ESPN re-ups with Major League Baseball

(Editor’s note: the wrong draft of this article was posted earlier. This is the correct version. -T.H.)

It’s been the mantra for the last couple of years now: whatever ESPN wants, ESPN gets.

I guess there are some benefits to being The Worldwide Leader in B.S.

ESPN announced on Tuesday a renewal deal with Major League Baseball, with the sports cable network paying a grand total of $5.6 billion over eight years, extending the contract through 2021. The deal takes effect in March 2014.

The news was first reported on Sports Business Journal’s website on Tuesday.

In addition, ESPN gains additional digital rights, such as live streaming and on-demand highlights, more regular season games, and more exposure for more-popular teams – in other words, we’ll see more of the New York Yankees and the Boston Red Sox (and probably the Chicago Cubs, too), whether we like it or not.

Plus, the deal allows for expanded radio and international rights, and they get a wild-card playoff game and all tiebraker games, essentially taking those rights away from TBS (the rights were not part of the playoff package.)

And the deal virtually eliminates all home blackouts of ESPN games, even if the game is airing simultaneously on local TV.

Also, ESPN gets the rights to produce a new studio show, and show in-progress and expanded highlights on SportsCenter.

ESPN have held the rights to MLB since 1990, and this deal ensures them of achieving thirty years of airing the sport.

But here’s an alarming thought.

You have to wonder why ESPN – and other networks who are interested in the remaining existing packages up for bids –  is sinking money in a sport where in many cities, there are more empty seats than there are fans. Earlier this week, the Baltimore Orioles drew under 15,000 a game for a series against the Chicago White Sox –  another team in the pennant race that’s having their own attendance issues. Other pennant contenders – notably the Pittsburgh Pirates, Oakland A’s, and the Tampa Bay Rays – are also having problems drawing fans. If these teams make the playoffs, it could cause a ratings problem for TBS and Fox, who hold rights to the postseason. In an era where there are plenty of entertainment choices at one’s disposal, watching a playoff game on TV featuring a sparsely populated stadium won’t be all that appealing.

The teams with the strongest fan bases – the Yankees, Red Sox, and Cubs – have been practically carrying the league for years. And two of those teams are not even in the playoff race this year.

In a sport which is known to skew to an older audience, MLB is simply riding the wave of big-time sport contracts recently cut by the NFL and the NHL, and several collegiate conferences, including the Pac-12 and SEC. Sports in general are increasingly becoming more valuable to networks and advertisers as few viewers DVR games and skip commercials.

And note how ESPN is never in a retrans standoff with MSOs – cable operators and satellite providers. Instead, its either broadcasters or other cable networks who are in these standoffs, which are increasing in nature. They have no problem paying $5 a customer to ESPN, but somehow have a problem paying the same amount of money to a broadcaster or a non-sports cable network.  MSOs would face a backlash if they ever thought of removing ESPN from their lineups – they would rather take the backlash from non-sports fans. In other words, a loser team like the Cubs are more valuable to them than Don Draper from Mad Men or Snooki, or whatever the pop culture fad of the moment is.

And speaking of MSOs, ESPN president John Skipper said the network has no plans to pass the costs to MSOs, which usually pass any increased costs to customers. Yeah, right. Given the increase in cost, there’s no way ESPN will hold the line on prices. Maybe John Skipper should run for Congress.

For ESPN’s sake – and for the sake of those networks overpaying for the next set of baseball rights, they better hope the Yankees, Red Sox, and Cubs are in pennant contention each year.

Because someone is going to have to pay for those packages.

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