Earlier this month, ESPN informed MLB that it would opt out of the final three years of its $550 million annual rights agreement after this year. At the time, MLB tried to save face, calling the breakup mutual.
It wasn’t.
A new report from the Wall Street Journal details how ESPN was, however, willing to keep the package–but for $350 million less per year.
At $200 million annually, ESPN would have paid less for MLB than it does for the NHL ($400 million). Granted, ESPN only broadcasts MLB’s C-package, which includes Sunday Night Baseball, the Home Run Derby, and the Wild Card round.
To ESPN, that specific MLB package was not worth $550 million.
The question for MLB is whether it can find a partner—or partners—willing to pay an annual fee closer to the $550 million mark or the $200 million mark that ESPN offered to keep the package.
The rumored suitors include NBC, Amazon, and Netflix.
NBC, a broadcast network, would be the ideal fit. However, it’s hard to imagine NBC would want to pay anywhere close to $550 million a year for ESPN’s package.
Amazon and Netflix likely won’t either, though they certainly have the means to do so.
Further, MLB commissioner Rob Manfred called ESPN a “shrinking platform” in a memo to owners addressing the network’s decision. While accurate—ESPN is in nearly 50% fewer homes than in 2011—far fewer people would watch baseball on Amazon or Netflix than on ESPN.
The most likely scenario might involve baseball dividing the package and attempting to sell it to NBC and a streamer. Manfred better just hope that the combination totals more than $200 million per year.
As we argued last week, MLB’s best situation was with ESPN.
Ultimately, MLB is the second-most popular professional sports league in America, behind the NFL. But its popularity isn’t measured by national television ratings. The league’s popularity is best found in local television markets, and in most of which, it rates higher than the NBA.
MLB is a regional sport. It doesn’t have the national cachet of the NFL or even the NBA. For example, more people in Michigan watch the Tigers than the Pistons but watch more national NBA games than national baseball games.
Baseball doesn’t garner much national attention until the postseason when games air primarily on Fox and TBS.
That’s the issue. The MLB package ESPN is currently paying for is more niche than mainstream. And yet Manfred expects someone to pay mainstem dollars for the packages.
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