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Speaker 1: All right, here we go. We're back.

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Speaker 2: Let's finally dig into this MLB deal. We wanted to

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Speaker 2: wait for the specialist in this category, Andrew Marshan, joining

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Speaker 2: us right now on FT senior sports media columnists for

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Speaker 2: The Athletic twice a week. You can listen to his pod.

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Speaker 2: Just go to Andrew Marshan and mr cha n D

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Speaker 2: dot com. Andrew, Great to have you on, and I

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Speaker 2: wanted to just start with a little bit on your

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Speaker 2: column regarding this deal for MLB. We've known about the

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Speaker 2: teams involved, You've talked about him too, for months. How

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Speaker 2: do you grade this deal? I think most fans look

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Speaker 2: at the money, but they don't realize some of what

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Speaker 2: MLB had to sell away to make up for the

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Speaker 2: money that they gave up with this opt out that

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Speaker 2: you can help describe.

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Speaker 1: Yeah, if you look overall, I probably give them C

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Speaker 1: plus maybe B minus. I think they netted out. Okay,

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Speaker 1: I mean you have to really go back to when

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Speaker 1: they first did the ESPN deal. Jimmy Pittarro, chairman of

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Speaker 1: ESPN and Rob Manford, commissioner the Baseball wanted opt out

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Speaker 1: in that deal, and that deal they were set to

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Speaker 1: pay for the final three seasons of a seven year

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Speaker 1: deal one point six five billion dollars. MLB said we

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Speaker 1: would like an opt out for after four years to

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Speaker 1: the final three years, and then ESPN said, well, if

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Speaker 1: you want to opt out, we want to opt out.

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Speaker 1: Then this past February, ESPN used it. So when you

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Speaker 1: look at what that deal was for, it was for

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Speaker 1: home run derby, the playoffs, eight to twelve playoff games,

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Speaker 1: first round, and then Sunday Night Baseball. So they were

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Speaker 1: going to pay one point sixty five billion. Those assets

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Speaker 1: now are going to be with NBC, Slash, Peacock and

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Speaker 1: Netflix and will be for a round nine hundred million

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Speaker 1: dollars no excuse me, seven hundred and fifty million dollars

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Speaker 1: for the next three seasons. That's a nine hundred million

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Speaker 1: dollar difference. So what they did was they said, we

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Speaker 1: want to make up that money, so they sold MLB

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Speaker 1: dot tv or license it for the next three years.

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Speaker 1: That will be ESPN. They got that one point sixty

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Speaker 1: five billion dollars back, and so that is similar money

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Speaker 1: when you look at where they ended up, but they

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Speaker 1: had to sell their prize jewel for the next three

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Speaker 1: years in MOLB dot TV.

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Speaker 3: I got it there's so many things that I want

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Speaker 3: to unpack here, and it's probably a way above my

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Speaker 3: intelligence grade. So if I say something dumb, just tell me.

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Speaker 3: But you said Manfred wanted to put in that opt out.

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Speaker 3: Had he never put in that opt out, it would

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Speaker 3: have been status quo and they would have stayed on path.

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Speaker 3: Am am, I correct, And this would have been they

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Speaker 3: would have finished out the three year deal and ended

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Speaker 3: up kicking him in the face, and they lost a

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Speaker 3: ton of money. Like owners need to realize that he

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Speaker 3: for this move, he lost a ton of money. And

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Speaker 3: the players, Am I right.

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Speaker 1: You are correct? You know they'll argue that they made

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Speaker 1: up the money and that they would to have had

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Speaker 1: these discussions if there wasn't that opt out. Here's the

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Speaker 1: thing when you cover media and just to understand the

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Speaker 1: deal and why that opt out did not make any sense.

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Speaker 1: Media companies do not want three year deals. They want

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Speaker 1: If you look at the NFL deals, the recent ones

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Speaker 1: are for eleven years, as are the NBA ones. NFL

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Speaker 1: has an opt out, but eleven year deals. This deal,

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Speaker 1: after why did Major League Baseball and go back to

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Speaker 1: that seven year deal? The reason they had to take

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Speaker 1: less money a little bit less money for that deal.

