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March 21, 2011

The Payoff Pitch

Blackout and Blue

by Neil deMause

Living in the future has its advantages. Back when I was a kid, in the late Pleistocene, catching a ballgame remotely meant either watching your local teams on TV or, if you were away from your living room, listening on the radio; maybe if you were very lucky and it was late at night and the ionosphere was aligned just right, you might be able to just barely tune in something that might possibly be Ernie Harwell on an out-of-town broadcast. Today, anyone with $99.99 burning a hole in their credit card ($119.99 if you want DVR-style gewgaws like fast-forward and rewind) can sign up for MLB.tv and watch any game, whether spring training, regular season, or postseason, on their computer, iPad, smartphone, or PlayStation 3—I'm sure that right this moment someone somewhere at MLB Advanced Media is working on an app that will stream hi-def baseball video live to the dashboard display of your flying car, just as soon as those are invented.

Any game, that is, unless it's one involving your local team. In that case, you're still stuck with 20th-century technology, and either tethered to your TV or forced to stick with audio. Any attempt to do otherwise will result in that dreaded message familiar to MLB.tv users: "We're sorry. Due to your current location you are blacked out of watching the game you have selected...."

If a Martian—or, let's say, a reanimated Bill Veeck—were to land on Earth today, MLB.tv might well strike him as the most bizarrely marketed product in the world: "You can watch any game you want! Oh, except for your favorite team." And it's a state of affairs that was achieved only by clearing huge technological hurdles: MLBAM now actually owns a patent on the system it developed to lock you out based on your geographic location, which it determines by combining a check of your computer's current IP address with a host of other secret data that they officially refuse to divulge.

Little wonder, then, that MLBAM chief Bob Bowman admitted in 2009 that blackouts were the number one complaint of MLB.tv users, and that baseball officials were working to find a way around it. As streaming video blogger Dan Rayburn reported at the time, "MLB made it clear that they think they can resolve the issue and that there is enough money to go around to pay everyone to make it possible to get in-market games through their online video offering, sooner rather than later."

Two years later, it's getting late early. And if you're a baseball fan who would rather watch your home team's games on your computer than your TV—or, heaven forfend, would rather join the ranks of cord cutters and pay MLB directly for web access to games—you're likely wondering what the holdup might be. What's your problem, Bud Selig, isn't my money good enough for you?

The answer, you might assume, is that ballclubs want to force you to shell out for their cable signals no matter what—and you'd be half right. The more complete reason, it seems, is that while MLB can conquer any technological challenges—even how to tell when your iPhone has crossed the border from one team's designated geographic territory into another—the prospect of in-market video streaming faces a far more formidable obstacle: lawyers. Big ones. With sharp teeth.

Now, the very notion of designated "TV territories" might be bizarre enough to our hypothetical alien. (Though not a zombie Veeck, presumably, who not only would have found it familiar, but likely would have found some way to turn it into a tax writeoff). It is, in many ways, a historical artifact of baseball being old enough to have begun showing up on the airwaves back when leagues still had to pay networks to broadcast them; the first local TV rights contract that earned money came in 1946, when the Yankees (naturally) sold their season's rights in exchange for $75,000. The NFL on television, by contrast, was still in its relative infancy in 1961 when Pete Rozelle got the owners together and convinced them to pool their TV rights and sell them to the highest network bidder; by then the top baseball teams had already grown accustomed to selling their own TV rights, and weren't going to give them up without a fight.

And that, more or less, is where things stand now. Baseball's TV territories—not to be confused with its smaller franchise territories, which determine which teams have veto powers out of other teams relocating to their necks of the woods—have been set for some decades now, and team owners have built media empires (large ones for the likes of the Yanks and Red Sox, little Tavolara-sized ones for their small-market competitors) by selling off the exclusive rights thus parceled out.

Think about this for a minute, and the problems facing anyone wanting to put together an all-games streaming web package become clear. Let's say some clever MLB.tv negotiator were to convince a team owner that they could pocket some extra cash by licensing their games to MLBAM for a fee. Or, so long as we're dreaming here, that a coalition of small- and medium-revenue teams would go all Tahrir Square on the asses of their big-market competitors and vote for an NFL-style pooling of TV rights—something that, incidentally, could have hugely beneficial effects on that competitive balance thing that people are always complaining about. What then?

