SBD/August 29, 2012/Media

Additional MLB Rights For ESPN Could Have Impact On Regional Sports Nets

Skipper said the agreement allows ESPN to help create a national audience for baseball
ESPN yesterday formally announced an eight-year, $5.6B deal to extend its MLB rights through ’21. The deal, which goes into effect in ’14, includes TV, digital, int'l and radio rights. ESPN President John Skipper said, “We did one deal across everything, which was our preference.” The net will retain its rights to "Sunday Night Baseball," and will be able to increase the maximum number of team appearances in that window from five to six per season. ESPN also will maintain its Monday and Wednesday night games, per the deal, an increased number of ESPN telecasts will "co-exist" with local telecasts, virtually eliminating blackouts in clubs' home markets. Each of MLB's 30 teams will be featured at least once per season in a live telecast. Skipper said, “We’ve made a commitment to show every team.” He added, "We want to continue for the game to have a national presence for all teams and build the national audience and this agreement allows us to do that." In addition, ESPN will get the rights to one Wild Card playoff game annually, six holiday games across Memorial Day, July 4 and Labor Day, and increased footage and highlights rights for all platforms as well as the ability to show in-progress highlights. MLB Commissioner Bud Selig said, “This is really a very historic day for MLB in many ways, and a very happy one. We look forward to many more years now of partnership with ESPN. This deal underscores how popular the sport is today” (Jillian Fay, THE DAILY).

ROOM FOR MORE? In N.Y., Richard Sandomir notes the deal "could irk the local TV outlets -- primarily regional sports networks -- that carry the teams’ games," because the RSNs "could lose one game to ESPN’s Sunday night showcase." Also, the net's "new right to choose a team for a combined fourth appearance on Monday and Wednesday nights means local stations carrying the game will not have an exclusive in the team’s markets and must share the audience with ESPN." Sandomir also notes MLB is "still talking with Fox, a TBS-CBS alliance and the NBC Sports Group about other deals." Fox and TBS "are eager to keep what they have." Fox is "using the promise of starting an all-sports cable network to keep or even expand its regular-season and postseason rights." CBS would "most likely want only the All-Star Game and World Series if it and TBS were successful in supplanting Fox." Meanwhile, NBC is "looking to return to baseball, its former domain, in part to add compelling live events to its evolving cable channel, the NBC Sports Network" (N.Y. TIMES, 8/29).

SUPPLY AND DEMAND: USA TODAY's Michael Hiestand writes MLB's "timing, whether or not it's an accident, is impeccable." It is the "last major sport/event not already locked into long-term TV deals." Selig said MLB was in a "golden age." Hiestand: "Maybe. But even if the sport was in a funk, it still faces a prospect any seller would relish: Demand outstripping supply." The number of outlets "wanting to get TV rights, including its MLB Network, outstrips the number of MLB TV packages." Selig was asked if MLB might increase the number of TV packages to let everybody in and said, "Overall, it will be essentially the same thing, with some minor changes as there were (with ESPN)" (USA TODAY, 8/29).

MONEY BALL: The WALL STREET JOURNAL's Matthew Futterman notes the deal is "the latest in a string of high-priced media contracts in which sports organizations have increased the guaranteed revenues they will receive from their television partners by 60% to 100%." Industry experts said that the value of sports rights "is continuing to grow because they can reliably draw the young male demographic advertisers crave." Also, because sports fans "value live programming, the sector has remained largely immune from a media world that grows more reliant on digital recording devices and online video services that allow viewers to watch their favorite shows when they want to and skip commercials" (WALL STREET JOURNAL, 8/29). In N.Y., Claire Atkinson notes the new deal "will surely result in more accusations of a 'sports tax,' as Liberty Media boss Greg Maffei called it, since costs must be passed along and all consumers pay whether they watch or not." A source said, "It’s another example of sports rights getting too high to support" (N.Y. POST, 8/29).
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