A new report revealed that small-market clubs like the Pittsburgh Pirates and Kansas City Royals are pushing for a huge shift related to the league’s media rights that could have a monumental impact on the revenue that organizations like the Los Angeles Dodgers and New York Yankees take in.
One of the great debates in baseball over the last 30 years is small markets versus big markets. As revenue has increased for MLB, organizations in larger cities with bigger populations can earn more in their regions. Clubs in New York, Los Angeles, and Chicago, for example, have benefited from that and have had an advantage over other teams due to their wealth.
While other sports have found ways to even the scales with salary caps, MLB is the only major North American league without a hard cap on team spending. Furthermore, in other leagues — the NFL being the best example — revenue sharing when it comes to television rights is another element that blocks location from being an advantage.
MLB has always been a sport where TV rights are cut up locally by the teams. However, there is a growing movement within the league to change that soon. On Friday, The Athletic took a deep dive into the idea of TV revenue sharing in MLB. The notion is reportedly being pushed more than ever after Diamond Sports Group — the parent company of Bally Sports — went bankrupt in 2023, cord-cutting is at a new high, and streaming services are throwing around huge sums of money to sports leagues.
“Some baseball owners and executives, mostly in smaller markets, believe the best way to grow media revenues over the long haul is to centralize the deal-making, and from there, to potentially sell all 30 teams’ regular-season broadcasts as one streaming package,” the outlet wrote. “Others in the game, particularly those whose teams make the most money, are vehemently opposed to surrendering their power over their rights.”
That will be the biggest sticking point. In other leagues like the NFL, an agreement was made to share TV revenue evenly for the betterment of all teams and the league. However, an organization like the New York Yankees and Los Angeles Dodgers make well over $100 million a year in their TV situations. On the flip side, teams such as the Pittsburgh Pirates or Colorado Rockies make half or even a third of that amount.
Sharing the pie would certainly boost the revenue for small market clubs, and allow them to compete more for free agents and talent, while also limiting the wealth of their rich rivals. But getting the Yankees, Mets, or Dodgers to agree to give up some of their money for the betterment of the sports will be a tough sell.
It will be something to watch in the year ahead as those big market teams will be in the minority of keeping the status quo when it comes to TV rights.
