Marchand: With ESPN opt-out, MLB commissioner Rob Manfred creates another TV mess

Either Major League Baseball commissioner Rob Manfred has close to a $550 million per year alternative to ESPN or he has committed sports business malpractice.

On Thursday morning, ESPN informed MLB it was opting out of the final three years of its $550 million per season contract with baseball after this year. MLB did a fine job of presenting the opt-out as mutual, though something tells me ESPN would still be just fine for the league if the direct deposit for $550 million kept clearing.

Because Manfred and his right-hand man, Noah Garden, have devalued MLB’s national regular-season product to such a degree with streaming deals, ESPN had no choice but to attempt to reduce its $550 million rights fee.

“It would be fiscally irresponsible to not opt-out,” a rival network executive told The Athletic.

While we would love to give MLB the benefit of the doubt, it is hard to bet it has superior alternatives. It definitely needs one.

MLB has already tried national regular-season experiment after experiment with new partners, from Facebook to Twitter (now X) to YouTube to Peacock to Apple to Roku.

To borrow baseball vernacular, MLB has gone hitless on all these deals. The first four were not renewed, while the last two depressed the financial market for the sport, helping to place it in this ESPN conundrum. Apple and Roku are paying $100 million combined for regular-season games.

The sport is facing a national and local sports media rights crisis that could have major ramifications in how the game is consumed and very possibly lead to huge headaches when the league’s collective bargaining agreement with the players is up in December 2026.

Maybe Amazon Prime Video or Apple or another network is ready to take baseball in — Manfred said MLB has “two potential options” — but, even if the money is there, none of these places are proven with national regular-season games.

Manfred, a hard-nosed negotiator through and through, did fire a sharp brushback pitch as he informed his teams of the ESPN news in a memo obtained by The Athletic’s Evan Drellich.

“We do not think it’s beneficial for us to accept a smaller deal to remain on a shrinking platform,” Manfred wrote.

It was a strong line, though Manfred’s memo could have been a little more teenage angsty: “You are breaking up with me? Well, I’m breaking up with you!”

While the actual split on Thursday sent shockwaves through baseball and sports media, no one should be surprised, since this likelihood had been reported since 2023.

It has only become starker with MLB’s deals with Apple TV+ and Roku. Apple TV+ has Friday night exclusive regular-season doubleheaders, which it pays $90 million per season to stream. Roku has a Sunday morning package of games, for which it doles out a still-incredible-to-believe $10 million a year.

(To give perspective on how shortsighted MLB’s Roku agreement is, each team nets $300,000 from that contract, which is less than half the minimum rookie salary of $760,000 for one player.)

ESPN’s set of games is better than Apple’s or Roku’s. But five times? Or 55 times? ESPN has exclusive “Sunday Night Baseball” and the first round of the playoffs. The four best-of-three series have rarely gone to a decisive third game. So ESPN’s inventory includes a minimum of eight playoff games each year, with a chance for 12.

The opt-out gave ESPN chairman James Pitaro the save opportunity, but, even on this, MLB should look in the mirror again. The opt-out means MLB likely has put itself in position to negotiate a new three-year deal, which is undesirable to platforms.

Networks and streamers want longer deals, but MLB’s other contracts — with Fox, which has the World Series in its approximately $729 million per year deal and with TBS for $470 million for top playoff games — are up in 2028. MLB will want to go to market with all its inventory then.

MLB has looked for alternative distribution channels for its games, including a deal with Apple TV+. (Luke Hales / Getty Images)

It is hard to figure out the vision for baseball. The Apple and Roku deals not only reset the regular-season national game market, but they also depressed the sponsorship environment, according to sources from network partners. The lesser deals for Roku and Apple make it harder for Fox, TBS and ESPN to sell ads during the regular season.

MLB does have a compelling product to shop. Manfred has done a fine job in recent years, especially with the pitch clock. He has made the average regular-season game time manageable. Most stadiums are filled up for 162 dates, which is quite a feat.

However, there are more storms coming. When Manfred took his dig at ESPN in his memo to owners, it was in regard to the “shrinking” number of cable subscribers. There are fewer homes with cable, and this is hitting MLB maybe more succinctly than any other league.

Teams, especially smaller markets, are losing tens of millions of dollars because the regional sports market is cratering. MLB needs to figure out alternatives to keep fans watching and paying.

ESPN will launch a direct-to-consumer platform this summer, meaning viewers won’t be required to have a cable package to see all its programming. The Athletic previously reported that it is expected to cost $25 to $30 per month.

Pitaro has stated publicly that he wants to be part of the solution to MLB’s local rights dilemma. MLB is not going to find a more willing partner who believes in the game. Pitaro is such a huge Yankees fan he named one of his dogs Pags after 1980s third baseman Mike Pagliarulo.

Maybe ESPN, Amazon or someone can find the right model to digitally solve the RSN issue. That’s where the conversations should be headed, and the owners shouldn’t be looking for the largest check but the best distribution channels, as you don’t want to get lost, like MLS with its exclusive Apple deal.

At the moment, ESPN may have the greatest portfolio of rights in sports history. It has Super Bowls, college football championships, NBA Finals, Stanley Cups and the list goes on and on.

MLB can complain about ESPN’s lack of baseball coverage, which Manfred did in his memo, or its “shrinking platform,” but this is about money. If ESPN was willing to continue paying $550 million, there would be no grievances.

Maybe Manfred will find the dollars someplace else. Amazon, Apple, Netflix and Google YouTube have endless money. Perhaps they will have interest in national, mostly regular-season baseball games.

Those could be new experiments. Maybe one of them finally works.

(Top photo: Kevork Djansezian / Getty Images)