The peculiar arrangement between ESPN and Major League Baseball is reaching a pivotal moment ahead of the network’s opt-out date on March 1. ESPN believes it is over-paying for its package at $550 million a year, covering regular season and Wild Card games, along with the Home Run Derby. Consequently, ESPN is considering opting out of the deal early, which is set to expire in 2028.
As rumors circulate and teams prepare for training camp in Arizona and Florida this month, MLB leaked its response to The Athletic, which reported that baseball is threatening to seek a new partner if ESPN opts out after this season. While both sides engage in a public war of words, insights into the actual situation are starting to emerge. With the traditional local TV model declining, MLB commissioner Rob Manfred is discussing selling a comprehensive package that would encompass local rights for all teams starting in 2028.
This package would likely necessitate a streaming platform capable of offering tiered subscriptions and a customized interface by market. Therefore, ESPN and any potential new broadcasting partners are eyeing those local rights. However, MLB is aware it must secure the most lucrative deal possible in 2028 to offset significant losses experienced by teams. Andrew Marchand from The Athletic elaborated on the standoff during a recent SI Media podcast appearance:
“There’s a larger issue for MLB that’s really kind of hovering over all of this. ESPN might threaten to opt out but remain under certain conditions, such as access to the local rights on their upcoming direct-to-consumer ESPN product, allowing customers to subscribe without traditional cable. They might consider an add-on for local rights, but as of now, no discussions have taken place. If Amazon somehow entered the bidding, the intent would likely be to position themselves for future streaming opportunities.”
This doesn’t mean ESPN is guaranteed to leave. They might opt out and still negotiate a new agreement with MLB, even without local rights. Given that baseball is a significant draw during July and August, losing it could create a void in major live sports for the network, especially as they establish a direct viewer relationship through their new streaming service. However, there has been reported “real friction” as negotiations intensify.
From the MLB perspective, they cannot disregard the upcoming two seasons. It’s challenging to identify a short-term partner for the 2026-2028 period when existing deals with Fox and TNT Sports conclude. Marchand doubts any other company, even a financially robust Amazon—which already broadcasts weekly New York Yankees games—can rival ESPN’s current $550 million contract for a short-term deal. If MLB pursues the highest payout for those years, they risk losing audience engagement, as their experiments with streaming partners like Peacock and AppleTV+ haven’t generated substantial viewership.
As Marchand pointed out, “If I’m baseball, I want to be in business with ESPN. The emergence of streaming offers is imminent, but I’m concerned about the effectiveness of those experiments.” ESPN has a dedicated audience that expects to watch baseball, having been intertwined with the sport throughout its history. Fans associate Opening Day and Sunday nights with ESPN baseball coverage.
Both parties recognize the importance of maintaining their relationship, but the stakes are high. ESPN stands as baseball’s second-biggest partner, with its new app being a potential avenue for Manfred’s grand local TV vision. Simultaneously, baseball serves as essential content for ESPN as it competes for viewership amid the changing media landscape. However, deals have collapsed over financial disagreements before. It appears crucial for MLB to find a new partner capable of matching ESPN’s $550 million revenue while providing a suitable platform for their future local package ambitions.