Well, you'd still need to face the fact that every club's TV rights are already wrapped up in legal entanglements: each owner has already sold exclusive rights to their local areas to their regional sports networks, which in turn have sold them to cable and satellite companies. As one baseball media expert noted, "there are going to be a lot of people at that table"—and then those negotiations are going to have to be repeated 30 times, all for contracts with different expiration dates, before any global web video deal could be put in place.

With this mess in front of them, what MLB has done, essentially, is to throw up its hands, telling its new-media arm, "Here are the rights to out-of-market games, like it or lump it." MLBAM may not like it—one gets the sense that they would dearly love to dispense with those godawful blackout messages, which must be death to their marketing department, not to mention a headache for the customer service people who get deluged with the resulting complaints—but they've made the best of it, and have devoted themselves to nibbling around the edges. For the playoffs and World Series, they've managed to cobble together Postseason.TV, a mashup of raw video feeds that, while entertaining for a while, are usually badly out-of-sync and lack such modern innovations as player stat lines and replays—but at least it's better than just listening to the radio. They're also working to establish special in-market deals to allow fans who already subscribe to their teams' cable broadcasts to tune in via the web (though not, so far, mobile devices) as well: So far the Yankees and the Padres are the first two teams to have signed up. (MLBAM won't divulge details of exactly who gets paid how for these, but it's fair to assume that the checks are flying back and forth according to hideously complicated formulas.)

Still, that doesn't help if you get your TV through a service that hasn't signed up (like me, in Yankees territory but with my verboten DirecTV dish) or, worse yet, don't subscribe to a TV service at all. Plus, it's not really so enticing to have to shell out an extra seventy bucks to watch Yankee games on the computer when you're already paying for cable and MLB.tv.

The one set of baseball viewers who might, just maybe, hold out hope of rescue from the foul clutches of territorial rights are those in the horrible limbo of being officially in a baseball TV market or even several—Las Vegas, for example, somehow manages to be in five teams' official territories at once—yet without the actual games being broadcast on TV. It's these fans who have reportedly been screaming the loudest about MLB's blackout policies—and understandably, since "Go watch on TV!" is a hard message to take when the games aren't actually available. For a couple of years now, there have been reports that MLB would like to give teams a use-them-or-lose them on TV rights, meaning those orphan viewers would be guaranteed either the right to pay for games on local cable, or to pay for MLB.tv (or the Extra Innings cable package, which faces similar blackout problems).

That plan would, at least, involve fewer lawyers at the table, yet still it's residing firmly in MLB's "coming soon" file. Unless Selig starts making reforming TV rights a priority—and there's plenty of evidence that this is a man who doesn't know the meaning of the word "priority"—the best bet for blacked-out fans is to hope their local team signs one of those web deals for cable subscribers, and doesn't charge through the nose for it. Either that, or figure out how to summon the ghost of Pete Rozelle.

Neil deMause is an author of Baseball Prospectus. 
Click here to see Neil's other articles. You can contact Neil by clicking here

Related Content:  Tv,  The Who,  Territorial Rights,  Tv Contract,  Baseball TV,  Streaming,  Mlb.tv

23 comments have been left for this article. (Click to hide comments)

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Brian Cartwright

Teams have sold rights to the local broadcasters. We need a method that does not cut out those broadcasters.

I recall that last year MLBAM did make Yankees and Padres games available if the customer was already a subscriber to the local broadcaster, although that was not mentioned in this article.

Can we follow the same model?
a. If a customer is in the coverage area of a broadcaster who possesses rights to a team, show that you are already a subscriber, or pay a surcharge, to see that team.
b. If you are not in a local coverage area, then no blackout because no broadcaster is being affected.

Mar 21, 2011 04:03 AM
rating: -3
 
Mountainhawk

It was mentioned:

"They're also working to establish special in-market deals to allow fans who already subscribe to their teams' cable broadcasts to tune in via the web (though not, so far, mobile devices) as well: So far the Yankees and the Padres are the first two teams to have signed up. (MLBAM won't divulge details of exactly who gets paid how for these, but it's fair to assume that the checks are flying back and forth according to hideously complicated formulas.)"

Mar 21, 2011 05:00 AM
rating: 0
 
Mountainhawk

Blackout policies are horrible, fan-unfriendly policies, but I doubt they go away anytime soon unless you have an NHL like uprising of the small market teams, and a commissioner willing to follow through with that vision and stick it to the big markets. Doesn't seem in Selig's game plan.


