When I ran a story on Baseball Prospectus in July saying that MLB’s national television contracts could be renewed ahead of their end of 2013 expiration, I assumed we’d be looking the off-season, or possibly early into the 2013 MLB season before it would happen. But, last week, ESPN became the first to jump into the fray by announcing that they had reached a new 8-year, $5.6 billion deal. All told, it meant that MLB would see $700 million annually as opposed to the $306 million they had prior.
It is the largest deal ever for Major League Baseball and set the bar going forward with the league’s other two broadcast partners, FOX and TBS.
So, when will those extension be announced? Soon, according to John Ourand of the SportsBusiness Journal. According to the SBJ, FOX co-presidents Randy Freer and Eric Shanks and executive vice president Larry Jones have been meeting extensively with MLB to retain MLB programming. There has been considerable speculation that with NBC Sports Network now in the mix, they would be vying to fill programming with a major sports league, and with MLB up for renewal, it seems a perfect fit.
According to the SBJ report, the FOX execs are looking to “switch Speed from a motorsports channel to an all-sports channel” but to do that they need sports programming to fill the hole, and MLB fits that bill. As further reported:
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.
The story gets more interesting in that MLB is also talking with TBS and that the deal would be similar in that the plans would role the current FOX and TBS offerings into one package. The aforementioned NBC Sports is still in the mix, and would do look to do the same: roll the FOX and TBS games into one package.
On the edges is MLB Network which is continuing to branch its live programming out, and how postseason play will be covered. As part of the new deal, ESPN gets back into broadcasting postseason play with one of the Wild Card playoff games. Reportedly, ESPN asked for more playoff games, but MLB declined at the moment.
What is known is this…
While I projected as much as a 175% increase in television revenues in the new deals, that is likely too high. If the SBJ story holds water and a combined deal to cover the FOX and TBS programming hits $800 million annually, MLB will see total national television revenues of $1.5 billion annually, up 111% from the $711.7 million they receive now.
How will this affect the individual clubs?
With MLB’s national media rights revenues part of the league’s central funds that are distributed evenly to all 30 clubs, each one will could see $50 million annually, up from $23.72 million, now. That could give each club the ability to be competitive for a star-caliber free agent, and then some.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network (select his name in the dropdown provided).
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