A federal investigation that initially targeted the NFL’s broadcast model is now widening its net, pulling Major League Baseball and its commissioner, Rob Manfred, into a high-stakes battle over antitrust laws. It’s been about a week since the NFL’s federal scrutiny began.

The most popular sports league in the US moved its most-viewed games of the season from network television to streamers, which attracted an investigation into the adherence to antitrust laws. But while we thought that the investigation would be limited to the NFL, the FCC confirmed that the focus has always been broader.

“You could make the argument that there are other sports leagues out there that are potentially pushing the limits of the Sports Broadcasting Act even further than what the NFL has,” FCC chair Brendan Carr confirmed to Bloomberg.

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MLB, NBA, and other American sports leagues are all in line to face the scrutiny. And it has just added another layer to the already fragmented broadcasting deal done by MLB commissioner Rob Manfred.

The issue originates from the 1961 Sports Broadcasting Act.

This equips the sports leagues to bundle their products on behalf of their teams and negotiate media deals collectively. However, while it helps the leagues in maximizing their revenue, fans are bearing the brunt. For instance, the NFL shifted its Thursday Night Football from FOX to Amazon Prime Video in 2022.

Reportedly, the NFL’s bundled deal includes Thursday Night Football, a wild-card playoff game, and Christmas Day games fetch around $400 million per year. Similarly, MLB bundled its Sunday Night Baseball games to NBC till 2028 for around $200 million per year.

Per DOJ, the 1961 antitrust exemptions were applicable when the games would have been broadcast for free over-the-air television, not through a paid streaming platform. According to Carr, the law referred to “telecast,” offering the products through free over-the-air television.

The leagues, including MLB, are surely not adhering to this clause, thus attracting further scrutiny.

Per MLB’s latest broadcasting deal, platforms like Netflix, NBC/Peacock, ESPN, FOX, TBS, Apple TV+, and MLB Network are all involved in a fragmented show of games. Fans may pay over $100/month for comprehensive access across all platforms. The broadcasters blame the increased costs of the bundled packages.

But now that the federal scrutiny is covering MLB as well, their path to centralize the broadcasting rights might take a hit.

MLB’s NFL-style broadcasting plan is taking multiple blows

For Manfred, the NFL is what MLB is following to implement its new broadcasting rights.

He is eyeing a bundled broadcasting package for all 30 teams, same as the NFL does. And in doing so, MLB has already become the official broadcasting partner via MLB.tv for seven teams. The Brewers, Cardinals, Marlins, Rays, Reds, Royals, and Tigers have all joined the league’s central TV umbrella.

Reportedly, there will be a total of 14 teams, whose broadcasting will be covered by MLB. This is the first step towards avoiding the regional sports networks in MLB. But is that possible or viable?

Teams that opted for the MLB Network are reportedly losing out on revenue.

“Brewers owner Mark Attanasio estimated a minus-$20 million impact from the TV situation this season in terms of revenue/expenses. Called it a ‘$20 million surprise’ but one the team had budgeted for,” MLB insider Curt Hogg noted.

Reduced broadcasting revenue means a shrunken payroll, which itself dilutes the objective of MLB’s media plan.

Moreover, teams like the Dodgers, who have multi-million dollar regional media deals ($8 billion as of 2023), are highly unlikely to take a cut and join the MLB broadcasting bandwagon. And now with Federal scrutiny around the corner, MLB’s biggest challenge to survive its ambitious broadcasting plan is here.