Baseball eyes new $1 billion TV contract in off-season

October 31, 2011 1:37 PM0 commentsViews: 27

Baseball eyes new $1 billion TV contract in off-season

The Major League Baseball season just ended, but the league is already weighing plans for a new television contract potentially worth more than $1 billion.

MLB’s current deals with ESPN, Fox and TBS expire after the 2013 season, and sources said all three networks are likely to be involved in the next round of negotiations, which are expected to begin this off-season. These people said NBC Universal and CBS are also interested in joining the talks.

The dramatic climax to this season’s World Series between the Texas Rangers and St. Louis Cardinals, coupled with the intense demand among networks for programing viewers watch live, should give MLB strong negotiating leverage in the next round of talks.

Ratings for this year’s World Series, broadcast on Fox, were hardly blockbuster but still averaged 16.6 million viewers, up about 19 percent from last year, driven by a Game Six extra-inning comeback victory for the Cardinals that stoked interest in the team’s Game 7 victory last week.

Analysts expect the price of a new deal to increase by 10 percent or more from the league’s current contracts, which are estimated to be worth around $900 million annually.

The interest in baseball in not due to the World Series alone, however, as advertisers exhibited a strong appetite for commercial time throughout baseball’s lengthy 182-game regular season and two rounds of league playoff series.

“No doubt baseball is going to be a product of interest,” said sports TV consultant Mike Tracer, a former NBC Sports vice president.

“If you are a rights holder, you want to get these negotiations done as early as you can — it would seem to be an advantage,” said Tracer. “The result is there is a lot of aggressive posturing right now between the networks.”

The ultimate price for the league’s new television contract depends in part on deals struck in other sports, most notably the National Football League.

The NFL, the most popular sport in terms of television ratings, also has contracts coming up for renewal, and recently won a 73 percent price hike from Walt Disney Co’s ESPN to extend a deal for “Monday Night Football,” the Pro Bowl and the NFL draft through 2021.

As for baseball, an ESPN representative said, “We have a 22-year relationship with Major League Baseball and look forward to continuing it.”

A representative for News Corp’s Fox said, “Fox Sports has had a mutually beneficial relationship with Major League Baseball both as a national and local rights holder for many years, and we plan to do our best to continue those relationships well into the future.”

The wildcard in the next round of talks is Comcast Corp., the new majority owner of NBC Universal. Comcast officials have made no secret of their desire to ramp up sports coverage, and a deal with baseball would allow the company to spread out games across the NBC Network, Versus, and even its cable outlets such as USA.

“We’re always interested in strong properties,” said an NBC Sports spokesman.

The caveat, however, is that “Sunday Night Football” is NBC’s highest rated program, and carrying the baseball playoffs or World Series would likely create a scheduling conflict. NBC also may not want to interrupt its fall programing as it tries to revive its prime-time schedule. Taken together, those two factors could limit how aggressively Comcast pursues a TV deal the with MLB.

CBS Corp, which declined to comment, could also jump into the fray. Some have speculated that it could partner with Time Warner Inc’s Turner Sports to make a joint bid for baseball — as it has done with the NCAA basketball championship — but sources familiar with the situation said that combination was highly unlikely.

The source said Turner is more likely to pursue a renewal of its TBS current deal, which gives it rights a Sunday game as well as the league playoffs, rather than trying to work out all new agreements with another network

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