When MLB Commissioner Rob Manfred cancelled the first two series of the regular season, one thing that popped into my mind (after, of course, the negative thoughts towards Manfred and MLB ownership) dealt with regional sports networks. Specifically, how long would the start of the season need to be delayed before RSNs could stop paying teams for games that weren’t happening?
According to Ken Rosenthal of The Athletic, the number is around 25 games, or roughly a month of play.
April is typically a month of low attendance and revenue for many clubs, particularly those in colder climates. Local television contracts generally do not require clubs to issue rebates to their networks until about 25 games are missed, according to a source with knowledge of such deals. And the big money in the league’s national-television contracts comes from the postseason.
With the games already cancelled, this means roughly 19 or so games would also need to be axed before teams would need to worry about losing those all important rights fees from RSNs (some of which the teams have ownership stakes in).
If we get to that point without MLB games, RSNs themselves might start sweating about having to rebate carriers. We saw this in 2020 at the start of the pandemic, when Sinclair confirmed that there were minimum game requirements in its contracts that were resolved at the end of the season or calendar year. That year, the refunds Sinclair received from teams were exceeded by the rebates paid out to carriers. In 2020, the minimum MLB games requirement for Sinclair was reportedly 142 games.
So right now, there’s wiggle room for MLB ownership. They’re losing money by missing six games in April, but a minimal amount. However, if the lockout continues on and games past the end of April are cancelled, things could start getting ugly financially for MLB, its teams, and the RSNs that bring in so much revenue for baseball.