ESPN sought a steep discount from Major League Baseball when it opted out of its contract, per the latest reporting.
ESPN was seeking to reduce its annual Major League Baseball rights fee to “no more than $200 million a year,” according to Jared Diamond and Isabella Simonetti of The Wall Street Journal, a figure that would have been barely a third of the network’s current $550 million/year deal.
It was widely expected that ESPN would opt out of its MLB contract in the hopes of renegotiating a lower rights fee, but the magnitude of that reduction was not previously known. According to previous reporting by John Ourand of Puck, ESPN was also willing to “roughly” maintain its current rights fee in the event that MLB awarded more rights.
ESPN opted out largely because of the minuscule rights fees being paid by streamers Apple and Roku for season-long packages of exclusive regular season games. At $200 million/year, ESPN would have still paid more than double the rights fee Apple and Roku owe each season — $95 million combined.
The $200 million/year figure would have put MLB behind any number of ESPN properties. ESPN would have been paying half as much for Major League Baseball as for the NHL ($400 million/year) and about the same as it pays for La Liga, the premier Spanish soccer league ($175 million/year). It would have been the lowest annual rights fee the company paid to MLB since its 1999 deal, which was worth about $133 million/year (a reported $800 million over six years).
ESPN topped out at a $700 million/year rights fee in its 2014 deal with MLB and negotiated a lower rate in its 2021 renewal.
MLB commissioner Rob Manfred said in a memo to owners last month that the league is shopping the ESPN package — which consists of exclusive Sunday night games, Opening Day, the Home Run Derby and complete Wild Card Series — to broadcast or streaming companies. Per Ourand of Puck, MLB has had early discussions with Netflix, Amazon and Comcast, though those discussions have not focused specifically on replacing ESPN.
It is not clear whether MLB will be able to find a partner, or multiple partners, who could make up all or most of the current ESPN rights fee. The $200 million bar may be easier to clear, but still leave MLB short by hundreds of millions. Whatever the eventual price tag, any reduced fee runs the risk of further driving down the price MLB is able to seek on the open market when all of its packages are up for bid in 2028.
