MLB & Fox Reportedly Agree on (Partial) In-Market Streaming

Major League Baseball’s arcane – and many would say horribly outdated – television blackout policy has long been a source of frustration for baseball fans. As most readers are by now well aware, under MLB’s existing rules, fans residing within each team’s designated “local” broadcasting territory are currently unable to view that team’s games over the Internet via the MLB.tv streaming service. Instead, fans must subscribe to whichever regional sports network (RSN) owns the rights to the team’s games in order to watch their local team play.

These restrictions impact fans in a variety of ways. For starters, the existing rules prevent fans from watching their local team play on mobile devices, instead only allowing fans to view their local team’s games on a traditional television set. So anyone hoping to watch their local team’s broadcast via cell phone, for instance, is out of luck under the league’s existing rules.

Perhaps more frustrating, though, is the impact that MLB’s blackout policy has on fans who are either currently unable – or simply unwilling – to subscribe to whichever RSN owns the rights to their designated local team’s games. Under MLB’s policy, even if these fans shell out $110-130 per year to subscribe to MLB.tv, they will still be blacked out from watching any game involving their local team, even if they cannot watch the game on their local cable system.

So when news broke on Monday that MLB and Fox are nearing a deal to allow in-market streaming for 15 teams’ games, some fans were undoubtedly excited to learn that baseball was apparently, at long last, fully embracing the new digital age.

Unfortunately, in reality, the MLB-Fox agreement will do little to solve the most frequent criticisms of MLB’s blackout policy, as the scope of the new deal appears to be much more modest than some initial headlines suggested.

Let’s start by looking at what the pending deal between MLB and Fox will actually do. As reported, subscribers to Fox-owned RSNs will now be allowed to digitally stream in-market games to authenticated computers and mobile devices. Under the terms of the deal, MLB has reportedly agreed to allow Fox to authenticate whether a user currently subscribes to one of its RSN through its FoxSportsGo app. This had been a major sticking point in previous negotiations, as MLB had reportedly insisted up until now on using its own MLB.tv service to facilitate the authentication for any in-market streaming.

In exchange, Fox has agreed to allow MLB Advanced Media (MLBAM) — the subsidiary that runs MLB.tv — to provide the actual digital stream that its subscribers will use to watch in-market games. Fox has also reportedly agreed to pay MLBAM somewhere in the “mid-to-high seven figures per team” in new broadcast rights fees for the right to offer its subscribers in-market streaming.

So fans who currently subscribe to a Fox-owned RSN and want to watch their local team’s games via the Internet will now be in luck — at least beginning in 2016. In particular, as Maury Brown has noted, the pending agreement will create an in-market streaming option for local fans of the following teams (assuming they subscribe to the applicable Fox RSN): the Braves, Reds, Indians, Rangers, Tigers, Royals, Angels, Marlins, Brewers, Twins, Yankees, Diamondbacks, Padres, Cardinals, and Rays.

Fans living in the designated home broadcast territory of any of the other 14 U.S.-based teams, however, will still be unable to digitally stream their team’s games in-market. (The Toronto Blue Jays currently permit in-market streaming throughout Canada for their RSN subscribers.) That having been said, negotiations between MLB and many of the non-Fox-owned RSNs reportedly remain on-going, so it is possible that the league will eventually be able to reach a deal on similar terms with those networks as well.

While Monday’s news is great for fans who already subscribe to a Fox RSN, the MLB-Fox deal unfortunately will do nothing to help those fans who currently find themselves completely unable to watch their favorite team play. As illustrated by the map below, many MLB teams’ local broadcast territory extend to areas well beyond those in which the applicable RSN is actually carried on local cable systems.

Fans in Iowa, for example, have famously found themselves blacked out from watching as many as six of the 15 MLB games on any given day, even though few cable systems in the state allow fans to subscribe to the RSNs carrying the games of the six teams that claim the state as their territory. Because these fans are not currently subscribing to these teams’ RSNs, they still will not be able to digitally stream their “local” teams’ games anywhere within the teams’ designated home broadcasting market.

For this same reason, the new MLB-Fox deal also does nothing to help local fans who have voluntarily chosen to “cut-the-cord” and forego subscribing to cable entirely. With cable subscription rates dropping, this is an issue that is only likely to become more pronounced in the future.

Ultimately, then, the new MLB-Fox agreement does nothing to resolve many of the most common criticisms of MLB’s blackout policy. While many current Fox RSN subscribers will undoubtedly enjoy being able to stream games in-market, there will still be a countless number of fans who would love to be able to watch their favorite MLB team’s games via the Internet, but yet who will nevertheless continue to be unable to do so under the league’s existing broadcast rules.

Unfortunately, given the extent to which MLB remains economically tied to its existing broadcast model, any substantial modification of these more frustrating aspects of the league’s blackout policy are unlikely to come anytime soon. Instead, fans’ best hope for significant change in this area remains the on-going Garber v. Office of the Commissioner litigation. As both Wendy Thurm and I have discussed on a number of occasions, the Garber case alleges, in part, that MLB’s television blackout polices violate the Sherman Antitrust Act. If successful, the suit could potentially result in the court striking down MLB’s in-market streaming restrictions in their entirety.

As I noted in June, however, there are reasons to doubt whether the lawsuit will ever proceed that far. The same plaintiffs attorneys who are challenging MLB’s blackout policy in the Garber case recently settled a similar lawsuit against the NHL, without requiring that the league change its blackout policy in any significant respect. If MLB were to cut a similar deal with the plaintiffs, then the best short-term hope for any significant change to MLB’s blackout policy would be lost.

All in all, then, while Monday’s news of a pending deal between MLB and Fox is certainly a step in the right direction for fans, it by no means signals an end to fans’ consternation over MLB’s blackout rules.