SBJ/September 3-9, 2012/Media

Olympian effort: ESPN talks moved quickly

On Saturday, Aug. 4, most of the sports world’s eyes were focused on London, where the Olympics were setting U.S. television viewership records for NBC. That was also the day that Major League Baseball started negotiating in earnest to extend its media rights deal with one of NBC Sports’ biggest competitors, ESPN.

Tim Brosnan, MLB’s executive vice president of business, called ESPN President John Skipper and told him that the league was prepared to counter an offer the network had made months earlier, when the two were in the middle of an exclusive negotiating window.

MLB executives had expected NBC to be an aggressive bidder for ESPN’s package. But MLB Commissioner Bud Selig approved a plan that essentially set up a new and informal negotiating window for ESPN. If the league could agree to a deal with ESPN by the end of the week, which also marked the end of NBC’s Summer Olympics coverage, it would.

If it couldn’t, all bets were off.

Brosnan and Skipper agreed to meet on Tuesday, Aug. 7, at MLB’s Park Avenue offices. Chris Tully, MLB’s senior vice president of broadcasting; Norby Williamson, ESPN’s executive vice president of programming; Julie Sobieski, ESPN’s vice president of programming and acquisitions; and John Papa, ESPN’s vice president of programming and acquisitions, were part of the negotiating teams that day.

Brosnan outlined MLB’s counteroffer.

ESPN has long been frustrated by MLB’s dealmaking process. ESPN has four deals with MLB: one for TV, one for digital, one for international and one for radio. Each was negotiated separately.

ESPN also wanted more programming and more digital rights than it had previously.

MLB agreed to most of ESPN’s requests. It wrapped the network’s four existing MLB deals into one. And it decided to make more programming available on TV and digitally.

In return, MLB wanted to double the amount of money — from an average of around $350 million a year to $700 million a year. And, other than one wild card game, the package would not include any playoffs.

MLB knew ESPN wouldn’t be happy about the playoffs. In the preceding weeks, Disney’s Bob Iger personally called Selig to emphasize how much ESPN wanted to get back into the MLB playoffs. But ESPN felt MLB’s counter was close enough to begin round-the-clock negotiations.

In two days, the TV portion was virtually done. ESPN would keep “Sunday Night Baseball,” and get rid of most blackouts attached to Monday and Wednesday games. As important, ESPN gained the rights to more highlights and the ability to allow “SportsCenter” to do live look-ins.

On Friday, Skipper traveled to North Carolina and Brosnan went to spend the weekend with his family on Long Island. They stayed in close communication by phone and email and kept their bosses in the loop. Selig and Atlanta Braves Chairman Terry McGuirk were actively engaged in the negotiations. Skipper kept in regular contact with Iger and ESPN Executive Chairman George Bodenheimer.

Back in New York, on Friday, Aug. 10, and Saturday, Aug. 11, MLBAM’s Bob Bowman and John Kosner, ESPN’s executive vice president of digital and print media, were left to hammer out the digital aspects of the deal. Last year, ESPN and MLBAM had worked out their own digital rights deal, so many of the biggest issues about what digital content ESPN had the rights to stream already had been worked out.

By Sunday, just before NBC broadcast the Games’ closing ceremony, the deal was completed. A week later, the two sides formally announced it.

Both Skipper and Brosnan said the negotiations went as smoothly as they could have expected. “Tim Brosnan was a standup guy here,” Skipper said. “We do not get this deal done without Tim’s attention to it, his hard work.”

For his part, Brosnan deflected most of the praise to Selig, who was intimately involved in the negotiations. “This was a flat-out team effort with the commissioner and the league,” Brosnan said. “This is the most involved that the commissioner has been on a media deal since we’ve been doing them.”

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