MLB reportedly expecting reduced TV rights fees from upcoming ESPN deal

The general trend when it comes to pro sports broadcasting rights is that the next deal is almost always bigger than the one you have now. However, thanks to ongoing audience trends that existed long before the COVID-19 pandemic, coupled with the impact of the last year, it’s expected that Major League Baseball is looking at a reduction on their upcoming deal negotiation with ESPN, per The Athletic’s Ken Rosenthal.

The previous deal between MLB and ESPN was for $5.6 million over eight years, coming out to around $700 million per year. The new agreement, according to Rosenthal’s sources, would be for $3.85 billion over seven years, which would come out to around $550 million per year. The drop in overall value is coupled with a reduction in the number of games that ESPN will carry exclusively, which will be cut by more than a half. The league may reportedly try to sell those games to traditional linear and digital media companies, though no one has bitten yet.

In a changing television landscape, MLB is bracing for a reduced rights fee in its pending deal with ESPN. Story: https://t.co/XDkLpP773c

— Ken Rosenthal (@Ken_Rosenthal) January 8, 2021

ESPN will keep its Sunday Night Baseball inventory and will also hold onto the rights for the Home Run Derby. They’ll also continue to have rights to a yet-to-be-determined number of playoff games, which the NY Post reported in December.

SBJ’s John Ourand had reported that ESPN’s interest in mid-week games has been dropping in recent years as ratings have suffered. ESPN also does not have exclusivity in mid-week games, unlike how it does on Sunday nights.

It’s not all bad news for MLB as the loss in revenue from ESPN is offset by recently renewed deals with Fox Sports and Turner Sports, both of which trend positively for the league.  The Fox deal was up $525 million from the previous one while the Turner deal jumped up by $325 million. It’s worth noting that those deals involve more exclusive and major events, such as the All-Star Game, League Championship Series, and World Series.

Ultimately, the changes to the ESPN deal could end up working well for MLB in the end. Certainly, there’s a lack of national exposure that comes with fewer games on ESPN, but a focus on RSN partners and MLB.tv out-of-market packages could benefit from the changes, helping to drive up revenues for individual clubs. There’s also some potential for deals with new partners like social media platforms and online networks.

[Ken Rosenthal, The Athletic]