ESPN and Major League Baseball are parting ways after this season, commissioner Rob Manfred said Thursday.
In a memo obtained by Evan Drellich of The Athletic, Manfred told league owners that MLB and ESPN have mutually agreed to terminate their contract at the end of this season, bringing an abrupt end to ESPN’s nearly four-decade tenure. ESPN has for years been expected to exercise an opt-out in its contract after this season, a move that until the past few weeks was viewed as a prelude to a renegotiation, rather than the end of the sides’ relationship.
That assumption was challenged earlier this month when The Athletic reported that MLB was unlikely to renegotiate a new deal with ESPN if the network chose to opt out.
While Manfred characterized the decision as mutual — and both sides had the right to opt-out — the decision to opt out was solely made by ESPN, per a source.
Manfred said in his memo that ESPN had engaged in an “aggressive effort” to reduce its $550 million/year rights fee, using the league’s comparably paltry deals with Apple ($85 million/year) and Roku ($10 million/year) as rationale. Manfred said that ESPN’s argument was “inapt” as the network has a fully exclusive window — Apple and Roku games, while exclusive, compete with games on other networks — plus the Home Run Derby and Wild Card playoffs.
More importantly, Manfred cut to the core of the ESPN business model, saying that MLB does “not believe Pay TV, ESPN’s primary distribution platform, is the future of video distribution or the best platform for our content.” He cited subscriber figures for ESPN that are lower than any previously reported — 53.6 million homes as of December — and said MLB did not think it beneficial “to accept a smaller deal to remain on a shrinking platform.”
Manfred’s broadside against cable is far from breaking new ground — it is likely that officials at all of the major leagues and conferences have said something similar privately — but it is worth noting that MLB still has significant ties to cable by way of its deal with Warner Bros. Discovery.
Finally, Manfred chided ESPN for its lack of non-game Major League Baseball coverage. ESPN canceled its daily editions of “Baseball Tonight” in 2017 and largely avoids discussing the sport on its studio shows.
According to Manfred, MLB has had conversations with potential bidders for the rights currently held by ESPN and expects “to have at least two potential options for consideration over the next few weeks.” He specifically mentioned moving forward with “a new broadcast and/or streaming platform,” which would seem to rule out cable.
