As MLB Ponders Centralizing Revenue, Don’t Expect Sponsorship To Be in the Mix

In the wake of Diamond Sports Group’s massive financial troubles and the weakened economic picture for all regional sports networks thanks to cord cutting, Major League Baseball commissioner Rob Manfred has floated the idea that the league could create a national streaming service, which would consolidate live broadcast rights now controlled by teams.

While there are many dominoes that would have to fall for that to happen, it is at least in the realm of possibility, albeit somewhere down the road. If it were to happen, as Manfred told The Athletic, “I think as you move more national, by definition, you’re going to have more central revenue.”

With centralized revenue comes revenue sharing, which could help address the cavernous gap between big-market, deep-pocketed teams and smaller-market clubs owned by those with fewer means. While far from a cure-all, it would at least be a step toward addressing the disparity that has been thrown into high relief by the spending of the New York Mets’ Steve Cohen, a hedge fund billionaire who is now the league’s richest owner. (A more immediate step was MLB’s recent formation of an economic reform committee to explore possible solutions.)

When it comes to centralized media rights, the NFL is the lone major U.S. pro sports league to control live game rights, distributing the revenue equally among all 32 teams. With profitable franchises and close to on-field parity, it’s clear why the NFL model would be tempting to Manfred and others in baseball.

There is another centralized revenue model that has proven successful in sports—the International Olympic Committee’s nearly 40-year-old TOP program, which has the global governing body selling exclusive worldwide sponsorships and parceling out 90 percent of the proceeds (the total of which will be approximately $3 billion in the 2021-24 quadrennium) to the local organizing committees of the summer and winter games, as well as the 206 national Olympic committees. Those entities sell and retain sponsorship revenue in local categories.

Although the system has worked very well for the Olympic movement, it’s highly unlikely, even as MLB considers centralizing media rights, that it would look to a sponsorship structure similar to TOP as one of its economic reform efforts for a number of reasons.

First, the nature of the relationship between the IOC and the other parts of the Olympic family is far different than a pro sports league office and its independently owned teams.

In addition, at the time TOP was created, most national Olympic committees and sport governing bodies did not have much experience and expertise in selling and servicing corporate partnerships, quite the opposite of MLB clubs. With upwards of 1,000 existing team sponsorships in MLB, trying to carve out national categories would be a monumentally difficult process, much different than the relatively clean slate the IOC was able to start with in the 1980s.

So even though emulating the NFL in media rights will be an uphill battle for baseball, it is one that many seem prepared to fight. But taking after the IOC in sponsorship is a mountain no one is prepared to climb.