Only time will tell whether fans, players and even Congress approve of ABC and NBC’s joint deal with Major League Baseball, but the terms reflect a clear boon to the networks. They offer virtually no downside and the chance to broadcast such high-profile events as the All-Star Game and World Series.
Foremost, in the deal finalized late last week, the two networks have averted potential losses like those suffered by CBS on its four-year, $ 1.06 billion baseball deal, which expires after this year’s World Series. CBS wound up writing off more than $ 450 million.
The new contract takes effect next year.
NBC paved the way toward this agreement with its recent four-year extension with the National Basketball Assn., involving profit-sharing once the network had recouped its investment from an estimated $ 750 million rights fee.
Still, NBA ratings have been on the increase, while baseball viewership has been on the wane, down to just over a 3 rating for CBS’ Saturday afternoon game.
Major league owners approved the revolutionary six-year, ABC-NBC deal Friday by a vote of 25-2 with one abstention. As noted, the deal is unique in that it involves no upfront money for broadcast rights. Baseball and the webs will form a separate company to sell advertising and share revenue, with more than 80% of proceeds going to baseball. The parties will share the reported $ 16 million start-up cost.
The deal will also move all regular-season games (a dozen each year following the All-Star break, with six to air on each network) into prime time and break down all coverage except for the World Series by region, with the network cutting between games, as CBS has done during the opening rounds of the NCAA tournament.
ABC has also enjoyed increased viewership by regionalizing its college football coverage.
The last two games of each League Championship Series would air concurrently but be staggered so viewers can catch the end of each game. A new round of divisional playoffs may also be added, with eight teams qualifying, subject to approval by the Major League Baseball Players Assn.
The regionalization has provoked Congress into threatening to revoke baseball’s antitrust exemption status, but baseball has declared that pay-per-view for postseason play — one of Congress’ fears — won’t occur in the duration of the contract. ABC has experimented with pay-per-view on the college football telecasts.
Additionally, if two teams from one market are in the playoffs, one game will be carried by an alternate over-the-air station. Since New York, Los Angeles and Chicago are three of the markets (San Francisco would be another) where such a scenario could occur, and ABC and NBC both own stations in all three markets, that wouldn’t present a particular problem.
CBS had proposed a last-minute, two-year baseball deal with $ 120 million upfront payments per year and a split of ad revenue over $ 150 million, without an additional round of playoffs.
Both baseball and CBS officials have acknowledged that the Eye network vastly overpaid for the rights four years ago, which had belonged previously to ABC and NBC. At the time, CBS was in third place and seeking to find a way out of the ratings doldrums.
With a revived lineup — as well as some help from the World Series, Super Bowl and Winter Olympics — CBShas been No. 1 the past two seasons, and baseball has never proven to be as strong a platform for introducing new series, with the three-week playoff period at times seeming more disruptive than anything else in terms of its effect on the web’s regular prime time lineup.
Prime time benefits
By splitting the playoffs, NBC and ABC will avoid devoting as much of their prime time schedule to baseball. The regular-season games, meanwhile, won’t begin airing until July — traditionally a lower-viewing period when the webs rely largely on series repeats.
Without specifying a night, the networks said those weekly games will be on “non-school nights to generate greater viewer interest among younger baseball fans,” indicating a Friday or Saturday slot.
Baseball owners, meanwhile, now have to brace for a decline in television revenue, with estimates that the more than $ 15 million each club receives per year from their CBS and ESPN contracts will be roughly halved by new agreements. With that in mind, network officials have been puzzled by the multimillion-dollar, multiyear agreements owners have entered into with ballplayers.
San Diego Padres owner Tom Werner, a principal in the Carsey-Werner Co., which produces ABC’s “Roseanne” and the upcoming sitcom “Grace Under Fire,” serves on baseball’s three-man TV negotiating committee.