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Speaker 1: Why was that they didn't have other bidders. It wasn't

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Speaker 1: like they were doing ESPN a favor if they had

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Speaker 1: other bidders. So going on, that's the case for what

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Speaker 1: the Sunday Night Baseball home run derby ate the twelve

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Speaker 1: playoff games, and that original deal didn't have the eight

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Speaker 1: to twelve that was added a little bit later. But

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Speaker 1: you don't have other bidders. Now you could say, well,

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Speaker 1: there's a lot of there's the netflixes and all these

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Speaker 1: other digital players coming in, so maybe in four years

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Speaker 1: will be better, but you have to know that nobody

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Speaker 1: really wants three year contracts, so you go back into

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Speaker 1: the market and that's where they really made the mistake,

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Speaker 1: and then ESPN used the opt out. He has been

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Speaker 1: ended up being right because they're saying, no, this, these

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Speaker 1: games aren't worth one point sixty five billion dollars over

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Speaker 1: three years, and the market said, yeah, that's correct, they're

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Speaker 1: way they're worth way less than they are. And another

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Speaker 1: point I'd make is that they got a premium on

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Speaker 1: Sunday excuse me, on MLB dot tv uh and you

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Speaker 1: know there's estimates, maybe it's two hundred million dollars extra

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Speaker 1: a year, which is great, but MLB dot TV they've

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Speaker 1: been they haven't want to they haven't wanted to license

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Speaker 1: that ever. And now they put a number on it

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Speaker 1: that yes, in a couple of years when they when

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Speaker 1: it goes to market, maybe again maybe they can increase

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Speaker 1: that a lot. But it just happened to be the

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Speaker 1: same one point six y five billion dollars at ESPN

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Speaker 1: instead of if they put maybe this is what this

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Speaker 1: is worth, this is a maybe it's worth three billion. Again,

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Speaker 1: you can only get what the market will say. But

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Speaker 1: they just got the money back and it felt like

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Speaker 1: a little bit like a band aid that said, let

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Speaker 1: me be a little positive. The partners that they have

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Speaker 1: ESPN continues Netflix you get involved, which was a good

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Speaker 1: money deal on the Netflix deal, uh, and then the

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Speaker 1: NBC and Peacock. That's good when you go into after

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Speaker 1: twenty eight when all their deals are up. To put

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Speaker 1: some ducks on the pod for Manford Company.

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Speaker 3: My question, the question that most fans have to me

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Speaker 3: is with them, are they going Is this going to

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Speaker 3: fix the blackouts? No, so nothing will be fixed on that.

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Speaker 3: So fans really could care less about any of this

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Speaker 3: except for the fact that they have to get four

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Speaker 3: new subscriptions to be able to see some of their teams.

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Speaker 1: Now, I'm going to defend the MLB on this. The

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Speaker 1: thing about the blackouts, it's not that MLB doesn't want

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Speaker 1: to get rid of blackouts. I think they would do

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Speaker 1: it tomorrow, and I think Manford and company are trying

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Speaker 1: to do that for twenty eight when all their national

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Speaker 1: deals are up, and they want to make it so

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Speaker 1: they can have a thirty team local package that you

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Speaker 1: can buy digitally and get a large percentage of your games,

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Speaker 1: of your team's games. But those rules are into cable

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Speaker 1: contracts and they're legal, and they're arcane, yes, but it's

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Speaker 1: not like you can just snap your fingers and say nope,

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Speaker 1: you can't. Because these regional sports networks, which are diminishing,

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Speaker 1: they have their rights to certain territories. Some I think

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Speaker 1: everyone would agree, don't make any sense because of how

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Speaker 1: far they go and how you're not really close to

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Speaker 1: this team and you can't see their games. So yeah,

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Speaker 1: there are problems with that, but I don't really think

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Speaker 1: that's me. They know the issue, they would solve it

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Speaker 1: today if they could. It's just not they can't just

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Speaker 1: snap their fingers and say we're gonna do things differently,

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Speaker 1: you know, as these regional sports networks, and we've seen

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Speaker 1: with six teams who are now part of this ESPN deal,

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Speaker 1: but you'll be able to buy their in market games.

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Speaker 1: That's kind of where the future is going. Not necessarily

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Speaker 1: will be with ESPN, but Amazon could be players for this,

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Speaker 1: you know, a couple of years. Apple could be players.

