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Fri. 3 Dec 2021, 11:05am ETBenzinga
In: News, Small Cap, Sports, General

For the first time in more than 25 years, Major League Baseball has entered a lockout. Here’s what this means for MLB and its fans, as well as the stocks that could be impacted.

What Happened: Major League Baseball and the Major League Baseball Players Association failed to reach an extension on Dec. 1, officially entering a lockout at 12:01 a.m. EST on Dec. 2.

“I am so disappointed about the situation in which our game finds itself today,” MLB Commissioner Robert Manfred said in a statement.

Despite the current lockout, Manfred is hopeful this is the best scenario to protect the 2022 season, set to begin on March 31, 2022.

“We hope that the lockout will jumpstart the negotiations and get us to an agreement that will allow the season to start on time.”

Manfred said the current offering from the Players Association would threaten some teams from being competitive and isn’t a current “viable option” for the league. Manfred said the Players Association has been unwilling to compromise.

Major League Baseball has no salary cap and no maximum length or dollar amounts for player contracts.

Proposals offered by the league have included minimum payroll for teams, free agency based on age and not service time, enacting a universal Designated Hitter, creating a MLB Draft lottery and additional items.

“Today is a difficult day for baseball, but as I have said all year, there is a path to a fair agreement and we will find it,” Mandred said.

The last MLB lockout happened during the 1994 season and led to the cancellation of hundreds of games and the entire postseason, including the World Series.

Related Link: Atlanta Braves Win Their First World Series Title Since 1995: What Investors Should Know 

Stocks Impacted: A lockout could impact the 2022 season and lead to spring training starting late and the potential of postponed or moved games to complete a full season.

MLB teams could be financially hit the hardest as the lockout brings free agency and contract talks with players to a halt. Missed games mean missed revenue from fans, which could put them at risk of lowered revenue similar to during the COVID-19 pandemic with less games and fan restrictions.

The Atlanta Braves are publicly traded as Liberty Braves Group (NASDAQ:BATRA)(NASDAQ:BATRK) and could see the stock impacted as the lockout progresses.

Rogers Communication (NYSE:RCI) owns the Toronto Blue Jays, a team it was seeking to sell a partial stake or more. The sale talks could be put on hold by the lockout and impact the company’s financial situation.

Sinclair Broadcast Group (NASDAQ:SBGI) owns 21 regional sports channels. Many of the channels offer exclusive local coverage of MLB teams. Missed games could greatly impact advertising revenue and affiliate leverage with cable providers.

TBS, owned by AT&T Inc. (NYSE:T), and ESPN, owned by Walt Disney Co (NYSE:DIS) have deals with MLB to air and stream games. Sporting events have been a cash cow for sports networks given the demand to watch live as opposed to on-demand.

Photo: Lesly Juarez via Unsplash