MLB hits long ball to ESPN

ESPN and Major League Baseball have extended their relationship via a new six-year, estimated $ 255 million TV deal that slashes both the annual rights fee and the number of games televised by more than half.

The pact, which calls for the cable channel to broadcast 70-80 games a season (compared to 150 this year, its last under a four-year deal), is the same duration as an earlier six-year network agreement with ABC and NBC that created a sales and revenue-sharing apparatus in which the League and the webs will jointly sell ad time during the games.

The ESPN arrangement — which also provides such concessions as reducing the network’s “blackout” radius and the right to cut into live games, not just during baseball programming — translates to a fee of $ 42.5 million a year, 56% less than the annual payment under the last four-year, $ 390 million pact.

ESPN — which is 80% owned by CapCities/ABC, with the balance held by Hearst Corp. — paid a $ 13 million penalty in October 1992 in declining to exercise its option on the 1994 and ’95 baseball seasons, for which the network would have had to pay $ 250 million, almost three times its annual payout under the new agreement, which runs through 1999.

The pact continues a major decline in broadcast revenues for baseball, which is in the last year of a four-year, $ 1.06-billion contract with CBS. The revised deals follow estimated losses of $ 275 million and $ 200 million posted by CBS and ESPN, respectively, on their previous contracts.

Prior to this year’s expansion into Colorado and Florida, the 25 Major League franchises split nearly $ 15 million from the two TV deals. With revenue from the ABC-NBC pact yet to be determined, it’s estimated the figure could be half that for 1994.

Separately, MLB announced a six-year extension with CBS Radio valued at $ 50. 5 million, about 35% less than a previous four-year agreement between the parties.

New elements of the ESPN-baseball arrangement include joint development of multimedia products, such as homevideo games and on-line computer services, and joint development of children’s programming for ESPN2, a second channel that continues to pick up coverage as ABC and Hearst reach retransmission consent deals linked to the service.

Another key facet of the pact is the creation of a single season-opening Sunday game that ESPN will televise prior to the traditional Monday start of the regular season.

ESPN will continue to televise events surrounding the All-Star Game, divisional tie-breakers and any games during the last two weekends of the season that affect pennant races.

In cutting the number of games carried, ESPN will still air a weekly Sunday-night game in addition to a Wednesday double-header. The pact also allows the service to air triple-headers on holidays (Memorial Day, Fourth of July and Labor Day) and opening day.

Beginning next season, ABC and NBC will each air six Friday-night primetime games after the All-Star break and split up rights to the League Championship Series and World Series on a rotating basis. Baseball has suffered declining ratings in recent years for its Saturday afternoon game.

Only two of the 27 franchises voted against the ESPN offer — with reports that one of them was the New York Yankees, situated in the U.S.’ largest media market. The team already reaps significant revenues through its local broadcast arrangements.

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