Spectrum’s New Dodgers Streaming Service Clouds an Already Hazy Future for MLB

The Los Angeles Dodgers ventured into new territory for their season opener this week. Not Tokyo, where the team bested the Chicago Cubs in a two-game series, but direct-to-consumer streaming.

Tuesday marked the debut of SNLA+, a new à la carte streaming version of the Dodgers’ regional sports network Spectrum SportsNet LA. It’s the first avenue for fans to stream most of the team’s games outside of the cable bundle and the latest entrant to an increasingly crowded field of streaming options for Major League Baseball viewers.

It could also significantly complicate matters for the league — at a moment when it is desperately trying to streamline and simplify its televised future.

MLB’s current broadcast rights are a byzantine tangle of local and national contracts, with 23 of the league’s 30 teams (now including the Dodgers) offering direct-to-consumer streaming options for their local markets. Certain games, however, are broadcast nationally by ESPN and Fox, with additional packages held by Apple TV+ (which allows some local broadcasts) and the Roku Channel — until the close of this season, that is.

ESPN recently announced it was ending its 35-year relationship with MLB, exercising an opt-out clause to terminate its current contract three seasons early. Execs at the Disney-owned sports giant were reportedly frustrated by the smaller deals struck with Apple and Roku, while ESPN continued to shell out $550 million per year for its MLB rights.

The breakup makes it all the more urgent for MLB Commissioner Rob Manfred to carry out his master plan: building out new national packages, akin to the NFL and NBA, to sell to the major streamers in 2028, when most of the league’s local media contracts expire.

But doing so will not be an easy sell for teams such as the Dodgers. MLB clubs currently handle local media rights themselves, hence the aforementioned Gordian knot of regional sports networks. Manfred’s attempt to slash through this knot will require persuading as many teams as possible to surrender those rights to the league and submitting to new revenue-sharing agreements for national broadcasting contracts.

This would be a windfall for small-market teams, whose media rights are not worth much on their own, but a much less enticing prospect for popular large-market clubs such as the Dodgers and the New York Yankees. It’s an extension of baseball’s longstanding economic disparities, with wealthy teams dominating a league with no salary caps and, therefore, little serious competition for the best players.

Now with the launch of SNLA+, the Dodgers’ streaming platform, yet another top club has opted to try reaching cord-cutting fans directly, opening a potentially lucrative new revenue stream as the team’s popularity soars. It’s difficult to estimate how much revenue the new streamer will generate for the team, but it’s fair to say SNLA+ will fare better than, say, the Pittsburgh Pirates’ SNP 360.

As such, MLB’s Manfred is certain to face significant challenges convincing the Dodgers organization to give up the regional broadcasting arrangement, which would place the league in an immensely difficult position. A national rights package lacking the most popular teams in baseball would obviously fetch far less money than one including such teams and potentially exacerbate the already vast divide between the league’s haves and have-nots.

The national plan faces another hurdle in Spectrum parent Charter Communications, co-owner of the linear SportsNet LA network and SNLA+. Time Warner Cable (acquired by Charter in 2016) struck a 25-year agreement with the Dodgers in 2013, meaning the team’s local rights technically aren’t available for another decade after Manfred plans to launch his national packages — though the league would likely be willing to pay whatever is required to extricate the Dodgers from that contract.

But the new streaming option complicates this prospect as well, as SNLA+ offers Charter an incremental revenue opportunity as its core pay-TV business declines rapidly. There is likely a not-insignificant number of Dodgers fans who wouldn’t ever pay for cable but will subscribe to SNLA+, and the streamer’s popularity, if there is any to speak of, could end up inflating whatever MLB must shell out to claw back the team’s rights.

Manfred’s best hope, then, is for SNLA+ to fail to justify its existence, for subscriptions to fail to offset declining cable revenues and for the Dodgers to turn to the league for remedy. No doubt the commissioner will be watching the streamer’s fortunes carefully over the next few seasons while he negotiates with the Dodgers and other popular teams.

No doubt, also, that it will be a tense standoff at a crucial time for the future of America’s pastime. Much now depends on whether the Dodgers’ latest play will be a home run, a strikeout or something in between.