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Speaker 1: You know, there's a number of other places that maybe

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Speaker 1: get involved, and so that's what they're trying to point towards.

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Speaker 4: I've done I broadcast in an Apple game. I've done

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Speaker 4: a couple of games on these app apps and stuff

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Speaker 4: like that. How do you think the audience is gonna

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Speaker 4: take this? And knowing that you know, you're eventually gonna

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Speaker 4: have to buy you know, Peacock and Netflix and all this,

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Speaker 4: do you see the audience numbers going down on these

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Speaker 4: or do you see this being okay? Stabilize that this

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Speaker 4: is like the new norm. I know NBC is in

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Speaker 4: the picture, that's you know, that's a regular viewing broadcast

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Speaker 4: and network. But how do you see you know, the

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Speaker 4: regular fan going to these apps all the time and

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Speaker 4: trying to get in there.

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Speaker 1: I would say that Baseball did better with their partners.

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Speaker 1: You know, most of us have Netflix, not everybody. They're

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Speaker 1: gonna be baseball fans, probably older who don't have Netflix,

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Speaker 1: who might want to watch Opening Day and maybe they

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Speaker 1: get it for the one game. Do they needn't? You

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Speaker 1: know you can turn it off after But a couple

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Speaker 1: of things that they still have very wrong. There's too

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Speaker 1: many partners. And the Apple deal never made much sense

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Speaker 1: to me, still doesn't because you're only putting four regular

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Speaker 1: season games for your team on Apple. So that's just

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Speaker 1: an inconvenience for people and noise. People. All due respect

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Speaker 1: Todd for doing those games, but when you're but yeah,

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Speaker 1: you need another service. Uh, and it's only four games,

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Speaker 1: and so there's as you know, one hundred and sixty

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Speaker 1: two so you can miss four. And I think the

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Speaker 1: issue is if you if you look at the Yankees,

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Speaker 1: for example, you have to have Yes, Amazon, Prime Video, Netflix.

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Speaker 1: I mean, I might stop now because I don't know

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Speaker 1: how long your show goes for, but you may not.

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Speaker 1: You may have to extend keep going to see all

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Speaker 1: the games. Now, it's not a birth right they have

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Speaker 1: to see every game, but people have become accustomed to

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Speaker 1: being able to see it. And this is something I

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Speaker 1: would say, and Baseball is aware of this. Manford's even

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Speaker 1: said it publicly, is that he has said this way.

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Speaker 1: Is how I say it is that if you make

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Speaker 1: it hard for people to watch games, they'll listen to

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Speaker 1: you and not watch, you know, eventually, not not all

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Speaker 1: of them. But if you those diard fans, you know,

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Speaker 1: they they they're gonna follow as much as they can.

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Speaker 1: But you're saying Apple game here and then you know,

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Speaker 1: Roku now they're out. But you know, Roku didn't make

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Speaker 1: much sense to me. For ten million dollars a year,

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Speaker 1: that deal is crazy to me. I mean, Roku's free

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Speaker 1: to watch, but most people don't think of Roku, don't

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Speaker 1: aren't watching things on Roku, especially your older fans, So

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Speaker 1: that deal made no sense. But yeah, too many partners

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Speaker 1: right now and too expensive, so they have to dwindle

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Speaker 1: that down in a couple of years.

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Speaker 3: Is there a streaming group that steps up at the

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Speaker 3: end of this, at the end of twenty eight or

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Speaker 3: is this or all these groups that are taking these

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Speaker 3: games on saying you know, what do we need to say?

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Speaker 3: What do are what are they looking for in this

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Speaker 3: next three years? That'll make them say, yeah, we want

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Speaker 3: to take it. We want to be the place for

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Speaker 3: major League Baseball. Or is that not? Is that not

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Speaker 3: Manfred's Manfred's full plan here. His full plan is just

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Speaker 3: get as much money as you possibly can, no matter

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Speaker 3: who that group is.

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Speaker 1: I think it's a combination. They have to get it

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Speaker 1: right this next time around. And by getting it right,

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Speaker 1: it means two things. Number One, you have to get

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Speaker 1: the money to pay the players, as you know, and

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Speaker 1: to to get your for the owners, for everybody involved

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Speaker 1: in baseball. They want as much money as possible. Number

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Speaker 1: two is you have to limit the amount of partners

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Speaker 1: that you have, make it easier to digest. They were

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Speaker 1: to column a couple of months ago. For the athletic

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Speaker 1: what I would do is Monday through Friday, it's all.

