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MLB Plots a New TV Model After Striking Out With ESPN
The big sports network is walking away from the national pastime, accelerating baseball’s need to cope with the demise of the TV economy that fueled its growth for decades.
By
Jared Diamond and
Isabella Simonetti
March 2, 2025 - 9:00 pm EST
Many U.S. sports leagues these days are awash in unprecedented amounts of money from television networks and streamers eager to pay skyrocketing sums for their valuable content.
And then there is Major League Baseball. When ESPN chairman Jimmy Pitaro visited MLB commissioner Rob Manfred late last year, he carried a harsh message: America’s most prominent sports network thinks baseball’s TV rights are declining in value.
ESPN has recently been paying $550 million a year to show baseball games, already hundreds of millions less than a few years prior. Now, he was back to tell Manfred that ESPN planned to exercise an opt-out clause to escape the final three seasons of its contract with MLB, people familiar with the matter said.
Pitaro said he was open to discussing an entirely new deal at a lower valuation. Manfred, annoyed by the suggestion, quickly shut down any possibility of accepting less money. (ESPN would have been looking to cut its deal with MLB by more than half, to no more than $200 million a year, people familiar with the matter said.)
Manfred has navigated several tough crises during his 10-year tenure as commissioner, including the Covid-19 pandemic, a bitter labor dispute and a cheating scandal that cast a pall over the 2017 World Series.
But the spectacle of ESPN sending MLB to the showers early, like a star pitcher being yanked from the big game, adds new urgency to what has become the most profound problem Manfred has faced: coping with the collapse of the TV economy that fueled the industry for decades.
The sport has already been grappling with the fallout from a rapidly changing consumer and technology landscape that is upending its longstanding economic model. Under the current system, the league sells the rights to nationally televised regular-season and playoff games—like the inventory ESPN is relinquishing—and divides the revenue among all 30 teams.
Individual franchises forge their own deals with local regional sports networks and keep the money for themselves. Baseball teams derive an average of about 25% of their revenues from local media, by far the most of any major American sport.
But regional sports networks, which air most games, have fallen apart in some places—depriving small-market teams of revenue at a time when big-market behemoths like the Los Angeles Dodgers are raking in huge sums from their local TV deals. The result is a yawning imbalance that is threatening the ability of all but the biggest teams to compete for the best players.
Now, ESPN’s departure after partnering with MLB for 35 years makes matters worse. The league is left to find a new national broadcast partner or partners for the 2026 through 2028 seasons, while Manfred also tries to execute an ambitious and wildly complex plan to overhaul baseball’s long-term television strategy.
“I think the market is going to be surprised at the enthusiasm and uptake on the interest in these sets of rights,” Atlanta Braves chairman Terry McGuirk said.
In the stretch before his contract expires in 2029, Manfred wants to take charge of the league’s dizzying array of local media rights in the name of forging more lucrative, centralized rights deals. The change, he says, could give MLB the kind of bargaining power that the National Basketball Association had just used to ink a historic $77 billion streaming and broadcast package.
Manfred’s model would require teams to cede control of their local rights to the league office so that MLB could sell them collectively as a unified streaming package. Viewers would be able to purchase the games of teams they want to see without the blackouts that have long vexed devotees who actually live near where their favorite team plays.
No cable subscription would be required. Revenue would be distributed among all teams, like it already is for national deals with Fox and Warner Bros. Discovery.
Meanwhile, MLB would continue to sell the rights to high-profile national events, like postseason series and exclusive Sunday night games, to multiple interested companies.
“The change that we’re talking about,” Manfred said in an interview, “is the only rational response to where the media market is today.”
Manfred’s vision would be a huge departure from the way baseball enriched itself in recent decades.
In the cable era, subscribers paid for a bundle of channels, including regional sports networks, regardless of which ones they actually watched. For decades, those sports networks forged broadcast deals that enabled the teams to pay ever-growing player salaries in a league with no salary cap.
Those spigots have begun to dry up, and local streaming packages that have been launched in some markets haven’t made enough money to make up for the loss of cable revenue. Even major networks like ESPN are being more judicious about their spending on content.
“The big picture story is the old systems’ profits and margins aren’t being replicated by the new system, at least not yet, maybe never,” said Patrick Crakes, a sports media consultant and former senior executive at Fox Sports.
The problem is that today’s media market looks vastly different to small-market teams like the Milwaukee Brewers and Pittsburgh Pirates than it does to economic juggernauts like the Dodgers and New York Yankees. Franchises like the Brewers might have the most to gain from an overhaul, as they could close the gap between themselves and big-market outfits, resulting in budgets to sign more star players.
The more difficult task for Manfred will be convincing teams like the Yankees, Dodgers, Boston Red Sox and Chicago Cubs that giving up control of their local media for the greater good will ultimately benefit them, too.
