ESPN, MLB Extend Rights Deal to 2021

ESPN has signed a new deal with Major League Baseball that will extend its rights agreement through 2021. The deal features a bevy of enhancements that will more greatly feature “America’s Pastime” on the “World Wide Leader.”

According to various sources, the eight-year deal is worth $5.6 billion (an average of $700 million per year). MLB Commissioner Bud Selig would not confirm a specific number on a teleconference with the media this afternoon but did acknowledge that this deal doubles the value of the previous agreement between the two (which was $356 million per year).

“ESPN’s financial commitment to baseball is extraordinary,” said Selig. “The 100% increase is a manifestation of that, and this long-term agreement, I believe, shows not only the strength of our game but its unprecedented popularity amongst our fans.”

Highlights of the deal include the addition of one of the two annual Wild Card games, 10 additional regular-season games, increased footage and highlights rights across platforms, and increased ability to avoid local blackouts on Monday- and Wednesday-night games.

“We’re very pleased with the deal we’ve been able to do,” said ESPN President John Skipper. “We love the product that we get. We are kind of a unique media beast, and we want games, highlights, and studio and information programming, and [Major League] Baseball has been fantastic with working with us.”

In addition to retaining the rights to Sunday Night Baseball and its Monday- and Wednesday-night games, ESPN will increase MLB studio programming dramatically because the deal grants the network rights to many more hours. That means much more Baseball Tonight and a new, daily baseball studio show.

The new pact will favor some of the league’s most popular teams. ESPN will be able to carry a team six times on Sundays (up from five under the current agreement). Among the 10 additional regular-season games per season, four “Pennant Chase” games in late September will be included, along with up to six games across Memorial Day, Fourth of July, and Labor Day.

Under the new agreement, local-blackout restrictions will be all but gone. ESPN can exercise 12 “coexists” per team on its Monday and Wednesday broadcasts (an increase from seven). Under a ”coexist,” a game in a local market will be available simultaneously on both the regional sports network carrying the game and ESPN. Skipper said the game plan is to spread those coexists out in a way that comes as close as possible to eliminating blackouts all together.

“We want out of the blackout business,” he said. “I feel strongly that it’s not a good moment for ESPN when we promote the games and we have to go to ‘game not available in your area.’ We don’t want to be in that situation.”

Commissioner Selig doesn’t feel that the new blackout plan will hurt the RSNs that broadcast the local-rights packages.

“I think this deal is very fair, given the number of games that we have,” he said. “We certainly don’t want to hurt any local rights, I believe, with this. I think the clubs, on balance, are all going to be remarkably better off.”

Skipper said ESPN will not go to its distributors to ask for an increase in its subscription rate, noting that this agreement is a part of the “increased value proposition” that the company provides them.

On the digital side, all of ESPN’s MLB-related television content — including live games — can be available on WatchESPN. That will mark the first time that live games will be able to be viewed online somewhere other than MLB.TV since its most recent business model was put in place.

“I don’t think it should change [the business model of MLB.TV],” said Bob Bowman, CEO of MLB Advanced Media (BAM). “ESPN is our best partner and our most formidable competitor. We welcome the extension, and we’re just a small piece of it.”

“BAM, in my opinion, has just a remarkable future,” says Selig. “It’s 12½ years old, and its growth has been beyond spectacular. I look forward to the next 12½ years that will not only be just as big but bigger because that’s the way the world is going. As far as I’m concerned, BAM today is spectacular, but I don’t think you will recognize it in another 10 or 12 years; it’s that good.”

Other notables from the agreement are continued under the agreement. Home Run Derby coverage during MLB All-Star Weekend and continued production of the Derby in 3D.

MLB’s standing rights deals with Fox and Turner Sports will also be open for renegotiation this fall. It is likely those deals will balloon in cost as well. NBC is expected to be a major player in the talks, as it looks to pick up much needed programming for the new NBC Sports Network.

The postseason rights, which currently sit with Fox and Turner, are also up for grabs. Skipper acknowledged that ESPN could still be in those discussions as well and that “the commissioner knows my number.”

ESPN and MLB have shared a broadcasting partnership since 1990.

All conditions of this deal take effect in the 2014 season. In addition, rights will expand across ESPN Radio, ESPN International, and ESPN Deportes.

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