Major League Baseball (MLB) owns MLB Advanced Media, a media technology company that powers not only its own sports stream but also operations of other providers. So far MLB.TV offers MLB team and player information as well as streaming all spring training games to mobile devices. Regular season games are so far subject to regional block-outs, which means that games of local teams are typically not shown.
Several newspapers in the USA have reported that consumers will be able to see videos of their local teams based on MLB negotiating with a national distributor to provide games to its subscribers. This is a very interesting approach to extend the attraction of live sports streaming. While this could be seen just as a way of creating additional revenue from a sports association, it also shows that MLB thinks that it can create additional income from streaming its events. Besides the monetary attraction, it may also show some awareness of generational shifts in the sports viewership.
However, this deal comes together with another announcement that adds a complete new dimension. MLB Advanced Media is also powering streaming services from WWE, Sony’s OTT service, VUE and HBO’s upcoming streaming service. According to MLB, its subsidiary took in $100 million in the last year. MLB also believes that the subsidiary could be valued at $5 billion in the future.
MLB is planning on holding on to MLB.com and its baseball ticketing operations but split out the streaming company. It would like to maintain ownership but is looking for minor investors that could extend the scope of the company to reach the full potential MLB envisions. It seeks minority investors and is in talks with up to 40 companies, including some very serious companies.
If the MLB can pull this off, the streaming arm could become a major player in the world of streaming video. At the same time, OTT and streaming services are about to define the home entertainment space in the future. With such high stakes it seems unlikely that a subsidiary of the MLB can bring together major players in the industry to create a significant platform that rivals other networks. It will be interesting to see who is interested in partnering with the MLB, once the discussions have been completed. – NH
