SBJ/September 3-9, 2012/Media

Bidders angle for more MLB

News that Major League Baseball had reached a nearly $6 billion media deal with ESPN had not yet gone public when the league was again embroiled in round-the-clock negotiations for its next media package.

Last Monday, Fox Sports’ top executives — co-presidents Randy Freer and Eric Shanks and executive vice president Larry Jones — were in the midst of wall-to-wall meetings in New York City to try to retain a package with the league, with whom it has had a relationship since 1996.

Fox acted aggressively and told MLB that it wanted to maintain its current deal, which includes the World Series, one league championship series and the All-Star Game.

But there was a new element: MLB had told networks that it was considering merging the existing Fox and Turner packages. So, Fox’s new offer included Turner’s MLB package, which includes the rest of the playoffs. Instead of putting those games on Fox’s broadcast channel, it said it wanted to place those games on its planned all-sports channel, which it is calling Fox Sports 1, sources said.


MLB executives were intrigued. They listened as Fox Sports executives told MLB officials that they would switch Speed from a motorsports channel to an all-sports channel. But to do that, Fox needs programming, like MLB.

So Fox’s bid would be a mix. It would place the World Series and most of the league championship games on its broadcast network. The earlier playoff rounds and most regular-season games, including some Saturday “Game of the Week” telecasts, would be on the cable channel.

Sources close to the discussions said Fox’s initial offer last week was not high enough. The company was following ESPN, which set the market when it agreed to double the price of its package. That means that Fox would have to approach an average of $800 million a year for two available packages. Fox now pays $257.1 million for its package, while Turner pays $148.6 million for its package.

Fox executives flew back to Los Angeles without a deal late last week. It was unclear whether Fox would be able to reach a deal.

But one thing is certain: It is not the sole bidder.

Multiple sources said Turner Sports’ top executives were in close contact with MLB last week to try to not only maintain its package but possibly pick up Fox’s.

Turner executives discussed a structure that looks a lot like its March Madness partnership with CBS. Turner has told MLB that it would put baseball’s biggest events, like the All-Star Game, the World Series and some league championship series games, on CBS. The remaining programming would go to TBS. This would return CBS to covering baseball for the first time since 1993. Over the past couple of months CBS Sports executives have reached out to MLB about their interest in the package and desire to carry the World Series and All-Star Game on their broadcast network.

Both plans would combine the current Fox and Turner packages into one package.

As of late last week, MLB had some decisions to make. It had to decide whether it wanted to combine Fox’s and Turner’s existing packages into one, or keep them separate.

And it had to figure out what kind of package it would give to its own cable channel, MLB Network.

As of late last week, NBC Sports still was in the picture and potentially could bid on both packages, which it would place on NBC and NBC Sports Network. Last week, an NBC insider described the mood inside the network’s Manhattan offices as that of an underdog in the bidding process. NBC Sports has not met internally to discuss an MLB offer in at least a week.

Meanwhile, executives at ESPN, which will carry one wild card playoff game as part of the new deal but has no postseason rights now, have told MLB that it is willing to pick up more playoff games if available. MLB already rebuffed an ESPN offer for the MLB playoffs, though, and the network is not expected to be a significant player in these negotiations.
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