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Touched on this issue on BP a few weeks back. From Forbes:

The next hurdle: offering live games in fans’ home markets. With lucrative local cable deals driving so much team revenue, MLB has restricted web viewing to out-of-market games, targeting the displaced fan looking to see his favorite team from another city. But Bowman figures fans are just about at the point of expecting content on the web and television alike. The plan is to make in-market games available only to area cable subscribers. For example, only the Yankee fan subscribing to the YES Network would be able to see a game from his laptop on MLB.com while commuting or traveling. He hopes to unveil the service in some cities before the 2009 season ends.

The biggest potential beneficiaries of MLB’s growing reliance on Web dollars: Baseball’s small market clubs. Unlike local cable television, which creates revenue disparities as each club makes its own deal, all online revenue is shared equally.

This leaves MLB and BAM in charge of negotiating with every cable provider that airs MLB games. That’s going to slow down the process, and will probably result in MLB leaving money on the table in the short- and long-term.

But for small market teams, this policy is tremendous. Imagine if all local television revenue was pooled together; this is what MLB is doing with local digital rights, which will inevitably be more lucrative than TV rights at some point in the future. John Henry and the Red Sox realize this, which is why they’ve been fighting for control of these rights for years. If other large-market teams understood what was going on here, they’d probably be doing the same.

The question is, will this setup even be tenable once local digital rights become a huge source of revenue? This might end up being the next major source of class warfare in baseball, and it may come down to who the next commissioner is. Bud is a great friend to small market teams, so it’s no surprise that this is the direction MLBAM is taking at the moment. But if the next boss has more friends in Boston and New York, don’t be surprised if this policy reversed.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

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  1. on March 20th at 05:17 pm
    Jon said:

    I live in Iowa and I’m a Detroit Tigers fan. I hate that I can’t get Twins/Tigers games on MLB.TV due to the fact that I’m supposedly living in Twins TV Territory. Note to MLB, the Twins aren’t on here! Nor the Brewers which are blacked out….and many Cardinals games….several Cubs…..but hey we get the Royals!! The Royals are geographically the closest to Des Moines and the AREN’T blacked out. Very frustrating….will this new deal do anything for me, a DirecTV and MLB.TV customer?

  2. on March 21st at 11:50 am
    Shawn Hoffman said:

    Hey Jon — unfortunately you probably won’t. The plan as of now is to make local games available on MLB.tv ONLY if you subscribe to a cable provider that offers those games on TV. So if you don’t have the Twins on your local cable, you won’t be able to get Twins games online. Very frustrating, I’m sure.

  3. on March 22nd at 03:12 pm
    Ben said:

    “Bowman was one of the sports industry’s early believers in the subscription model on the Web, one that the NFL, NHL and NBA are now employing in one form or another. Free content built around advertising alone just doesn’t hold up, as newspaper executives have learned the hard way. His plan is a mix of ad-supported content and paid subscriptions A cable TV model, as opposed to the broadcast TV model. “You’ve got two revenue sources, with one supporting the other,” he says.”

    That doesn’t seem too promising.

  4. on March 22nd at 07:47 pm
    Jon said:

    Thanks for the reply Shawn. I didn’t think this development would help me but I just felt like venting! These archaic blackout rules need to change. There was talk last year that it would be addressed but it was tabled I guess. Anyhow….I like “Squawking Baseball.com” very much and I’ve enjoyed your 3 or 4 articles on BPro. Keep up the good work. I’ve linked this site to some friends and mentioned (with attribution of course!) your points many times in my blog posts on a Tigers’ Forum.

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