CNBC Sport: MLB’s playbook to grow media revenue

Published Thu, Mar 27 202510:00 AM EDT

Alex Sherman @in/alex-sherman @sherman4949

Key Points

MLB is working toward a new media rights agreement after ESPN walked away from its "Sunday Night Baseball" package.
While carving up the rights is an option, MLB may be content to keep the package together if it can broaden exposure for the league – potentially through a broadcast network.
MLB Commissioner Rob Manfred may agree to take a smaller package for the next three seasons if he can cash in when all of the league's major media rights expire after the '28 season.

A version of this article first appeared in the CNBC Sport newsletter with Alex Sherman, which brings you the biggest news and exclusive interviews from the worlds of sports business and media. Sign up to receive future editions, straight to your inbox. Happy Major League Baseball Opening Day! A few weeks ago in this newsletter, I discussed how MLB may want to carve up its ESPN "Sunday Night Baseball" rights package to maximize value for new bidders. At the time, I highlighted a quote from Fanatics CEO Michael Rubin : "Do I think baseball will get more for their media rights than what ESPN walked away from? I think the answer is yes," Rubin said on CNBC's "Squawk Box." "A lot of times you have one person that says 'this isn't worth that,' and then two streamers show up and pay three times that." I've since confirmed that while carving up the rights is an option, MLB may be content to keep the package together if it can broaden exposure for the league – potentially through a broadcast network. Both NBC and Fox have publicly confirmed interest in "Sunday Night Baseball." NBC, in particular, could make sense as a landing spot for the league because it already has "Sunday Night Football" and will have "Sunday Night Basketball" when it gets NBA rights next season. Adding "Sunday Night Baseball" during the summer would give the broadcast network (and its streaming service Peacock) a clear sports branding advantage over the competition. But if NBC lands the "Sunday Night Baseball" package, it's not going to pay the $550 million a year ESPN was shelling out for it, according to people familiar with the matter. And that may be OK with MLB, because the package is a short-term, three-year deal. Taking less money for 2026, 2027 and 2028 may be sellable to owners across the league if MLB Commissioner Rob Manfred can cash in when all of the league's major media rights expire after the '28 season. Here's what MLB received in media revenue last year on a network by network basis, according to sources familiar with the matter: The yearly figures aren't the same as average figures. So, while ESPN is paying an average of $550 million per season for its package, it only paid $502 million in 2024, according to the people. ESPN also pays for an ESPN+ non-exclusive game package, which isn't included in the total. 2028 will be the ultimate test for Manfred. He thinks he can slice and dice baseball's video rights to generate a big revenue increase for the league, following in the footsteps of the NFL and the NBA, according to people familiar with his thinking. His major leverage will be taking back local rights from the regional sports networks and selling those games as a new package, likely through an existing media player. In theory, this type of package may be appealing to Apple, which has proven not to be a fit as a media partner for the NFL and NBA given its minimal reach and desire for control. Apple's Major League Soccer deal gives the company total control of all of the league's streaming inventory. MLB wants to offer a national package of local games, potentially giving a media partner the ability to sell them in a more flexible way. There are no concrete details, because we're still years away, but the conceit is that removing local blackout rules by selling a huge swath of local games to a streamer could bring in big bucks for the league. And because the games are local and not national, reach isn't as important as flexible accessibility. ESPN, Amazon and Peacock would be other logical partners for a local streaming MLB deal after 2028. The league will have to convince team owners this is a better strategy than moving forward with RSNs. But I'm told Manfred is confident there will be general consensus by 2028 that the cable-bound RSN model and super-expensive team-by-team streaming services (typically $20 to $30 per month) that exist today will be anachronistic. An MLB spokesman declined to comment. If Manfred wants a big boost in media revenue, he probably can't rely on his existing partners to simply pay more for their existing games. ESPN's refusal to pay $550 million per year may suggest that Fox and Turner will be unwilling to shoulder major increases for their packages when they're up for renewal. MLB already trashed the traditional model – of which Fox and Turner play a major part – when it referred to ESPN as a "shrinking platform" in a memo from Manfred, first obtained by The Athletic. The platform is contracting because cable subscribers are canceling service by the millions each year. This affects Turner as much as it does ESPN. Fox is a broadcast network, but most of its eyeballs come from traditional pay TV. As Rubin said, even if the legacy media companies don't pay big increases on their current deals, it's possible MLB will find a cadre of big tech