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Speaker 1: You can eat your digital package or your RSN every

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Speaker 1: game Monday through Fridays on that service. Saturday and Sunday,

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Speaker 1: you'd have some special games that you have, some exclusive

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Speaker 1: windows and then you know, you feel the dreams Ruman Derby,

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Speaker 1: you try to auction those off as well, and if

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Speaker 1: your team wasn't in that exclusive weekend game, you get

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Speaker 1: it on your digital package. So then people don't have

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Speaker 1: to think that much. It's very simple and I think

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Speaker 1: it could be successful, but they have to simplify what

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Speaker 1: what the doing here because a couple things. One hundred

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Speaker 1: and sixty two games is a lot. I think baseball

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Speaker 1: gets a bad rap in terms of their viewing. I've

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Speaker 1: said this forever. They should be saying. When somebody wants

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Speaker 1: to compare baseball to football, I would say, how many

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Speaker 1: billions of minutes have people? Do? People watch baseball during

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Speaker 1: the season as compared to football, And people who are

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Speaker 1: gonna support they'll say, well, there's only seventeen games that

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Speaker 1: under sixty two. Yeah, that's the point. If there are

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Speaker 1: only seventeen Yankee games, what would the ratings be. Now,

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Speaker 1: they might not be NFL ratings, but they'd be much

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Speaker 1: higher per game for those seventeen games. So baseball has tonnage.

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Speaker 1: They should use that to their advantage. But they also

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Speaker 1: have to create scarcity because that's the NFL's big advantage.

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Speaker 1: It's a great TV score and this fantasy there's betting

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Speaker 1: and it works, but it has scarcity. Even though they

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Speaker 1: keep putting games all over the place, it's still only

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Speaker 1: seventeen regular season games that makes every game important. When

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Speaker 1: you play one hundred and sixty two, you guys don't

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Speaker 1: bear any for the players. Every game is important. You're

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Speaker 1: trying to build to make playoffs. But in June June seventeenth,

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Speaker 1: if you're a fan, that game doesn't mean as much

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Speaker 1: as you know, late October of course, or even you know,

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Speaker 1: mid September.

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Speaker 2: Thank you, Yes, I make that point all the time.

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Speaker 2: I also think, Andrew, the NBA is a good comp

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Speaker 2: at times. Right there's at least more inventory. It's not

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Speaker 2: nearly as much, it's about half the games, but it's

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Speaker 2: a good comp because you also look at two leagues

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Speaker 2: that have had somewhat similar revenue numbers that they report.

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Speaker 1: So that that leads me into my question.

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Speaker 2: The line that you said in your column The Athletic

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Speaker 2: was that MLB might need some better advanced scouts looking

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Speaker 2: into the next deal. How do you compare the way

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Speaker 2: that they've looked at media in general versus a spot

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Speaker 2: like the NBA. I mean, I worked for MLB for

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Speaker 2: a time period, and I know now as someone who's

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Speaker 2: on YouTube every day among other platforms, like it's very

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Speaker 2: restrictive with highlights. We don't have to necessarily go there.

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Speaker 2: But just in general, what do you see since you

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Speaker 2: cover all of the sports, and the NBA's deal is

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Speaker 2: way bigger and their younger audience is way larger. I

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Speaker 2: think because of the way that they allow creators like

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Speaker 2: us to use their highlights.

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Speaker 1: Yeah, I mean the the idea in terms of their

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Speaker 1: attitude of you know, kind of keeping their content for themselves.

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Speaker 1: I can understand it in some regards to monetize it,

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Speaker 1: and not that other people monetize all of their things,

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Speaker 1: but you could do licensing deals, which a lot of

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Speaker 1: other leagues have done with you know, a million entities.

