ESPN and Major League Baseball recently exercised a mutual opt-out in their seven-year media rights contract that will result in the termination of the deal following this season, which reportedly has a total value of approximately $550 million over the full term. John Skipper, the former president of ESPN, discussed the matter on the latest edition of The Sporting Class podcast having been at the helm for parts of the 35-year relationship between the network and the league. As the MLB on ESPN property enters its final season under the existing pact, there has been speculation as to the future of the rights, along with analysis of a letter MLB commissioner Rob Manfred sent to owners obtained by The Athletic.
Conjecturing that ESPN likely wanted the opt-out, Skipper explained that when the company did this deal, it had several negotiations in front of them surrounding various marquee properties, including the NFL, NBA and College Football Playoff. As a result, he assumed that ESPN pushed for an opt-out in the media rights negotiations, a condition he surmised the league would have been fine with due to perceived discontent about how it was being treated.
“My instinct is that ESPN wanted not to go long term because they had other money they were going to have to spend,” Skipper said. “They have to save some money in the current environment, and they wanted the option to save that on baseball, but I do not know that they made the decision before baseball or baseball made the decision before them.”
Skipper acknowledged that the letter written by Manfred sounded like someone who was being served rather than the other way around. Within the note, Manfred stated that the league did not think it would be beneficial for it “to accept a smaller deal to remain on a shrinking platform” and indicated that it would have at least two potential options to consider in the next few weeks.
David Samson, the former president of the Miami Marlins, subsequently conveyed that he was more than happy to have this letter released and that it pointed out that the owners would be fine in moving away from a partner that was ostensibly not valuing assets in the manner that others will. Pablo Torre, the co-host of the show, followed up by asking Skipper how what Samson said landed with him.
“When I was there, I got more complaining from baseball than anybody else,” Skipper recalled. “I frequently asked, ‘What percentage of the highlights on SportsCenter are baseball?,’ and the answer was never the answer I would have expected given the tone of the, ’Oh, it’s minimal coverage. We’re never on.’ Take a random SportsCenter from baseball season and it is full of baseball highlights, and there was never any direction from me.”
Although he averred that he cannot surmise what the direction has been like since his departure, he mentioned how various on-air personalities frequently discussed the topics. There were also occurrences where he thought why the network had nothing but baseball highlights in the SportsCenter Top 10. Rather than the coverage, Skipper opined that the biggest problem for ESPN will be in obtaining highlights, something where Manfred could then presumably make up some of the lost remuneration.
“I don’t think he’s going to get more than $550 [million] from anybody else, but I would go back and he will get some couple hundred million dollars from ESPN for highlights, so he’s going to add everything together, and it may add up to more,” Skipper said. “I do not believe there is a single entity in the market that is going to pay $600 million for ESPN’s package.”
Samson replied to this assertion by explaining that even if baseball had to work with four different media partners and still received more money in the aggregate, it would be considered a victory for the league. At the same time, he pointed out how ESPN had sought to move select baseball games to ESPN2 and never did anything with ABC , revealing internal memos that would track platforms on which games aired.
Skipper articulated that decisions surrounding programming centered around what rated best and other contractual obligations rather than what the network liked most. In reply to this, Samson reminded Skipper that he had commented on ratings being overemphasized on a recent episode of the show and also claimed how the league is trying to get its product to as many people as possible despite a diminished pay TV penetration rate. Recent data from Nielsen Media Research demonstrates that ESPN and ESPN2 are both in 64.2 million households, down from the peak of 100 million homes in 2011.
“I am denying that ESPN is a declining platform,” Skipper said. “The cable television universe is declining. The overall ESPN platform – I don’t have access to the numbers – but my guess is about as many people watch some version of ESPN as have ever watched it, and the ratings aren’t down nearly as much as the number of households.”
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