ESPN and Turner making their pitch
Major League Baseball has told ESPN and Turner executives that it wants to start negotiating its media rights deals again as soon as this week.
The league held preliminary talks with ESPN and Turner earlier this year. But the sides have not had any substantial negotiations for at least the past six weeks, as executives pressed the pause button on talks as the coronavirus pandemic spread through the United States.
The ESPN and Turner deals end after the 2021 season. Both networks signed an eight-year deal in 2012; ESPN pays an average of $700 million per year, and Turner pays an average of $325 million per year.
In preliminary talks earlier this year, ESPN and Turner made it known that they wanted to renew their packages. MLB, which already extended its deal with Fox in the fall of 2018, was happy to stay with its incumbents if they could agree on revenue increases and figure out which channels will carry added playoff games.
Sources said MLB is only speaking to the incumbents right now and has not formally shopped the rights to other bidders. Even in the midst of a global crisis, television networks still place enormous value on live sports rights. MLB wants to capitalize on that interest while, at the same time, cutting a deal before the NFL’s expected media rights windfall comes later in the year.
MLB provides a volume of well-rated programming during sometimes slow summer months, and network officials are especially bullish on potential changes to the game and its postseason format in the future.
Led by President Jimmy Pitaro and Burke Magnus, executive vice president of programming and scheduling, ESPN is happy with its signature series “Sunday Night Baseball,” and expressed interest in picking up extra wild-card games. ESPN has less interest in MLB’s midweek package of regular-season games, sources said.
As with just about every rights deal ESPN has cut over the past couple of years, it is especially interested in picking up rights for its streaming service, ESPN+. That could include everything from regular-season packages to MLB’s out-of-market package.
Led by WarnerMedia News & Sports Chairman Jeff Zucker and Turner Sports President Lenny Daniels, Turner Sports has told MLB that it wants to maintain its playoff position, where it carries one championship series and half of the division series.
Questions about Turner’s commitment rose soon after Turner Broadcasting President David Levy left the company last spring. Levy was viewed as the champion for the deal that hasn’t seemed to always fit into Turner’s portfolio. Critics have questioned the price Turner pays for what is essentially one month’s worth of programming. But Zucker and Daniels have made it clear to MLB that the network wants to renew because that month — October — is lucrative to TV networks from an ad sales perspective.
Tony Petitti, MLB’s deputy commissioner of business and media, and Atlanta Braves CEO Terry McGuirk are handling negotiations for the league.
Earlier this year, all sides suggested that deals would be finalized in the first half of this year, months before the NFL’s multibillion-dollar rights deals would be signed.
The big prize in these negotiations is the playoff games.
Looking beyond the 2020 season, the postseason expansion plan floated in February, which was initially deemed as radical by some players, entails 14 (up from 10) of MLB’s 30 teams reaching the postseason. The team with the best record in each league would receive a bye in the wild-card round. The most innovative aspect would be a live selection television show similar to how the NCAA Tournament is unveiled, where teams would select their opponents on the last day of the regular season.
MLB has been pleased and encouraged that television partners have shown strong interest in the expanded playoff proposal, though MLB Commissioner Rob Manfred has told Sports Business Journal that specifics of the format remain fluid. The details of the proposal have not been formally discussed or negotiated at all yet with the union.
Among other elements of the proposed expanded postseason format: The division winner with the second-best record in each league would get first pick from among the three wild-card teams with the worst record. Then the division winner with the third-best record would pick. The two remaining wild-card teams would play each other. All series in that round would be best-of-three, with all games hosted by the team with the better record.