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Speaker 1: NFL has a lot of deals, and so does the

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Speaker 1: NBA and SODA's hockey with a lot of places where

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Speaker 1: they can show highlights, you know, and they have to

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Speaker 1: obviously there's a fee involved. I would say this, they

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Speaker 1: have not anticipated this moment. Well, now you can. It

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Speaker 1: is complicated, you know, the regional sports networks diminishing, I

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Speaker 1: do think was pretty predictable. Where we're going to a

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Speaker 1: digital world where a show like yours can reach basically

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Speaker 1: the whole globe, and so that's your audience. And you

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Speaker 1: know it used to be you know, all these things

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Speaker 1: are all about distribution. If you look at the history

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Speaker 1: of media, and this gets into sports, you know, go

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Speaker 1: way back when the old adage was never get in

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Speaker 1: a fight with someone who sells ink by the barrel.

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Speaker 1: Why was that because the owner of the newspaper back

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Speaker 1: before I'm talking nineteen hundred, he could have He could

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Speaker 1: say whatever you wanted in the newspaper and hopefully you

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Speaker 1: was I'm not getting into mainstream media sometimes not perfect

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Speaker 1: but gets a bad rap. But let's just go with

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Speaker 1: my analogy here. He could say whatever he wanted, you

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Speaker 1: couldn't respond. Now, I could go through the whole history

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Speaker 1: of it, but distribution is the most important thing, and

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Speaker 1: distributions not zero. Doesn't cause zero to distribute, but it's

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Speaker 1: pretty close to zero for you to reach your audience.

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Speaker 1: That you could be one day bigger than MLB network

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Speaker 1: is not something that's unfathomable. It's something that very well

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Speaker 1: could happen because you can reach people just as easily

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Speaker 1: as a can in some respects on YouTube, it's even

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Speaker 1: simpler for people. There's no fee for them to log

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Speaker 1: on and watch your show, and so I don't think

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Speaker 1: they anticipated the moment well. I think if you look

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Speaker 1: at what the NBA did. I thought they really did

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Speaker 1: well in terms of the partners they ended up with,

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Speaker 1: and this is the model that, you know, I think

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Speaker 1: it's different. I think MLB is looking at the NBA

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Speaker 1: is like, we'll just do what they did and more

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Speaker 1: national games. I think it's a little different personally. But

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Speaker 1: they did a great job. The NBA. They got seventy

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Speaker 1: six billion dollars for eleven years. They have three national

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Speaker 1: partners ESPN, Nbcpcock, and Amazon Prime Video. And I know

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Speaker 1: some people said it's kind, it's not. I don't think.

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Speaker 1: I think it's going to become second nature by next year.

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Speaker 1: That you know. The games are a Monday and Tuesday,

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Speaker 1: Peacock and NBC Wednesday, ESPN. I could go on, but

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Speaker 1: I think it'll become second nature in terms of the

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Speaker 1: national games. And I think there is something there that

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Speaker 1: they should follow baseball, but it's not exactly the same.

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Speaker 1: I think a NASH regular season basketball game going on

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Speaker 1: the assumption the stars are playing is a little bit

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Speaker 1: more of a draw than most games, not you know, featuring.

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Speaker 1: You know, I think there's two stars who stand out

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Speaker 1: or must watch TV and no Tani and Judge right now,

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Speaker 1: maybe others will develop, but and they're also on the

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Speaker 1: two teams that are the biggest draws, and so you

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Speaker 1: can't show them every time on national TV. But you know,

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Speaker 1: I think, like you look at the Netflix the other

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Speaker 1: Field of Dreams game. I again, I'm sure there's a

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Speaker 1: reasoning for it. I don't know it. But how again,

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Speaker 1: all due respect to the Twins, how are the Twins

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Speaker 1: in that Netflix game for Field of Dreams versus the Phillies.

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Speaker 1: I mean, the Phillies are fine, but if you're trying

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Speaker 1: to get Netflix involved, I mean, how many people are

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Speaker 1: gonna watch it? Yes, Field Dreams is cool, but they

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Speaker 1: already did it, and I just don't see how the Twins,

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Speaker 1: who may not even be very good by then. It

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Speaker 1: could be August and they're already out of it. Just

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Speaker 1: that's that's a weird decision to me.

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Speaker 3: But you would have you would have the Vikings and

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Speaker 3: the Eagles if there was a Field of Dreams football game, So.

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Speaker 1: Yes, to me, I think that's a difference though, because

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Speaker 1: the Twins and the Vikings are totally you know, different animals.

