ESPN in $5.6 billion deal for baseball TV rights: sources

By Lisa Richwine and Steve Ginsburg (Reuters) РThe ESPN sports network has agreed to pay Major League Baseball $5.6 billion over eight years for broadcast TV and digital rights rights through 2021, sources familiar with the deal said on Tuesday.
ESPN, a major profit driver for owner Walt Disney Co, will pay an average of $700 million a year, nearly double its current payments to the league, said the three sources who asked to remain anonymous.The deal sets a record for baseball broadcasting rights, Major League Baseball said in a statement, without disclosing the financial details.Under the deal, ESPN will retain rights to “Sunday Night Baseball,” Monday and Wednesday night games, and highlights for “Baseball Tonight,” the network said in a statement. ESPN also gains one post-season game annually during the Wild Card round of the playoffs. The game will alternate each year between the American and National leagues.

The agreement, which starts in 2014, also includes digital, international and radio rights. ESPN will be able to run more content on its TV and digital platforms, including a new daily baseball show. The number of regular-season games it broadcasts each year will increase to 90 from 80, including four games during the pennant chase in the last two weeks of September.

Now, ESPN pays about $306 million annually to Major League Baseball for domestic television rights, and about $50 million for digital, international and radio rights.

Live sports programs are among the most valuable broadcasts to advertisers because viewers typically watch them live without skipping commercials. Because of that, sports leagues have been winning larger payments in contract negotiations with television networks.

Last year, ESPN struck a $15.2 billion deal with the National Football League that will keep “Monday Night Football” on the network through 2021.

Network executives say demand for sports remains strong and they are confident they can make back their rights payments through advertising dollars.

Disney shares fell 4 cents to $49.67 on the New York Stock Exchange at mid-afternoon.

(Reporting By Lisa Richwine and Steve Ginsburg)

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