ESPN chief says baseball deal won’t raise costs to distributors
ESPN President John Skipper said the cable network’s new eight-year, $5.6-billion deal to keep Major League Baseball won’t mean it will ask pay-TV operators to pay more to carry the channel.
“We’re not going to our distributors to ask for an increase for our content,” Skipper said on a conference call with reporters to discuss the new contract.
Skipper’s words will be met with a sigh of relief from multichannel video program distributors (MVPDs). ESPN costs more than $5.00 per subscriber, per month, according to SNL Kagan, an industry consulting firm. That makes ESPN the most expensive national cable channel in the marketplace.
The new contract, which takes effect in 2014 and runs through 2021, will provide ESPN with more regular season games as well as a small piece of postseason baseball coverage. ESPN will also be allowed greater use of footage of baseball that it can use to produce additional programming.
Major League Baseball Commissioner Allan “Bud” Selig said the agreement signaled a “very historic day for baseball” and called ESPN’s financial commitment to the sport “extraordinary” and a “testament to the strength of our game.”
The $5.6-billion rights deal, which averages out to about $700 million per season, doubles what ESPN had been paying in its current contract. Though neither Skipper nor Selig would comment on the specifics of the pact, the commissioner did say, “We got over a 100% increase.”
ESPN may have heard footsteps while it was in talks with Major League Baseball. It’s no secret that NBC is looking hard at baseball to beef up its own NBC Sports Network, which is trying to compete against ESPN.
NBC, which has shown through its Olympics and NFL deals that it is willing to write big checks to land sports, will have two more shots at the national pastime. Fox and Turner Broadcasting’s deals with Major League Baseball are also up at the end of next season. Both are expected to fight to keep baseball.
Fox currently pays $259 million a season for baseball, and Turner is paying $149 million. Given the size of ESPN’s deal, it is clear that Major League Baseball will be looking for higher fees from Fox and Turner as well.
So far this season, ESPN’s baseball coverage on Monday, Wednesday and Sunday nights is averaging about 1.2 million viewers, according to Nielsen. That is a slight decline from the 1.4 million viewers ESPN averaged last season.
In addition to more regular season games and a wild card playoff game, ESPN also secured additional radio and digital rights as well as an expansion of its international rights to show baseball.
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