ESPN Doubles Down on Baseball With $5.6 Billion Pact

11:49 AM PST 08/28/2012 by Alex Ben Block
Christian Petersen/Getty Images

The Disney-owned sports network agrees to an eight-year extension, but baseball still has other deals to do that could involve Fox, Turner Broadcasting, NBC and even CBS.

Major League Baseball has made a $5.6 billion deal with ESPN, which gives it a home run in its first at-bat in negotiations to renew its contracts for the national broadcasts of its games during the regular season and postseason.

In an announcement Tuesday, MLB referred to a “record-setting increase in rights fees.”

“This deal sets a new standard for Major League Baseball broadcasting as ESPN’s annual rights fee will increase by 100 percent over its current deals,” says the announcement, “marking an all-time record for an MLB broadcasting deal.”

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ESPN president John Skipper and MLB commissioner Bud Selig announced the deal, which will pay MLB $700 million a season -- double what the network had been forking over under its existing contract, which expires after the 2013 season.

Disney-owned ESPN will have rights to 90 regular-season games a year from the start of 2014 through the 2021 season. It will continue to telecast three games each week, on Monday, Wednesday and Sunday nights.

ESPN also gets to televise one of the two new wild card playoff games each year beginning in 2014 and will have the rights to any tiebreaker games at the end of the regular season. It has made a commitment to showcase each of the 30 teams at least once a season.

ESPN will continue to have exclusive TV rights to certain All-Star events including the Home Run Derby and the All-Star legends and celebrity softball games.

It also will have the right to air up to 10 spring training games, cover Opening Day, national holiday games (Memorial Day, Labor Day, Fourth of July) and an exclusive opening-night telecast. ESPN also will air six one-hour specials created by MLB Productions each year.  

The deal with ESPN showcases how baseball rights have expanded. Not only will the network return to the postseason with wild card games, it also will have rights for radio, digital and some international (though baseball is not strong outside the U.S., with some exceptions). For the first time, baseball will be available on ESPN 3 and for those who use the ESPN app on mobile devices and computers.

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Said Selig: “The level of ESPN’s commitment to baseball, both financially and through its expanded content, is a testament to the strength of our game and its unprecedented popularity among our fans. Through its various networks and other media platforms, ESPN offers baseball fans more avenues to experience the game than ever before, and we’re thankful for their continued support.”

Skipper called baseball “a great property,” adding, “The enormous scope of what we acquired will provide fans with more live baseball and more ways to access baseball content than ever before.”

While baseball ratings have been more like a single or double than a home run in recent years, the competition for live sports has heated up, and ESPN has moved pre-emptively to carve out its piece of the action for the next eight years.

Sports have emerged as a key element of broadcast and cable programming as the number of channels has grown amid the era of the DVR. While a scripted show is fine to watch after it initially airs, sports remains one of the few things people want to watch as it happens -- and that is important to advertisers.

With current MLB national rightsholders Fox and Turner Broadcasting -- whose deals expire after the 2013 season -- already in talks about doing new long-term deals, the wild card could be NBC, which under Comcast has made a commitment to get back into sports in a big way. In January, it rebranded Versus as the NBC Sports Network and now is seeking more programming. Baseball is a perfect fit in that there are many more games in the season than football, basketball or hockey. It also fills the summer months when there is not as much regular sports programming.

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NBC could end up with a package for the cable channel. If it is willing to pay enough, it could even challenge Fox and Turner for a national package, and that might include games on the broadcast network as well.

However, NBC dominates Sunday nights in the fall with its NFL game and might not want to disrupt its ratings by taking on the World Series, which could create a scheduling conflict.

Ratings for the thrilling 2011 World Series on Fox were up about 19 percent from the prior year. The ESPN deal is a signal the MLB will get a lot more than the 10 percent increases some analysts had predicted.

CBS at one point was also said to be interested in a baseball package as well. It is unclear whether it remains interested.

Outside of confirming that talks are going on with Fox and Turner, MLB declined comment.

The high price being paid by ESPN sets a tone that will impact the other negotiations. In part, it reflects the rising cost of sports that was demonstrated in NFL license renewals late last year that resulted in a 73 percent increase paid by ESPN for Monday Night Football, the Pro Bowl, the NFL Draft and other NFL properties.

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