At a November meeting at MLB’s New York headquarters, Manfred told owners that putting more games on national outlets was critical to maximizing league revenue. He spelled out his vision for the new rights package, which he hopes to bring to market when MLB’s current national deals with Fox and Turner Sports expire in 2028.
Not all owners were convinced. Yankees boss Hal Steinbrenner indicated afterward that he thought that Manfred’s idea to bundle local rights should be optional for teams—a notion that would undercut the entire concept.
The most affluent teams are likely to demand compensation to be included, another obstacle that Manfred will have to contend with.
Cubs president Crane Kenney said in a recent interview at the team’s spring training facility last week in Mesa, Ariz., that his team would be willing to go along with a new TV model—as long as it accounts for his organization’s status as one of baseball’s highest-revenue teams.
“Treat us fairly,” Kenney said, “and we’re in.”
The current system, in which teams control their local media rights—and the profits from them—has created an economic disparity between organizations like the Dodgers and Yankees and their small-market counterparts. The league fears that divide will grow, hurting competition and diminishing fan interest.
The imbalance is already emerging. The Dodgers, who signed a 25-year, $8.35 billion local TV deal with Time Warner Cable in 2013, have a player payroll of nearly $400 million this season. Their roster features an otherworldly amount of talent, highlighted by three-time MVP Shohei Ohtani, who is widely seen as baseball’s best player.
The Yankees, who own a share of the YES Network, have a payroll of close to $300 million, powered by stars Aaron Judge and Gerrit Cole. Meanwhile, the Miami Marlins, which generate a fraction of what the Dodgers do in local media rights, have a payroll of $68 million, according to data compiled by Spotrac.
What’s clear is that the status quo isn’t working for everyone.
Though 22 of the 30 MLB teams now offer a direct-to-consumer streaming package, local blackouts remain a scourge for fans in some markets who have cut the cord. MLB.tv, which costs $149.99 a year (or $29.99 a month), only offers out-of-market games, making it a challenge for, say, an Astros fan in Houston, without cable, to watch the team regularly.
“If I don’t get assaulted three times every time I’m in the ballpark about blackouts,” Kenney said, “then I wasn’t in the ballpark that day.”
The Cubs, one of the league’s big teams, launched their own regional sports network, Marquee Sports Network, with Sinclair Broadcast Group in 2020. They have notched several wins, including recent Emmy awards, but still confront difficult economics.
“How’s it going? I mean, I wish it was 2012,” Kenney said. “Unless you’re the Dodgers, you’re suffering through the same headwinds.”
Five teams—the Arizona Diamondbacks, Cleveland Guardians, Colorado Rockies, Minnesota Twins and San Diego Padres—no longer have any deal at all with regional sports networks and rely on the league to produce and distribute their games through local TV stations and direct-to-consumer streaming packages. Without those local deals, their revenue has taken a hit: many of those teams receive a subsidy from the league.
Diamondbacks owner Ken Kendrick said cord-cutting would affect almost every team. “It’s just who is more affected early versus late,” he said.
Nine other teams, including the Los Angeles Angels and St. Louis Cardinals chose to renegotiate their contracts over the last year with what was then called Diamond Sports Group, which emerged from bankruptcy earlier this year after flirting with liquidation. The company used the critical mass of teams to forge new distribution deals with cable companies like Comcast, DirecTV, Cox and Spectrum that are less lucrative than during cable’s heyday, but offer steady streams of revenue.
Diamond, which is now called Main Street Sports Group, also signed deals with
Amazon and its largest debtholders through which its local channels are sold through Prime Video as an add-on subscription. The new offering, sold as FanDuel Sports Network, costs $19.99 a month and includes all locally-produced MLB, NHL and NBA games.
The league could find itself competing with Main Street for a streaming partnership.
Main Street has discussed potentially bundling its streaming offering with ESPN’s flagship direct-to-consumer service, which is scheduled to launch later this year, according to people familiar with the matter. Such a partnership would represent a way for ESPN to offer baseball without making hefty rights payments and still earn additional revenue from the bundle.
While ESPN was eager to keep some baseball, executives there felt their rights package was steep compared with what rivals pay MLB. Manfred argued that ESPN’s deal wasn’t comparable to those and that his constituents—the team owners—wouldn’t accept an agreement with a lower rights fee.
ESPN was set to pay $550 million a year from 2026 to 2028 for the right to air 30 regular season games per season, as well as the annual Home Run Derby and Wild Card playoff round. Apple pays $85 million a year for a package of Friday night games, while Roku pays around $10 million a year for a number of Sunday games.
Whether or not ESPN is part of the equation in the near term, Manfred believes he will be able to generate the consensus among owners needed to move forward with his plan.
“I 100% believe that there is a path to getting it done,” he said, “and it is a path that at the end of the day produces a sport that’s more competitive and a hell of a lot healthier.”
Write to Jared Diamond at
jared.diamond@wsj.com and Isabella Simonetti at
isabella.simonetti@wsj.com
