Disney's ESPN and Major League Baseball (MLB) have ended their nearly four-decade-long partnership, reflecting the changing dynamics of the streaming era. The decision underscores the increasing scrutiny faced by longstanding content relationships as sports rights costs rise, leaving entertainment conglomerates to strategize on payment methods.
In a statement released on Thursday evening, ESPN expressed gratitude for the enduring relationship with MLB and took pride in its coverage that "super-serves fans." The network emphasized its commitment to fiscal responsibility and its focus on expanding its audience through linear, digital, and social platforms. ESPN remains open to exploring new avenues to serve MLB fans beyond 2025.
The existing agreement, a seven-year deal initiated in 2022, included an "opt-out" clause in 2025. This clause allowed either party to terminate the contract under specific conditions—a strategic necessity in a time when media companies are keen to acquire sports rights for their streaming services. Despite the plethora of content choices available, sports remain a unique format capable of attracting large simultaneous audiences, highly coveted by advertisers.
ESPN informed MLB of its decision to terminate the deal at 9:45 a.m. on Thursday. ESPN Chairman Jimmy Pitaro later followed up with the MLB Commissioner. ESPN currently pays approximately $550 million annually for MLB rights. However, dissatisfaction has grown due to smaller agreements MLB has reached with Apple and Roku, which offer exclusive games for lesser fees, undermining ESPN's financial commitments.
Concurrently, MLB executives expressed discontent with the minimal coverage received from ESPN outside of live game broadcasts. ESPN's primary shows, such as "Get Up" and "First Take," focus predominantly on NBA and NFL developments. While ESPN has attempted new concepts like "KayRod," these haven't achieved the success of programs like the "Manningcast" or "Inside the NBA."
Disney has heavily invested in sports rights, securing long-term deals with both the NFL and NBA, costing millions over the contract durations. Despite baseball's status as America's "national pastime," it hasn't matched the audience engagement levels of these other sports. ESPN executives have noted that the regular-season games and postseason packages were not performing to expectations relative to their costs.
Despite parting ways with ESPN, MLB is exploring options with other interested parties. According to MLB Commissioner Rob Manfred, discussions are underway with several entities, and at least two potential options are expected in the coming weeks.
ESPN may still pursue collaborations with MLB. Last year, Pitaro proposed delivering local games via a planned new streaming service. However, Manfred dismissed the idea, stating MLB's preference for not devaluing its rights on a shrinking platform. Instead, MLB aims to optimize its rights by seeking new broadcast or streaming partners for marquee events like regular season games, the Home Run Derby, and the Wild Card playoff rounds.
Currently, MLB maintains rights agreements with Warner Bros. Discovery and Fox Corp. In response to the weakening of regional sports networks based on cable, MLB has been asserting more control over local game broadcasts, positioning itself strategically for future deals.