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Speaker 1: The Vikings, you know, they're not having their you know,

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Speaker 1: their quarterbacks not good whatever. They but it's a different

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Speaker 1: so I think when you look at the sport again,

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Speaker 1: this is just the reality of it. There's about six

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Speaker 1: teams that can play nationally. The other teams that again,

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Speaker 1: players and on those teams may not want to hear

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Speaker 1: it may not be fair, but they are about six

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Speaker 1: teams that should probably be on almost every time nationally.

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Speaker 1: The reason the Yankees and Red Sox are on Sunday

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Speaker 1: night so much they get a half a million more people.

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Speaker 1: I mean that people watch. People may say they don't

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Speaker 1: like it, they might not fair, YadA YadA. People watch.

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Speaker 3: That's why we need to promote shows that talk nationally

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Speaker 3: about baseball and hit all the teams and don't care

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Speaker 3: which team wins. But anyway, there was only a show

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Speaker 3: that was like rated and like you know, in the

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Speaker 3: foul territory region of the field and stuff like that.

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Speaker 3: We had a handsome guy named Todd Frazier that came on.

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Speaker 3: My question is actually a fan question for you, all right,

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Speaker 3: armand is amazing asked. Can we ask Andrew what happens

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Speaker 3: to the deal when the lockout happens next year? And

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Speaker 3: I want to add on to that, what happens to

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Speaker 3: the deal if there is a lockout for the next deal,

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Speaker 3: does that affect the TV ratings? So kind of a

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Speaker 3: two part there.

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Speaker 1: I mean, you guys, I'm sure covering this every day

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Speaker 1: in terms of labor and where we're going, But you

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Speaker 1: don't want to go in if they miss games, god forbid,

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Speaker 1: miss the season. I mean, that's going to hurt their

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Speaker 1: negotiating where they are. And the other thing is about

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Speaker 1: the Nationals just came back to like just another point

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Speaker 1: and I can get further into the question, but is

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Speaker 1: that it is better again? Do you want to talk

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Speaker 1: about all the teams, But at the moment, if a

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Speaker 1: Yankees died, that's better for baseball in terms of their

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Speaker 1: next deal because the ratings will be higher now. They

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Speaker 1: did well because the Blue Jays and Dodgers had a

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Speaker 1: great series, And the most important thing is going seven games.

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Speaker 1: They can get six or seven games, that's what the

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Speaker 1: networks really want. But the lockout potential is something that

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Speaker 1: is awful. Again, I don't know the language of these deals.

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Speaker 1: I presume they don't get paid if there's a lockout.

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Speaker 1: I don't think baseball is in position to say, you know,

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Speaker 1: sometimes the NFL has been able to say that we

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Speaker 1: still get paid even if the games still get played.

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Speaker 1: Obviously they get the games back when they're you know,

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Speaker 1: they extend the deal they get they get those games,

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Speaker 1: but they still pay them throughout. I'm pretty sure baseball

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Speaker 1: did not have that luxury in these deals to get

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Speaker 1: paid if there's no games, So yes, that would impact.

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Speaker 3: Now.

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Speaker 1: The other thing is about these deals that were just consummated.

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Speaker 1: People have to understand when they compare it to the

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Speaker 1: NBA recent deal or the NFL's recent deals. They were

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Speaker 1: selling their top shelf stuff the NBA finals, the Super Bowl,

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Speaker 1: Baseball was not. They were selling their second tier games

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Speaker 1: that are eight to twelve playoff games, which are big,

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Speaker 1: but not an LCS. You know, there's two LCS, is

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Speaker 1: not a World Series, and so it's not apples to

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Speaker 1: apples when you compare exactly where the NBA just landed

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Speaker 1: and then where the NFL got two one hundred and

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Speaker 1: ten billion plus a couple of years ago for eleven years.

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Speaker 2: Andrew good stuff. Really appreciate it. Like Kratz said, we

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Speaker 2: had to bring on someone smarter than him to be

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Speaker 2: able to explain all of this. You are definitely that guy,

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Speaker 2: Andrew Marsham dot com. He covers this on.

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Speaker 1: His podcast twice fel.

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Speaker 2: You can listen to that covering all sports, and then

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Speaker 2: there's more on this in the Athletic as well.

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Speaker 1: Andrew, good to see you.

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Speaker 2: Thanks for the time man, Yeah, thanks guys,