Latest TV Deal Fallout: The $300M Standoff That Broke ESPN’s MLB Agreement

It looks like ESPN and Major League Baseball are not on the same page! Surprisingly, ESPN has put forward a very low valuation on Major League Baseball, leading to a $300 million cut from the $550 million annual rights payment. So, it seems that the MLB agreements with ESPN will finally conclude after 35 years of partnership. Guess the reason?

Well, ESPN was found to decrease baseball coverage, and there were disagreements over the annual rights fee too, which led to the fallout. However, Major League Baseball is looking for additional broadcasting options, so it does not appear that things are going in the wrong direction. Think that will work for them?

Maybe, given that ESPN reportedly wanted to reduce the payment by $350 million to continue broadcasting the MLB games. From a hefty $550 million to just $200 million, that surely does not make an ideal deal and is also the reason behind the network’s exit during the final three years of the contract. The rights to broadcast the Home Derby, the Wild Card games and Sunday Night Baseball are currently owned by ESPN. But that’s not all!

The baseball industry has been grappling with a lot of issues and fallout due to the changing preferences and behaviors of customers and the change in the technology landscape. Similarly, when the ESPN chairman had a discussion with Rob Manfred, the MLB commissioner, he shared his discontent about the declining value of television rights. So now that ESPN has been looking for a new deal with a lower valuation, Manfred denied any possibility of going with less money.

So, will the MLB go with other options in the market?

MLB is having discussions with other streaming platforms

With ESPN’s exit using the opt-out clause, the pay remains a major point of discussion, as MLB had options like Friday Night Baseball on Apple TV for $85 million and MLB Sunday Leadoff for $10 million. However, they are still on the hunt to replace ESPN with streaming giants for broadcasting the games. So, the streaming platforms MLB had talks with include Amazon, Netflix, NBC Universal, and more. While the MLB could go with the options, as they are cheaper when compared to ESPN, the main problem is something else. 

Well, the baseball games broadcast on ESPN are fully exclusive and can be viewed in great quality, which isn’t the case for other platforms like Apple TV and Roku. Meanwhile, ESPN has been getting less, as Warner Bros. and Fox even received much better playoff inventory, that too, at a similar price. So, is there any chance that MLB and ESPN may have further discussions and come to an agreement? Well, on paper, that looks not possible, given the disagreement between the two parties.

As MLB has reduced their value by signing with Apple and Roku, they even asked for more inventory on ESPN, for example, the comeback of games in the middle of the week. But that seems quite far-fetched given that the league is primarily focused on getting more money, which ESPN has clearly denied. Although there’s no confirmation at the moment regarding ESPN and MLB joining hands together again, it is yet to be seen whether MLB’s new broadcasting partner could offer them the desired amount or not.

What’s your opinion on this? Let us know your thoughts in the comment below.