Monday, January 11, 2016

The Battle over Broadcasting

Nathaniel Grow writes about Garber vs. the Office of the Commissioner of Baseball, a case that could change the landscape of baseball broadcasting:

Long-time Fangraphs readers are probably already familiar with the Garber suit, as we’ve previously covered the case on a number of different occasions. By way of a brief recap, though, the lawsuit essentially alleges that MLB violates federal antitrust law by assigning its teams exclusive local broadcast territories (the same rules that also give rise to MLB’s infamous blackout policy).

Not only do the plaintiffs allege that the creation of these exclusive territories illegally prevents MLB teams from competing for television revenue in each others’ home markets, but they also contend the rules restrict teams from competing with the league itself in the national broadcast marketplace (preventing teams from signing their own national television contracts, for instance, or offering their own out-of-market pay-per-view services in competition with MLB Extra Innings and MLB.TV).

Thus, the Garber suit presents a direct challenge to MLB’s existing television business model, one that could revolutionize the way in which baseball is broadcast in the future.

If Garber wins, we would likely see the end of team monopolies in a particular city. It may also prevent exclusive national broadcasts. In a way, it would be a throwback to the early days of baseball broadcasting, when teams like the Yankees could sign national contracts, or the early days of cable, when super-stations could broadcast Braves and Cubs games anywhere in the country. While the Yankees broadcasts led to the current system, the super-stations went on a long time before they were stopped.

In general, I’m for an open market, but if the cost of broadcasts is driven down, then players salaries are likely to fall, too. It will be interesting to see where the union stands on this, as I don’t see a representative on the expert witness list.



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