San Francisco Giants Shortstop Brandon Crawford, 35, tests his hand in front of the television camera before the Major League Baseball game between the San Diego Padres and San Francisco Giants on August 29, 2019 at Oracle Park in San Francisco, CA .
Bob Kupbens | Sportswire Icon | Getty Images)
Major League Baseball is at the negotiating table of media rights and has a wild card to play.
The league deal with Disney-owned ESPN is in renewal talks and the result could change the look of baseball on national television during the week. Some media experts believe the MLB Monday and Wednesday package is worth between $ 150 million and $ 200 million a year.
The talk began circulating when The Athletic reported that ESPN is willing to part with some of its baseball content. History led to predictions that MLB’s media rights fees could collapse.
“I think they will be sold, but not at the price of $ 350 million,” media rights expert Dan Cohen told CoNBC. Cohen, senior vice president of Octagon’s global media rights consulting division, said he believes MLB will lower the asking price of the package if that’s the figure. Not much, though.
“MLB is not looking to cede those rights for free,” Cohen said. “There is value for nationally televised baseball games on Mondays and Wednesdays.”
The fact is that it is not an exclusive value. And it’s making MLB creative about their future, with permission on the sports game as a lever.
Rhys Hoskins # 17 of the Philadelphia Phillies defeats Gio Urshela # 29 of the New York Yankees during a summer camp game at Yankee Stadium on July 20, 2020 in New York City.
Jim McIsaac | Getty Images
Double MLB game
To help its network partners overcome losses due to Covid-19, the league granted them permission to use limited sports game advertising sites.
MLB controls which ads run during games, although there are still restrictions on sports betting ads. During its pandemic season, in which networks were games with reduced changes, MLB approved the ads and helped its partners.
The National Football League made a similar move earlier this month, according to the Wall Street Journal. The league provided its national media partners with more advertising space during its postseason games and the Super Bowl LV.
Sports gaming companies like DraftKings and FanDuel spend millions on marketing. One of the best options for them is to buy ads about sports content.
Spending should continue. This means that MLB can again increase the number of ad sites it provides on the networks. Members will collect their dues and pay MLB a portion. In a way, the league protects its media rights.
Nothing exclusive
ESPN has a reason to devalue the MLB package. And again, the games on Monday and Wednesday are not exclusive.
In 2012, he agreed to pay MLB $ 700 million annually in an eight-year, $ 5.6 billion deal. ESPN gets an exclusive Sunday match and rights to the Home Run Derby.
But on Monday and Wednesday, regional sports networks also broadcast the games, which offers consumers in the market no incentive to watch ESPN broadcast.
“If the (New York) Yankees or (Philadelphia) Phillies games are available on a regional network, they get the most ratings and ESPN doesn’t do as well with their national game,” the former TV executive said. longtime and former CBS Sports president Neal Pilson.
“I always wondered why ESPN got this package in the first place,” Pilson added. “And if they give it up now, I think it’s a smart move.”
Octagon analysts used 108 of 114 games in the last three years to determine the average viewership of ESPN’s Monday-Wednesday package, not including ESPN2 broadcasts. The results: an average audience of 761,434 viewers in 2018, which dropped to approximately 632,000 in 2019.
The viewer dropped to an average of 358,947 in 2020, but the sports vision was also affected by the pandemic, social unrest and the U.S. presidential race.
“I call them semi-exclusive,” Cohen added. “Sometimes you talk about the big markets (New York, Los Angeles, Chicago, Boston, Philly), but 90% of the rest of the country is still missing.”
But in the absence of exclusive rights and other leagues, such as the National Hockey League, which is in sight, MLB may have a new home for its package.
ESPN, an MLB, declined to comment due to active negotiations.
MLB gets creative
Reports suggest that ESPN wants to reduce its annual fee by approximately $ 150 million. Assuming MLB starts its price at that figure or more, it plans to be creative around its bids to justify the cost.
Betting ads can attract networks. Another is the actual game, as MLB controls what can be displayed, as it can tell about the marketing that networks can use on the screen.
According to people with knowledge of negotiations, the league does not believe it should reduce the value of the package and will use its broadcast permissions to protect it.
Cohen suggested Sinclair might be interested in a partnership.
The company owns 14 regional networks that broadcast MLB games. It features a streaming game with Stadium, which was backed by Chicago White Sox owner Jerry Reinsdorf, one of the most powerful owners of the MLB club.
Sinclair could pay for the national package, feeding some of its content to Stadium and selling more advertising space with permission from MLB.
NBCUniversal is stepping down its sports network this year and moving media rights to the most accessible network in the U.S. The channel has a sporting history and NBCUniversal has just made a wrestling move with its Peacock service securing the rights to broadcast WWE matches in the United States. And with live entertainment, the main force protecting the cable model, NBC Sports could play MLB in the US and also access special advertising.
“There are a lot of things to keep in mind,” Cohen said. “I think they can be very smart and creative.”
MLB also has partnerships with Twitter, Facebook and YouTube, which means it already looks like it has streaming options. Using the streaming model, MLB could get short-term deals similar to the NFL’s Amazon package and create flexibility, as it wouldn’t be blocked in the long run for a partner.
And if ESPN moves away, MLB is moving forward in the media rights card game.
The league has already earned new royalties with Turner Sports, owned by Fox Sports WarnerMedia, adding a Tuesday game to its coverage. The network will pay more than $ 3 billion to retain baseball.
Whatever the game, MLB seems to have its wildcard and ready to use. And don’t forget, there are still additional postseason games that can be added to the fight. But for those, MLB will need permission from one of the major media rights partners: the players ’union.
Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.