ESPN says it will end MLB broadcasts after striking out on deal
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ESPN’s coverage of Major League Baseball is headed to the bottom of the ninth.
The Walt Disney Co.-owned sports broadcasting giant and MLB on Thursday night separately announced an end to their long association after this year. The network and league had been in discussions to restructure the TV rights deal, but those talks collapsed this week.
ESPN asked MLB to accept a lower license fee because the broadcaster has been losing money on the $550-million-a-year deal. After talks broke down, ESPN triggered its opt-out clause to terminate the contract, which was due to expire in 2028.
The network said it would broadcast the 2025 season, as planned, then end its run after 36 seasons of Sunday night games. ESPN’s arrangement includes some spring training games, the Home Run Derby in July and the first round of the playoffs in October. The season begins next month.
MLB blasted ESPN’s attempt to reduce the license fee and said it would find a new TV or streaming partner.
“Given that MLB provides strong viewership, valuable demographics, and the exclusive right to cover unique events like the Home Run Derby, ESPN’s demand to reduce rights fees is simply unacceptable,” the league said Thursday night in a statement.
Ratings for Sunday night games were up 6% last year, compared with 2023, according to MLB.
Long known as the ‘Worldwide Leader in Sports,’ ESPN is grappling with cord-cutting, rising rights fees and skepticism from Wall Street.
The shift comes as networks absorb high costs of major sports rights at a time when cable channels such as ESPN are losing subscribers. Cord-cutting has led to a substantial decline in distribution fees that cable and satellite TV operators pay Disney to carry its channels.
Disney’s sports rights costs have also ballooned in recent years, particularly after the network agreed to cough up billions more to keep the NBA, including the championship finals, and the NFL.
“In making this decision [to drop baseball], we applied the same discipline and fiscal responsibility that has built ESPN’s industry-leading live events portfolio as we continue to grow our audience across linear, digital and social platforms,” ESPN said.
Baseball also faces cord-cutting challenges because most of its games run on regional sports networks, including many that are on life support.
The sports media unit remains profitable and part of Disney. But expect the company to keep a close eye on its financial performance.
More than a decade ago, the linear ESPN channel was available in 100 million U.S. homes. Now, only about 54 million homes have ESPN, according to a memo that MLB Commissioner Rob Manfred sent to club owners this week.
“We do not believe that Pay TV, ESPN’s primary distribution platform, is the future of video distribution or the best platform for our content,” Manfred wrote in the memo. “Furthermore, we have not been pleased with the minimal coverage that MLB has received on ESPN’s platforms over the past several years outside of the actual live game coverage.”
ESPN had been scaling back its baseball coverage. From 2014 through 2021, the sports network televised up to 90 regular-season baseball games. But ESPN had agreed to cover just 30 regular-season games when the two sides renewed the license deal four years ago.
Competitor Fox has more valuable rights, which include late-round playoff games and the World Series. The Fox package costs an average $730 million a year, according to MoffettNathanson, a research firm. Warner Bros. Discovery has a smaller package for TBS, worth about $470 million a year, for some regular-season and playoff games. Both deals run through 2028.
“The MLB has struggled with fractured sports rights that undermine its negotiating leverage with national broadcasters,” MoffettNathanson analyst Robert Fishman wrote in a Friday report.
For Disney, a key source of friction was the league’s willingness to cut substantially lower-priced deals with streaming services.
Three years ago, Apple nabbed rights for Friday night baseball, agreeing to pay MLB about $85 million a year. Roku picked up some Sunday afternoon games worth about $10 million a year, according to ESPN.
ESPN wanted a similar discount. However, in the memo, Manfred disputed the Apple or Roku packages were comparable to ESPN’s exclusive games.
No one in Dodger blue was apologizing Wednesday, when the Dodgers introduced pitcher Roki Sasaki at a news conference.
ESPN said it would like to find ways to run some regional baseball games. The Burbank entertainment conglomerate is gearing up to launch its stand-alone ESPN streaming service later this year and would like additional content.
“We remain open to exploring new ways to serve MLB fans across our platforms beyond 2025,” ESPN said.
The national “Sunday Night Baseball” broadcast has been a fixture on the network’s schedule since 1990 — before Disney owned ESPN.
Coverage begins on March 27 with a New York Yankees and Milwaukee Brewers game, followed by the World Series champion Dodgers taking on the Detroit Tigers.
In his memo, Manfred wrote the league had been in conversation “with several interested parties” in recent months to take over the Sunday games and would present “at least two potential options” to club owners in the coming weeks.
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