The Juan Soto sweepstakes are a stress test for the economics of MLB

In comparison to the NFL, NBA and NHL, where salary caps level the playing field for teams in a way that masks each team's underlying revenue picture, Major League Baseball takes a lot of heat for its lack of parity.

There's a disconnect between that perception and reality. The next team that wins the World Series in back-to-back years will be the first this century. The 2024 season saw no team win 100 games for the first time in 10 years (pandemic season excepted). So, why all the fuss?

Much of the grousing comes from the owners of MLB's smallest-market teams, who face a challenge every offseason trying to compete with their big-market brethren. Fans like to see their owners try to win championships, but they'd rather see them win a certain way — by signing marquee free agents, trading prospects for established stars, and preferably both of the above. Most teams simply can't do that without sacrificing the future for the present. The few small-market teams that have had consistent success putting a winner on the field (namely the Rays, the Guardians, and the Brewers) never have the sexiest offseasons.

All of these factors are exacerbated by the Diamond Sports Group bankruptcy proceedings. Last Friday, Major League Baseball and the Atlanta Braves filed an objection to Diamond's reorganization plan submitted in bankruptcy court.

Diamond, the owner of the recently rebranded FanDuel Sports Networks, could lose at least five MLB teams from its list of broadcast partners between the 2024 and 2025 seasons, leaving a cloud of uncertainty over those teams' revenue streams.

MLB announced it would take over the local broadcasts for the Minnesota Twins, Milwaukee Brewers and Cleveland Guardians after last season. The Texas Rangers and Cincinnati Reds are also leaving Diamond; who will air their 2025 games and how has yet to be announced.

A bankruptcy court judge will submit his input on Diamond's reorganization plan, and the subsequent objection, at a hearing scheduled for Thursday.

The upshot of all of this is an old, predictable story. Broadcast revenues are separating MLB's haves from its have-nots. Now, because of the RSN turmoil, the have-nots figure to have even less money to spend in the short term than any winter in recent memory.

This offseason, that carries a very specific consequence: if your team has a stable RSN situation, it has a chance to bid on Juan Soto, the winter's prize free agent. If not?

ESPN's Jeff Passan described the sad state of affairs: "The stark local TV divide grows more obvious by the upcoming Diamond Sports court hearing. The biggest teams — the Los Angeles Dodgers, New York Yankees, New York Mets, Boston Red Sox, Chicago Cubs, Philadelphia Phillies, San Francisco Giants, Toronto Blue Jays — all have stable RSN situations. The number of small-market teams affected by the potential failure of Diamond — the Cleveland Guardians, Milwaukee Brewers, Cincinnati Reds, Kansas City Royals and Tampa Bay Rays, among others — only deepens a financial chasm that already existed."

It should come as no surprise that the Yankees, Mets, Blue Jays, Red Sox, Dodgers and Giants are six of the eight teams reported to be meeting with Soto this month in California. Speculating here, but the two "mystery teams" Jon Heyman has yet to identify could well be the Cubs and Phillies.

Soto is widely expected to command the most money of any free agent this offseason, if not ever. If your team isn't meeting with Soto this month, don't blame management. Blame a dastardly concoction of market size and cord-cutters.

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