Negotiations for the next big sports media deal will begin in earnest this week as Major League Baseball officially takes its national TV rights to the open market.
League executives have been negotiating with network partners ESPN, Fox Sports and Turner for the past several months. But those exclusive negotiating windows have ended without deals. The final window, with ESPN, ends in the middle of this week, sources said, allowing MLB to start negotiations with other networks, like NBC Universal, which has made no secret of its desire to pick up a package of rights for its NBC Sports Network cable channel. NBC has not held MLB rights since 2000 and is eager to bid on them this summer, sources said.
“We think it’s a great property, and given the opportunity, we’d welcome the discussion,” said Greg Hughes, NBC Sports Group senior vice president of communications.
MLB’s current set of national media deals, signed in July 2006, end after next season. But several sources expect new deals to be finalized as soon as this summer. Currently, ESPN pays an average of $306 million per year for its package that includes “Sunday Night Baseball;” Fox pays an average of $257.1 million per year for its package led by the All-Star Game and World Series; and Turner pays an average of $148.6 million per year, with its rights fronted by the Division Series, half of the League Championship Series, and most recently the two new single-game elimination Wild Card playoff games.
The fact that the exclusive negotiating windows are ending without deals does not offer any specific clues about which network will ultimately cut deals with MLB. It simply allows new networks, such as NBC Universal, to enter into the bidding process, potentially driving up the price.
Sources said MLB has told its network partners that it wants to take its rights to an auction as a way to make more money from its rights. With labor peace guaranteed through at least 2016, on-field competitive balance historically strong, and a surging market for sports media rights at large, MLB stands in a particularly advantageous position to re-enter the market.
In their initial discussions with the league, Fox and ESPN have expressed interest in expanding their deals. Currently, Fox owns MLB’s broadcast package. But sources say Fox is interested in picking up cable packages. Fox executives have looked into turning its motor racing channel Speed into an all-sports network that could house those games. It also could decide to place a package on FX, which is scheduling more sports.
Also at issue for Fox is harmonizing baseball’s October playoffs, with its heavy slate of weeknight games, with the network’s successful prime-time entertainment programming. The network this past TV season finished first overall among the four major U.S. broadcast networks in viewers age 18-34 and 18-49, with Fox winning the latter, key demo for an industry record eighth consecutive season.
ESPN’s current deal gives it access to an extensive regular-season schedule, but no playoffs. Sources say the network is interested in adding some playoff games to the schedule. It also is interested in extensive highlight rights. Turner, meanwhile, is interested in maintaining, if not expanding, its current set of rights, sources said.
MLB Network holds non-exclusive regular-season rights and rights to two Division Series games. It’s not known if the league wants to increase that game package, but MLB Network remains an option for the league.
The wild card is NBC, which has been looking at sports properties to help bolster its NBC Sports Network. Some sources have pointed to potential conflicts over any NBC bid that includes World Series rights, given the network’s “Sunday Night Football” contract extends through 2022. Sunday night is a particularly big night for prime-time television, and MLB is unlikely to cede the time slot to a rival league.
Over the past 18 months, NBC has been at the table for almost every sports rights auction. It spent $4.3 billion for rights to the 2014 through 2020 Olympic Games and $187 million for rights to the NHL for 10 years. It lost Wimbledon rights to ESPN and wasn’t able to wrest Pac-12 rights away from Fox and ESPN.
Also at issue is what, if any, digital rights will ultimately be included in the package. MLB traditionally has negotiated digital rights separately from its TV rights, and since its current national TV deals were struck in 2006, MLB Advanced Media has grown into an industry juggernaut. But all of the TV networks have stated their desire to have every new deal with a major sports property include a passel of digital rights.
CBS declined comment and is not expected to be a serious bidder for the rights. MLB executives also declined to comment.