The peculiar arrangement between ESPN and Major League Baseball is coming to a head in the run-up to the network’s opt-out date on March 1.
ESPN believes it is over-paying for its package, paying $550 million a year for regular season and Wild Card games plus the Home Run Derby. As a result, it is looking to exercise its right to opt out of the deal early before it would expire in 2028.
As those rumors swirl and teams break for training camp in Arizona and Florida this month, MLB leaked its response to The Athletic, which recently reported that baseball is threatening to leave ESPN for a new partner after this season if the network indeed opts out.
Yet while the two sides wage a public war of words, we’re starting to learn more about what’s really going on. For both baseball and its network partners (though ESPN appears to be the only one with an opt-out), it’s all about that next deal in 2028. With the local TV model that helped buoy smaller-market teams and took advantage of baseball’s “tonnage” and regional popularity all but dead, MLB commissioner Rob Manfred is already talking about selling a package starting in 2028 that would combine every team’s local rights.
A package like that really only works on a streaming app, which could sell tiered subscriptions and customize its interface by market. So ESPN — as well as any other broadcaster that MLB could potentially get in bed with once ESPN opts out — has its eyes on those rights. At the same time, MLB knows it needs to get the absolute biggest check possible in 2028 to make up for the significant losses teams have suffered.
The Athletic’s Andrew Marchand explained the standoff in an appearance on the SI Media podcast this week:
“There’s a larger issue for MLB that’s really kind of hovering over all of this. ESPN would maybe just threaten to opt out and stay in if they got access to the local rights. Meaning that on their new ESPN direct-to-consumer product, which will come out in August, which will mean that you’ll be able to get ESPN without cable or satellite or YouTube or any of those things, just directly get ESPN, if they could have something where it was a surcharge … an add-on where you pay $5, $10 a month extra on top of your ESPN DTC, I think that they would be interested in that. There have been, as far as I’ve been told, no discussions on doing that. And so that’s the play. If Amazon, somehow, I don’t think they’re going to $550 million, but let’s just say they somehow got in there. I think the reasoning would be (to) get in with baseball so then when eventually it’s probably going to go to … some sort of streaming, direct-to-consumer deal.”
None of this is to say ESPN is as good as gone. They could potentially opt out and still negotiate a new deal with MLB, even without local rights. Losing baseball would create a black hole of “major” live sports for the network in July and August. ESPN may not be able to risk any dead spot in the calendar as they ask their customers to pay them directly for the new streaming service.
Still, Marchand reported “real friction” between the two sides as negotiations heat up.
From the baseball side, the league office can’t simply ignore the next two seasons. It will be hard to find a short-term partner from 2026-28, when MLB’s deals with Fox (which airs weekly national games, the NLCS and the World Series) and TNT Sports (which airs weekly national games and the ALCS on TBS) expire. And Marchand does not believe others, even deep-pocketed Amazon — which already has a deal to air weekly New York Yankees games and a new add-on for local Fan Duel Sports Networks — would come close to the $550 million ESPN is paying now for a two-year deal with MLB.
If MLB simply chases the biggest payout for those two years (and perhaps beyond), it also risks losing audience. The league’s “experiments” airing games on Peacock, AppleTV+ and the Roku Channel (who pay far less annually than ESPN) reportedly have not generated significant viewership. And the MLS Season Pass deal with Apple serves as a glaring cautionary tale for what can happen when your sport disappears from the public eye on streaming.
“If I’m baseball, I want to be in business with ESPN. There’s definitely a case that the streamers are coming,” Marchand added. “They say those are experiments, but the problem if I’m baseball and I’m thinking about this and I keep saying I have ‘experiments.’ Well which experiment has worked?”
ESPN, on the other hand, has a built-in audience that is used to tuning in to watch sports. The worldwide leader has also been synonymous with baseball for most of its history. On Opening Day as well as each Sunday night, fans know they can watch baseball on ESPN.
Both sides must know it is in their best interest to continue the relationship, but the stakes are high. ESPN is baseball’s second-biggest partner, and its new app is a potential gateway for Manfred’s grand local TV plans. On the other side, baseball is a consistent draw that may be on the rise once again, filler for the live sports calendar as ESPN fends off competitors and the death of cable.
Still, far more logical deals than this have fallen apart over money. If this is truly all about the future of local baseball consumption, as things currently stand it would appear the race is on for MLB to find a new partner that will come closest to matching the $550 million in revenue it gets from ESPN — and offer a future home for the all-in-one local package it dreams of.
