November 16, 2018

A SURPRISING NEW DEAL

I am more surprised than the average fan.

MLBTR reports that MLB signed a huge deal with Fox.

MLB reached a new seven-year, multiplatform agreement with FOX Sports spanning the 2022-28 seasons. Eric Fisher of Sports Business Journal reports that the contract’s rough value is a staggering $5.1 billion — a near-50 percent increase over the total value of the existing agreement between MLB and FOX. Bloomberg reports a similar total figure and notes that on an annual basis, the agreement represents a 36 percent increase over the prior contract.

Major League Baseball owners approved a three-year, $300MM streaming rights deal with DAZN, wherein DAZN will offer a weeknight show whose coverage bounces from game to game throughout the league — “similar to NFL RedZone.”

Under the terms of the television agreement, FOX Sports and FOX Deportes will retain exclusive rights to airing the World Series, one of the two annual League Championship Series and two of the four annual Division Series and the All-Star Game. FOX will also continue to air a pair of games each Saturday, with today’s release indicating that the number of regular season and postseason games aired on FOX will begin to increase in 2022. FOX also secures expanded streaming, social media and highlight rights, per the announcement.

It’s an enormous windfall for the league and one that further places a spotlight on the ever-increasing revenue available to Major League teams in today’s game — even as league-wide attendance dips and World Series ratings fell dramatically. The financial specifics of each team (or of any team) remain unknown as such information (including revenue sharing figures) is not made publicly available.

But in a general sense, each team will benefit by $170 million or around $24 million/team/year starting in 2022.

From a media standpoint, this is not based on the traditional Nielsen TV ratings book. The rights purchase includes multiplatforms, which would include mobile, streaming, on demand, or the next viewing technology platform (such as the next Facebook). Fox is trying to capture those distribution channels, but it is unclear if this Fox deal hampers the growth of MLB's own internet game applications and subscription based streams.

One thing is certain: the news of this huge extension will be on the minds of the superstar free agents who will not take any idea that the owners are poor or hitting a rough revenue patch.