissioner Manfred couldn't care less if that means making fans' lives more inconvenient or more expensive.