Major League Baseball finds itself scrambling.
After ESPN decided to exercise its option to exit the remainder of its $550 million per year deal with MLB, which initially took the two entities through 2028, the league is now left searching for new media partners to fill the half-a-billion-dollar void.
But how did we get here in the first place? Baseball has been a crucial part of ESPN’s rights portfolio for most of its history. Sure, the network pared back its offerings by axing Monday Night Baseball and Wednesday Night Baseball in 2021, but getting out of MLB entirely? Not many could have envisioned that from the Worldwide Leader in Sports.
ESPN’s decision to back out of the deal was primarily a dollars-and-cents equation. In the network’s eyes, $550 million should get you much more than a weekly regular season game, the Home Run Derby, and Wild Card round games. Just take one look at Fox’s agreement, which gets the network marquee playoff inventory through the World Series, the All-Star Game, as well as a regular season package, for just $180 million per year more than ESPN, and it’s clear that ESPN was getting a bad deal.
But a couple of seemingly minor deals on the complete other end of the cost spectrum might’ve done more damage to MLB’s bottom line than could’ve ever been imagined when they were signed. Those deals, of course, are the media rights agreements that MLB struck with Apple and Roku.
Why did these deals do so much damage? Two words: price tag.
Apple’s Friday Night Baseball package nets MLB $55 million per year (as well as an additional $30 million in ad spend from Apple). In return, Apple airs an exclusive package of regular season games each Friday for just 10% of the price that ESPN pays for its current Sunday Night Baseball package.
Roku’s MLB Sunday Leadoff package is even more of a steal. After NBC’s streaming service dropped the package, the company, which took over for Peacock in 2024, pays just $10 million annually for its exclusive midday Sunday games.
Due to these deals, if the rights fees earned from both properties were combined and distributed evenly to MLB’s 30 clubs, each team would net just over $2 million per season.
As Front Office Sports’ Ryan Glasspiegel pointed out earlier this week, these deals likely “ticked off” ESPN enough to opt out of the current contract. How could the network look at Apple and Roku, paying pennies on the dollar for packages not too dissimilar to ESPN’s, and justify its $550 million price tag? The simple answer is they could not.
As such, we are witnessing what could possibly be one of the most significant strategic blunders a major North American sports league has ever made regarding its media rights.
What initially seemed like an innocent way to expand MLB’s product into streaming has backfired. By selling off additional regular season inventory for a pittance, MLB told the market that national baseball broadcasts weren’t worth much.
Now, the league will be lucky to find another partner (or partners) that will pay anywhere close to what ESPN had agreed to in its original contract.
In hindsight, agreeing to deals with Apple and Roku at such low price points looks like a complete own goal from MLB. The league undercut its product to earn a few extra bucks. And in the process, it angered its fans, who now have to find games on different platforms rather than simply watching their local broadcast.
Ultimately, national baseball broadcasts may become relics of a bygone era in the not-too-distant future. Baseball is, and will remain, a local sport during the regular season. For MLB, striking a lucrative local media rights deal with the likes of Amazon or Netflix is much more critical in the long term than its national media rights situation.
Will national broadcasts still exist? Of course. But if MLB plays its cards right, they won’t be as vital to the league’s financial health as they are now.
However, creating the perception that national broadcast rights aren’t as valuable as the league did with Apple and Roku only accelerated that timeline. This makes the next three years—the final three years of the league’s current national deals with Fox and Warner Bros. Discovery—all the more important when it comes to formulating an overall media strategy for the future.