ESPN announced its new rights deal with MLB last week, completing MLB’s full slate of renewals with the Worldwide Leader, Turner, and Fox. In the deal, ESPN is paying an average of $550 million per year (dropping all non-exclusive games in the process), a 20% decrease from their current $700 million per season.
But that rights fee could get even lower if MLB and the MLBPA don’t agree to expanded playoffs in the next collective bargaining agreement. Per the Sports Business Journal, if the playoffs aren’t expanded, the rights fee will fall an additional $100 million to “just” $450 million per season.
That payout could drop even further if the MLBPA fails to agree to an expanded Wild Card round, sources said. If MLB is not able to expand the postseason, ESPN’s payout will drop to $450 million per year. In that case, ESPN would carry one of two Wild Card games and get eight exclusive regular-season games each year.
The league’s plan for expanded playoffs could involve a 14-team scenario with six best-of-three series, with the top teams from each league getting byes. If that’s the case, ESPN would carry the series and its average annual rights fee would climb to $550 million. It is far from certain that the players’ association would agree to such a move.
In the pandemic-shortened 2020 season, MLB temporarily expanded the playoffs to 16 teams, up from ten. ESPN aired all but one of the eight (!) Wild Card series. This season, the Postseason is back down to ten teams, with ESPN and TBS each airing one Wild Card game.
$100 million seems like a lot of money (and well, it is), but MLB is already making a stupid amount of money from its national TV deals. Even if you chalk ESPN down at the lower potential average fee of $450 million per year, Turner is paying a reported average of $470 million per season, and Fox’s deal reportedly pays around $700 million on average per season. Add it all up, and that’s something like $1.6 billion per year from its national TV partners. The difference between $1.6 billion and $1.7 billion is around $3 million per team, or less than the average salary for one player.
All in all, this shows the value of the Postseason to MLB’s TV partners. With expanded playoffs, and somewhere between 11 and 17 extra October games (at least under one of the many possible plans on the table), ESPN would pay an extra $100 million. If the playoffs aren’t expanded, ESPN would get eight more exclusive regular season games and just the one Wild Card game. That’s one hell of a premium for the playoffs, but this shouldn’t surprise anyone.