BTW, not sure I like the reference to Tahrir Square ... it seems silly to be comparing a struggle for freedom and democracy to not being able to see a game on your iPhone.

Mar 21, 2011 05:03 AM
rating: 0
 
BP staff member Neil deMause
BP staff

Fair enough. I did consider "unleash a can of whoop-ass" instead of the Tahrir Square reference, but I was concerned that that would belittle the efforts of Stone Cold Steve Austin.

Mar 21, 2011 05:17 AM
 
fieldofdreams

Nice article. Very frustrating....I live in the Raleigh/Durham area, which means I am in the Nationals and Orioles TV market, but can't see any of their games b/c of a dispute between Mid Atlantic Sports Network and Time Warner Cable. The "use it or lose it" idea would help a lot here.

Mar 21, 2011 06:05 AM
rating: 2
 
notting

That is the one nice thing about not being a fan of either of those teams... I only have to worry about the rules 9 times a year or so.

Mar 21, 2011 07:17 AM
rating: 0
 
beerchaser42

Same here. That MASN-TWC pissfight has been going on for several years now, and appears no closer to resolution now than when it started.

Mar 21, 2011 08:02 AM
rating: 0
 
Matthew Avery

As "cord cutter" (or rather one who has never paid for a "cord" in the first place), I'm glad I live in Raleigh and not South or West of here. This means I'm able to watch Braves games. Well, most of the time. Not so much when they play the Nationals or the Orioles.

I never really understood how I was in two media markets at once, but I guess it's better than those Vegas folks who are effectively blacked out of out to 10 teams' games on any given day.

Mar 21, 2011 08:34 AM
rating: 0
 
mccobw01

Same here. Raleigh resident, Braves fan. I'm actually thrilled that we're not considered a Braves market so that we can watch all Braves games via EI or MLB.tv. What's annoying, however, as you have pointed out, is the inability to watch Nats/Orioles games. That means that there are 18 or so Braves games every year that I simply can't see.

For example, this year the Braves open their season in DC, which means I won't be able to watch any of their first three games. The season's penultimate series is also against DC. Hope there's not a pennant race going on.

To make matters worse, with the FCC finally issuing a ruling (after 2 years of consideration) for Time Warner Cable, that means MASN and TWC are basically left to themselves to try to work out an agreement. In other words, I don't expect this to be resolved anytime soon. Bryce Harper may be a Yankee before I ever see him play a baseball game.

Mar 21, 2011 11:58 AM
rating: 0
 
lemppi

I live in Iowa. I have MLB.tv. I'm a Tigers fan. So the Tigers v. Twins games? Blacked out. Tigers v. Royals? Blacked out. Tigers versus White Sox? Mostly blacked out. For good measure, just to twist the knife to their Iowa customers, all Brewers, Cardinals, and Cubs games are blacked out too just in case the Tigers have them during Interleague play. Its outrageous. Yes....I continue to buy the product, so maybe I'm part of the problem. But this shouldn't as hard to fix for their customers in Iowa and Nevada as they make it out to be.

Mar 21, 2011 07:36 AM
rating: 2
 
jaslhill

I live in Chicago and would rather not pay $100 a month for Cable. One of the reasons I do (and it's not the only one, but a big part) is to get the Cubs games that are not on WGN - which is about 60% of them, nowadays. I would rather pay for MLB.TV and do away with the cable ... unfortunately the blackout policy won't allow it.

There has to be a solution that makes it more profitable for everyone. 35 or so collective heads put together can't figure it out?

Mar 21, 2011 08:22 AM
rating: 3
 
jhardman

I'm in the RDU market as well, and my father in law is a diehard Braves fan 80 miles away in Greensboro. He won't make the trip to Raleigh during baseball season because he can't see the Braves because it's not our "local" market. The fact that Greensboro is "local" to Atlanta is just as absurd as Raleigh being "local" to Baltimore and Washington. Since I have to drive 4 1/2 hours to my nearest MLB stadium (Washington), I shouldn't be in anyone's "local" market.

Maybe MLB will one day realize this keeps people like me (diehard baseball fans living 3 or more hours from a stadium) from buying any of their packages besides the radio package. They leave my $100-$150 a year lying on the table. My local diehards all feel pretty much the same way.

Mar 21, 2011 08:50 AM
rating: 0
 
Matt Kory

I think Mr. deMause's point was that MLB does realize it, they just can't do much about it because of all those big, zombie lawyers with sharp teeth.

