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ESPN Breaks Ice With Baseball

9/16/2005 8:00 PM Eastern

Major League Baseball hit a cable-TV rights home run last week, scoring a new eight-year, $2.4 billion agreement with ESPN. Baseball — whose ESPN rights fee improved by about 50% — also has the ability to connect with a quartet of other national cable packages through 2013.

With the new ESPN deal, commissioner Bud Selig said MLB has the “flexibility” to shop as many as 150 additional contests to as many as four cable networks — almost assuring that ESPN won’t be the only national cable entity offering ball games.

Baseball’s Financial Hits
New Deal Previous Deal
Cable* ESPN
$296 million $197 million
Radio ESPN
$11 million Included
New Media+ ESPN
$30 million Included
Satellite Radio+ XM
$60 million Included
TOTAL
$397 million $197 million
* Baseball has option to sell up to four more additional cable packages
+ Deals completed earlier this year
Source:MCN research

HOME OF BRAVES

Those exposures include TBS’s current 70-game national Atlanta Braves package, which ends after the 2007 season. A TBS spokesman said the former Superstation is interested in renewing that agreement with baseball, but it’s unclear if the now-comedy-leaning network would telecast the same number of games under a new deal.

The door is certainly open for Comcast Corp.’s OLN, coming off its recent acquisition of National Hockey League rights, to add marquee summer sports programming to its burgeoning national portfolio.

Executives from OLN would not comment, but company sources said the network held discussions with the league about a potential package.

According to a source familiar with the deal, Comcast and OLN passed on a primetime package with MLB. But that source said the cable company asked baseball to keep the door ajar.

At this point, Comcast is disinclined to play, because the packages would not offer exclusivity. Still, the source said Comcast’s interest level would heighten again, should it succeed in securing the NFL’s late-season Thursday-and-Saturday package.

With NFL and NHL programming already on board, baseball would give OLN a year-round schedule with professional team sports.

Negotiations for the NFL package are expected to take place this fall.

NATIONAL BOOST

Kagan Associates sports analyst John Mansell said OLN would benefit from acquiring a national baseball exposure.

“If you want to have a sports service in the summertime, you really don’t have any other option,” he said. “So even if were only to get a one or two rating, that’s still a decent number compared to most other programming on these days.”

OLN could bid for a suite of weekday games and post-season telecasts that currently air on ESPN and ESPN2. Rights to that package, which expires in 2006, were originally held by Fox Family Channel. The games were moved to ESPN following parent The Walt Disney Co.’s 2002 acquisition of Fox Family, now ABC Family.

Those rights are sublicensed from Fox Sports, though, and could be part of an overall Fox renewal of its broadcast deal with baseball, which also ends after next season.

A Fox Sports executive would not comment on the company’s plans for the package.

Baseball also could place a package of games on its proposed Baseball Channel, although Selig would not reveal programming specifics or set a launch date for the service. MLB officials earlier this year said the channel, expected to showcase vintage baseball programming, would launch this fall.

ESPN agreed to pay baseball an average of $296 million per year under the new deal, a 51% increase over the network’s current $197 million pact, according to sources.

The network will telecast upward of 80 games a year, with exclusive telecasts on Sunday. On Monday nights, ESPN has the right to lift local blackout rules up to three times per team during the year, while its Wednesday night telecasts are still subject to the rules.

The deal piggybacks an earlier new-media deal with baseball that includes various broadband, wireless and fantasy-sports rights.

Through that agreement, ESPN can stream live baseball telecasts via wireless phones through its ESPN360 initiative.

The network will also share with Major League Baseball Advanced Media the exclusive rights to sell and cobrand MLB.com’s subscription package of live, out-of-market game Webcasts.

“With this agreement we’ve acquired wide-ranging rights to fuel all of the multimedia businesses of ESPN that today number over a dozen, and will continue to grow over the terms of this agreement,” ESPN and ABC Sports head George Bodenheimer said.

ESPN has had relative ratings success with baseball telecasts this year, despite the steroids scandal that has shadowed the sport.

Through 87 telecasts, ESPN averaged a 1.0 household rating, down slightly from the 1.1 average last year for 74 telecasts through mid-September.

ESPN2 has averaged a 0.6 rating for 40 telecasts, even with last year through 56 telecasts.

The ESPN/MLB deal also includes rights to several Major League Baseball All-Star Week events, including the All-Star Home Run Derby, All-Star Legends & Celebrity Softball Game, and the XM Satellite Radio All-Star Futures Game, plus up to 10 spring training games each year.

ESPN also receives the right to produce a new live pre-game, batting practice program that will generally originate from the site of ESPN’s Monday Night Baseball telecast.

September