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MLB owners, players, and fans are all bracing for what is sure to be a heated offseason of labor negotiations. There’s a practical consensus that a lockout will occur as owners try and implement a salary cap that the players have long been united in opposing. The only question is how long this lockout will last.
New reporting from Maury Brown in Forbes indicates that there are some provisions in the league’s current media rights contracts that could compel both sides to the table if a lockout drags on.
Per Brown, MLB’s national media deals include “contract language that would push current media rights out past 2028 for an additional year should a certain threshold of games be missed.” As it stands, all of MLB’s national broadcast deals are set to expire following the 2028 season, with the league expecting a sizable increase in rights fees when it brings its inventory back to market. However, if a lockout extends past the threshold outlined in the league’s contracts, causing media partners to miss too many games, an extra year would be tacked on to the existing contracts, forcing MLB to miss out on a full season of higher media rights fees.
If MLB could secure an NBA-esque increase in its media rights deals, that could mean billions in lost revenue.
It’s unclear exactly what the threshold of missed games would be to cause this provision to be triggered.
Brown also reports that there are provisions in the current contracts that stipulate broadcast partners will make their scheduled rights payments to the league during a lockout. In theory, this gives the league and owners a bit more breathing room in negotiations because they are still getting paid while the player’s miss paychecks. Then, after the lockout ends, the league reimburses the networks for any missed games.
But given the timing of these CBA negotiations, and the opportunity cost associated with the possibility that MLB might have to extend its current media deals for an extra year if a lockout goes too long, the players have credible leverage to hold out knowing that the league won’t want to miss an entire season of increased media revenue.
Negotiations are shaping up to be very interesting this offseason.
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