Mar 21, 2011 13:43 PM
rating: 0
 
bbienk01

Its not the lawyers. Its the clients.

Mar 21, 2011 18:39 PM
rating: 4
 
JoshuaL

I live in upstate NY and have only basic cable. I can't watch Yankee games on YES with that package (except for the 30 or so games broadcast on other channels) and I can't watch them on mlb.tv due to the reasons explained here. My only solution is to buy cable for an extra $65 a month ... which is not a solution in my mind. Until mlb.tv figures out a way to let me watch Yankee games I'm just going to live without it for now. I'd be happy to pay a reasonable upcharge for Yankee games on mlb.tv, but buying a higher cable package JUST for Yankee games is ludicrous.

Mar 21, 2011 09:15 AM
rating: 0
 
jsdspud

I live in Pittsburgh and I can't get the games when they are preempted by the hockey playoffs or on the road and not broadcast locally. There has to be a way for MLB.tv to allow local games when the rights holder chooses not to broadcast them.

Mar 21, 2011 09:36 AM
rating: 0
 
Peter Benedict

Until this year, the Twins always had a Sunday game on local TV. My wife and I just cut our cable, and now poof... the Twins no longer have a single game on broadcast :-/

Mar 21, 2011 11:16 AM
rating: 0
 
pentavarit

It is frustrating. I live in Nashville, TN and it sits in both the Atlanta and Cincinnati blackout markets. My argument was that they don't broadcast all of those teams games here, so I can't watch them on cable! I sent an email to a sportswriter friend of mine who put me in touch with a VP of Operations at MLB and he said they were working on a solution. That was 2 years ago.

Mar 21, 2011 12:01 PM
rating: 0
 
thegeneral13

One element of the blackout restrictions not discussed here is the Saturday afternoon monopoly that Fox has, and this would be much easier to address. This is actually the biggest PITA for me; I don't live in my favorite team's market, so I can watch them on MLB.tv pretty much whenever I want - except for the time I am most frequently able to do so! Saturday afternoon would probably make up 1/2 of all my baseball watching if there weren't any blackouts, b/c it's also usually when I have the most time to flip around and watch other teams. I think Fox's contract runs through 2013, but it would be easy for MLB to stipulate in the next contract that MLBAM would retain the right to make broadcasts of every game available online, subject only to local blackout restrictions. Now, clearly Fox paid for that exclusivity, and MLB will only exclude it from the next contract if it thinks it can make those dollars up elsewhere, but it seems like there would be better ways to monetize Saturday afternoon baseball than by showing only one game. Unlike Sunday or Monday night, I'm not committed to sitting in front of the TV on Saturday at 4 pm, so if there's only one game on and I don't care about it, I'll do something else. If I could watch virtually any game, I'd do it. I don't know what the implicit value is for Saturday afternoon exclusivity - perhaps it is so high that MLB can't turn down the money - but it seems like MLBAM should reclaim rights to these games as a first step toward reducing fan frustration with blackouts.

Mar 21, 2011 12:25 PM
rating: 3
 
bobbygrace

Thanks for writing about this frustrating issue. I hope it spurs MLB to get its act together and work out a deal to get rid of the blackouts.

As an aside, I enjoyed the first paragraph. I remember fishing with my dad in northern Minnesota at night, looking for a signal for the Twins broadcast. We ended up somehow picking up a Tigers game. That's how I learned who Ernie Harwell was.

Mar 21, 2011 13:17 PM
rating: 0
 
xnumberoneson

I'm not an MLB-TV subscriber, but have had the same kind of frustrations with the blackout policy as a subscriber to the MLB Extra Innings package. As a Mets fan living in Phillies territory, I have to go to a sports bar to watch 10-15 Mets/Phils games a year. I've pretty much stopped doing that, though. As you can imagine, it's not very pleasant being the only Mets fan in a room full of intoxicated "Phanatics."

It's mind-boggling that MLB is unable to provide its own content to customers who are willing to pay for it.

Mar 21, 2011 15:52 PM
rating: 1
 
bdoyle978

I got my xm radio. I'm happy

Mar 21, 2011 16:56 PM
rating: 2
 
fatted

Any reviews of the mobile apps for MLB? I am wondering if I should get the MLB At Bat Android app for $15, but I'm afraid it isn't worth it because of similar annoying rules. Has anyone purchased that? Is it worth it?

Mar 27, 2011 17:52 PM
rating: 0
 
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