Analysis: Rob Manfred could remove blackouts tomorrow
But for various reasons, he probably won't + musings about the state of FanDuel Sports Network
With the news today that all nine Major League Baseball teams tied to FanDuel have ended their contracts, an interesting situation emerges: Major League Baseball now essentially controls the local rights to 16 teams. If they wanted to, they could quite easily create a true streaming RSN and eliminate blackouts for those 16 teams. But they almost certainly won’t.
It’s important to establish why blackouts exist. Contrary to popular opinion, blackouts are not intended to get fans to attend games. Rather, they are crucial for the lucrative contracts signed by regional sports networks. They force consumers to join the cable bundle, or pay high prices for the FanDuel Sports Network streaming service, in order to watch games.
Because blackouts ensured strong profits for regional sports networks through the cable bundle, teams were able to secure extremely lucrative contracts in return. The Dodgers, for example, receive $335 million per year for their local rights through Spectrum. Baseball has far more inventory than any other sport, so its contracts with these networks are by far the most lucrative. As a result, MLB teams rely on local television revenue more than any other league.
The timing of the FanDuel situation is also very bad for baseball. In order to recoup local media revenue, MLB will almost certainly look to bundle all of these teams together and sell in-market streaming rights to companies such as Amazon, ESPN, and Google, or even firms like Facebook, Apple, and Netflix. Major League Baseball recently had some short-term rights on the market, but announced an agreement with ESPN instead. With the news breaking so close to the start of the 2026 season, and with MLB planning to bring all of its rights back to market after the 2027 season, a short-term deal for these teams seems unlikely.
The opt-outs suggest that MLB is betting that FanDuel’s holding company, Main Street Sports Group, will soon file for bankruptcy. Based on comments made during the last bankruptcy process, and the general state of the regional sports network industry, it would be surprising if this were not a Chapter 11 bankruptcy intended to liquidate assets. Now that teams are no longer tied to FanDuel, they can freely search the open market for alternatives while continuing to negotiate with FanDuel. In bankruptcy, these contracts are much harder to discharge quickly, which gives teams much more flexibility.
I have seen some suggestions, especially on Twitter/X, that there is no way teams will be back on FanDuel next season. That is wrong. While it is extremely unlikely, if FanDuel can find a bidder to keep the company afloat, teams will eagerly return for the level of guaranteed money only FanDuel can provide. As this was being written, Sports Business Journal reported that new offers were made to teams. The teams still have a huge amount of sway on where teams go. Manfred only theoretically controls these rights.
In my opinion, there are only a few companies that can save FanDuel at this point. As previously reported by Sports Business Journal, any bidder would need to negotiate both rate cuts and longer-term extensions to team deals. If those bidders were the companies mentioned earlier, Amazon, ESPN, and Google as a top tier, or Facebook, Apple, and Netflix as a second tier, teams would be interested. It seems extremely likely that both the NBA and MLB will eventually go to market with local rights to one of those companies. If teams can get in front of that process and ensure unshared revenue for themselves, they will take that opportunity.
But not just any company will do. DAZN learned that teams were not interested in trying to launch a new service using their in-market rights. DAZN also has its own financial problems, which almost certainly factored into that deal falling apart.
Amazon has seemingly already explored an investment. Fubo, which is owned by Disney, has also potentially emerged as a bidder. If FanDuel were to survive, that is almost certainly how it would happen.
If FanDuel does fold, the question becomes how soon. FanDuel has said it will operate through the end of the NBA and NHL seasons. However, it has already missed payments to multiple, if not all, of its NBA teams. That does not suggest strong long-term solvency.
If FanDuel does fold, expect NBA teams to move in a slightly different direction than MLB teams. After signing a record-breaking national media rights deal with ESPN, NBC, and Prime Video, NBA teams are far less reliant on local media revenue compared to MLB teams.
At least four NBA teams, the Trail Blazers, Pelicans, Suns, and Jazz, have moved entirely to a reach-focused model where all games are available on over-the-air television. Notably, zero Major League Baseball teams have taken the same approach. If FanDuel folds, NBA teams are much more likely to explore this option than MLB teams.
An interesting wild card is the NHL, which is not as reliant on local media revenue as MLB, but also generates far less revenue than the NBA. As a result, the loss of this revenue stream could be more significant than it would be for NBA teams. Similar to the NBA, a number of NHL teams have already moved to over-the-air distribution.
The future of how fans watch local games from the NBA, MLB, and likely the NHL is very dependent on how much money leagues can generate by bundling local rights together to create a true streaming RSN. Whichever league goes to market first may affect the market for the second league.
Additionally, readers should be careful with what they read. There will be narrative-setting by certain companies directed toward certain media outlets that may be based entirely on hope rather than reality. The original Wall Street Journal report about DAZN nearing a deal with FanDuel made no mention of the financial distress the regional sports network industry was facing.