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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

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