Much of the focus on the end of the ESPN-MLB relationship is likely to fall on the exposure and familiarity associated with the preeminent sports media brand, but MLB benefited little from the ESPN hype machine. The ESPN exposure MLB once enjoyed — “Baseball Tonight” every night, a full two-hour “SportsCenter” special when Sammy Sosa corked his bat — long-ago dissipated.
In leaving ESPN, one runs the risk of the most-watched sports network completely ignoring one’s existence — a problem the NHL faced for years — but MLB in large measure has already suffered that fate. Outside of live games, as commissioner Rob Manfred noted in his memo to owners Thursday, there really is no MLB presence on the “Worldwide Leader in Sports.”
ESPN is in many ways replaceable. Its audience of 1.51 million per year last season could easily be surpassed by a broadcast network, and perhaps even approached by a sufficiently mainstream streamer. The network has no iconic baseball shows like TNT’s Inside the NBA — Baseball Tonight might have filled that description in the old days, when Peter Gammons was a more regular sight on ESPN than Stephen A. Smith — and few if any prominent baseball voices inextricably linked to the sport like Charles Barkley. It is possible, even perhaps likely, that most baseball fans will not notice ESPN’s absence after this season.
Yet it would not be accurate to say that MLB has nothing to lose in parting ways with ESPN. In fact, the end of the relationship is an indication of that which MLB has already lost through an inability to sufficiently value its national broadcast rights.
To begin with, start with $550 million/year. That figure is ESPN’s annual rights fee, and it is actually a reduction from the network’s previous $700 million/year deal. The difference between ESPN’s previous deal and its 2021 renewal was game inventory. ESPN gave up its Monday and Wednesday night regular season windows, and MLB sold those rights to a pair of a streamers — a seven-year deal with Apple for Friday night games worth $85 million/year, and two-year deal with Comcast’s Peacock for $30 million/year. After Comcast exited its contract ahead of last season, Roku acquired the Sunday morning package for $10 million/year. Add those packages up and one has about $100 million, which makes up most of the difference between the two ESPN deals.
In essence, MLB broke even with $700 million/year combined for the same package of rights.
Yet the rights sold to Apple and Peacock/Roku are not analogous to those given up by ESPN. Specifically, Apple and Roku have exclusivity for their games, putting their windows on the level of Sunday Night Baseball and the FOX “Game of the Week.” ESPN’s Monday and Wednesday night games lacked exclusivity, one of the reasons why the network had no problem dropping months of live game inventory in the dead zone of summer. In acquiring exclusive game windows for eight figures, the streamers obtained coveted rights for a fraction of what the linear partners were paying.
To be sure, as Manfred noted in his Thursday memo, neither Apple nor Roku have a package that fully compares to the suite of rights owned by ESPN, WBD and Fox. ESPN has a fully exclusive window on Sunday nights, plus the Home Run Derby, Opening Day and Wild Card playoffs. Fox has its exclusive “Game of the Week,” the World Series, All-Star Game and half of the LDS and LCS. TBS has the other half of the LDS and LCS to go along with its non-exclusive regular season games.
One might be able to argue that Apple’s package of Friday night doubleheaders is worth only one-sixth of the $550 million ESPN is paying in its expiring deal. Yet it defies logic to suggest that Roku’s weekly slate of exclusive windows is worth only one-55th of that total.
Whether MLB undervalued its rights in its deals with Apple and Roku or inflated them in its deals with ESPN, WBD and Fox, there is a gulf between the linear and streaming packages that was impossible not to notice. It is hard to blame ESPN, which even after reducing its rights fee is still paying MLB more than any other partner outside of Fox, for seeking its own bargain.
It is entirely possible that MLB, in striking such paltry deals — the Sunday morning package sold for so little that Juan Soto could acquire it himself — devalued its rights in a way that will be difficult to immediately overcome. When the NHL had to resort to a revenue-sharing deal with NBC at its mid-2000s nadir, it set a bar so low that a $200 million/year deal from NBC in 2012 seemed like a milestone for the league. Instead, it quickly became an obvious underpay, and set a low bar for the next deal, the current $625 million/year that ESPN and Warner Bros. Discovery are currently paying — which itself is a bargain.
Perhaps MLB will find a partner willing to pay more than ESPN was offering, but will it find one willing to pay $550 million/year? Will it have to split the rights among multiple partners in order to reach that figure? Will it have to sweeten the deal with additional inventory? These are questions that could have been avoided.
Beyond devaluing its own rights, Manfred further hurt the sport’s cause with his memo to owners Thursday diminishing cable as a platform. Nothing Manfred said is necessarily inaccurate, just unwise.
Cable remains an important part of the television ecosystem, including that of Major League Baseball — which still has important playoff games on FS1 and TBS through the 2028 season. If not unscathed, sports viewership has remained remarkably resilient amidst the broad decline in cable subscribers. Perhaps most importantly, sports programming is far more important to cable networks than to streamers, who even up to now are still generally paying less per year for rights than their linear counterparts.
Manfred specified that MLB is looking for a broadcast and/or streaming partner to replace ESPN, and given his comments in that memo, it does not seem likely the omission of cable was unintentional. Comcast makes perhaps the most sense, and given it is spending $2.5 billion on NBA rights starting next season, $550 million for MLB would be a small price to pay. Peacock could get exclusive Sunday night games in April, May and September, with NBC simulcasting games from June-August in between its Sunday night NBA and NFL packages. Yet it was just two years ago that Comcast was not willing to renew its Sunday morning package for just $30 million/year. Given that, $550 million seems unlikely.
One can discount Paramount as a bidder, given the uncertainty surrounding the company, and it is highly unlikely that Fox is in a position to add $550 million to its existing $700 million rights deal. Given the price set by Apple, MLB might have a hard time getting the likes of Amazon to pay several times more than a direct competitor.
Looking beyond the obvious contenders, the broadcast “netlets” are both hungry for sports programming and legitimacy, and as such may be more willing to pay to get their foot in the “Big Four” door. Nexstar’s CW just attracted 1.8 million for last weekend’s NASCAR Xfinity Series season opener, the first race of its new $115 million/year rights deal and the largest audience for the series in three years. Scripps had success with Friday night WNBA last year and is expected, along with CBS, to renew for upwards of $100 million/year.
Ultimately, leagues tend to get the kind of money they are looking for, and one imagines Manfred would not be so bold if he did not have a suitable replacement for ESPN waiting in the wings. Yet given how baseball has handled its national rights negotiations so far, one cannot completely rule out the possibility that the league has simply botched the negotiations.
