Report: ESPN Has an Opt-Out Clause for MLB Contract That Can be Triggered After 2025
The clause could be used as leverage with MLB in negotiations for local rights, or ESPN could view it as a way to save money as the network transitions to streaming.
If things inside ESPN’s corporate headquarters are as manic as they appear to outside observers these days, this writer hopes everyone is staying hydrated. The news from ESPN is seemingly never-ending these days, as the company tries to plot out its strategy for the next five years in terms of sports quantity and distribution.
- ESPN could opt out of its deal with Major League Baseball after the 2025 season.
- The channel spends $550 million on MLB rights every season, but an expensive pivot to streaming might compel a cost-saving initiative that means sacrificing some sports rights.
- ESPN could also swap its current rights package for local broadcasting rights to MLB games that would stream on ESPN+.
Taking its Ball and Going Home
Andrew Marchand of the New York Post reports that ESPN’s future could be baseball-free after the 2025 season. The network has an opt-out clause that will allow it to abrogate its contract with MLB after that season, meaning it would no longer be on the hook for the $550 million per year it currently pays the league to air “Sunday Night Baseball,” the playoffs, the Home Run Derby and a daily ESPN+ game that is blacked out in the home markets of the teams playing.
One reason ESPN is reevaluating its future baseball plans is a dip in ratings for “SNB” this year, which declined by 2%. Ratings dropped 18% during the playoffs as well, but the poor returns on the weekly “Sunday Night Baseball” broadcast have ESPN wondering if the league’s rights are really worth it in the long term.
ESPN could do a lot with an extra $550 million per year. It may want to use that money to invest more heavily in the NBA, instead of pulling back on that investment as it reportedly plans to do. The network could also spend more on college football rights, or just pocket the savings and use the money to help it create a direct-to-consumer version of ESPN that doesn’t require a cable subscription, which Disney wants to launch by 2025.
Trades Aren’t Just for Players Anymore
Alternatively, Disney could use its current contract with MLB as a negotiation tool. The league is looking for a new broadcast partner for its local rights, as it struggles to get its teams away from Bally Sports-branded regional sports networks has been well documented. ESPN wants those local rights and would like to create a new, higher-priced ESPN+ tier to house them according to Marchand.
Such a move could be mutually beneficial. MLB commissioner Rob Manfred has expressed his desire to see a 30-team streaming platform that offers all games in-market, but popular teams like the New York Yankees already have their own in-market streamers, and they don’t have to share any profits from those platforms with other clubs. Sending local rights to ESPN+ would preclude the need for large MLB teams to subsidize small ones, and would keep MLB associated with the ESPN brand.
If ESPN and MLB do decide to part ways completely after 2025, keep an eye on Apple as a potential new partner. Apple has expressed interest in the NBA, the Pac-12, and Formula One racing this year, and it already holds the rights to a package of Friday night MLB games which it shows to subscribers for no additional charge on Apple TV+.
All sports leagues and media companies are currently grappling with the rise of streaming and the demise of the old, lucrative cable model. Each will have a different solution, and ESPN and MLB might have to get creative to ensure they’re both in a stable position once cable is finished for good. But ESPN has a good amount of flexibility as it decides its next steps, thanks to an opt-out clause in its MLB contract that can be triggered after the 2025 season.
ESPN+
ESPN+ is a live TV streaming service that gives access to thousands of live sporting events, original shows like Peyton’s Place, the entire library of 30 for 30, E:60, The Last Dance, as well exclusive written analysis from top ESPN insiders. Sports available on ESPN+ include NFL, MLB, NHL, UFC, College Football, F1, Bundesliga, PGA Tour, La Liga, and more.