Earlier this month, I posted here about the possibility of ESPN opting out of the last three years of its deal with MLB. The TV network had until March 1 to make this decision.
Now, that’s happened. Evan Drellich has details in this article in The Athletic. Bottom line, literally: MLB will have to find some way to make up the $550 million per year that ESPN was paying for broadcast rights. I’ll get to that in a moment, but first I want to share with you the statements released by both ESPN and MLB after this decision was made.
First, ESPN:
“We are grateful for our longstanding relationship with Major League Baseball and proud of how ESPN’s coverage super-serves fans. In making this decision, we applied the same discipline and fiscal responsibility that has built ESPN’s industry-leading live events portfolio as we continue to grow our audience across linear, digital and social platforms. As we have been throughout the process, we remain open to exploring new ways to serve MLB fans across our platforms beyond 2025.”
A bit later Thursday, MLB responded:
“We have had a long and mutually beneficial partnership with ESPN that dates back to its first MLB game in 1990. Unfortunately in recent years, we have seen ESPN scale back their baseball coverage and investment in a way that is not consistent with the sport’s appeal or performance on their platform. Given that MLB provides strong viewership, valuable demographics, and the exclusive right to cover unique events like the Home Run Derby, ESPN’s demand to reduce rights fees is simply unacceptable. As a result, we have mutually agreed to terminate our agreement.
“Entering the 2025 season, MLB is enjoying tremendous momentum led by generational talent on the field and an entertaining brand of baseball due to rule changes which have improved the pace of play and action on the field. The results have generated increases in attendance, viewership, streaming, international growth and overall fan engagement. The positive energy around the sport has also led to significant interest from both traditional media companies and streaming services who would like to obtain rights to MLB games. We will be exploring those opportunities for a new agreement which would start in the 2026 season following the conclusion of ESPN’s agreement at the end of this year.
“The MLB-ESPN partnership has been an important and long-lasting relationship that has helped both organizations achieve great success. As we get ready for the 36th season of Sunday Night Baseball, we look forward to a successful final year of MLB on ESPN in 2025.”
The ESPN statement was somewhat positive and conciliatory. MLB’s, though… makes it sound like a messy divorce.
The question is, who’s going to replace that $550 million? While it’s only about 4.5 percent of the reported $12.1 billion the sport made last year, that’s not nothing. And baseball has not made anywhere close to that with recent streaming deals. Last year Apple paid $85 million for the rights to 50 games, and Roku about $10 million for 30 games. Now, neither of those included postseason rights, which ESPN had, nor did either of those streaming deals have an exclusive once-a-week game like Sunday Night Baseball.
It does seem possible, I suppose, once the posturing ends, for ESPN and MLB to come to another agreement. If they do, though, it likely won’t be for $550 million a year. From the Drellich article:
The network was due to pay the league an estimated $550 million each of the next three years, which it deemed way above the current market value, according to people briefed on the network’s thinking.
Drellich also quoted from a memo sent to MLB team owners by Commissioner Rob Manfred:
“We do not think it’s beneficial for us to accept a smaller deal to remain on a shrinking platform,” Manfred wrote. “In order to best position MLB to optimize our rights going in to our next deal cycle, we believe it is not prudent to devalue our rights with an existing partner but rather to have our marquee regular season games, Home Run Derby and Wild Card playoff round on a new broadcast and/or streaming platform.
“To that end, we have been in conversations with several interested parties around these rights over the past several months and expect to have at least two potential options for consideration over the next few weeks.”
Those “two potential options” very likely are Amazon and Netflix, who both have streaming deals with the NFL and who might come close to paying MLB what ESPN had been paying. This article indicates that Comcast (who owns NBC) and Paramount (who owns CBS) might also be interested.
At Cactus League Media Day earlier this week, Manfred noted that “streaming alone does not produce the kind of revenue we’ve been accustomed to,” which you have clearly seen in some of the local deals that some teams (Twins and Cardinals, in particular) have had to take when their RSN deals with Diamond Sports ended. Both teams have reduced player payroll significantly as a result.
ESPN will, as noted in both the statements, continue to carry MLB games this year, including Sunday Night Baseball, the Home Run Derby and Wild Card Series. After that… well, you know what’s coming… “as always, we await developments.”
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