streamers (YouTube, Netflix, Amazon, Apple) to keep media revenue surging, a la the NBA and the NFL, which both scored significant increases in their latest long-term deals. But there's also a world where MLB's media rights look more like what we've seen in Europe. "Gravity takes hold on everything," said Kevin Mayer , Disney's former head of streaming and this week's "On The Record" guest. "At some point, these rights cannot continue to grow at this pace, two to three times every 10 years." The English Premier League — the gold standard of soccer — took a revenue hit in its most recent TV deal, signed in December 2023. The four-year deal is valued at £1.68 billion (about $2.17 billion) per season. That's slightly less than the £1.71 billion ($2.22 billion) the league took in from 2016 to 2019. Mayer pointed out the same thing happened for Italy's Serie A, which he purchased the rights for when he served as chairman at DAZN Group. DAZN and Sky Italia paid about €900 million per season in 2023, down from the €930 million they'd previously paid. Baseball has a bigger demographic problem than the NBA and NFL. Its median viewer is 60 years old, compared to the NBA's 50 or the NFL's 54, according to data provided by TGL. Moving a lot of the games to a subscription streaming service may have two problems. Older people who still rely on cable may not sign up for technology reasons, and cash-conscious younger people may not want to subscribe because they're, well, not that interested. "There is precedent in real markets with really big sports properties where they decrease," Mayer said. "Baseball is not going to 3x. To which Mayer added, "Who knows? Maybe they will." On the record With Candle Media co-CEO Kevin Mayer ... As I mentioned, Kevin Mayer is this week's "On the Record" guest. Mayer's list of recent titles is exhausting. He is currently co-CEO and founder of Candle Media, the privately-held owner of Moonbug (creator of CocoMelon) and Reese Witherspoon 's Hello Sunshine, among other media and entertainment properties. He's also the co-founder and managing director of venture firm Smash Capital, which has recently made headlines for its involvement in "Project Rudy," a plan with aspirations to transform the landscape of college football. Not that much is known about "Project Rudy" – Yahoo Sports has written the most in depth piece on the idea in a story published in October – but Mayer did confirm some details and clarified others. The idea is to infuse private capital into college football without eliminating conferences. He confirmed Project Rudy was "focused" on the Power 4 conferences (ACC, Big 12, Big Ten and SEC) but said it would also provide capital for the Group of Five ( American Athletic Conference , Conference USA , Mid-American Conference , Mountain West Conference , and Sun Belt Conference ) and FCS (formerly known as Division I-AA). "What college sports needs is responsible capital to keep it as is, to keep the train running, to keep college sports being dynamic and profitable," Mayer said. "We really want to just pick off some low hanging fruit, to bring capital in, to help with some scheduling optimization, and to help with some media rights negotiation optimization. We want to preserve as much as we possibly can, which is most everything – those conferences and the Power 4. There's a lot of history there, there's branding there, there's loyalty. There's a lot of reasons to keep conferences, and we don't think we should blow them up at all." Mayer said there's general agreement at the school level and the NCAA level that "things need to change" given the new obligations schools have toward paying players. "We think that just throwing money at the problem without trying to optimize the underlying opportunity is a mistake," said Mayer. "So we want to really take that opportunity, optimize it, bring capital in, but then have a very rational business that actually provides capital to the college." There's a lot more in our interview, including his thoughts on whether Disney should spin off ESPN. You can watch here, or listen to it here and follow the CNBC Sport podcast if you prefer the audio version. Watch the full interview and follow and listen to the new CNBC Sport podcast. CNBC Sport highlight reel The best of CNBC Sport from the past week: CNBC Sport scoop: Comcast subscribers who are Cubs and Yankees fans may soon be in for a rude awakening. Both the YES Network and the Marquee Sports Network are in danger of losing carriage at midnight Friday, although sources say a deal with Marquee is likely to happen. Sinclair Broadcast Group handles the distribution for both networks, and Comcast's deal with Sinclair is up. Comcast has been aggressively tiering RSNs, removing them from the standard cable bundle. YES Network isn't too keen on this idea, noting that SNY (the Mets RSN, of which Comcast is a part owner) remains on basic cable. YES is available direct-to-consumer, and so is SNY as of this season. It's possible Comcast reaches a deal with all of Sinclair Broadcast Group, including Marquee, but not YES Network. Spokespeople from Comcast and Sinclair declined to comment. A spokesperson for YES said in a statement, "We agree with the elected officials. We just want to get Comcast back to the table and negotiate in good faith. We are not going to turn off our signal, and we hope that Comcast will not take us off its lineup." Stay tuned on this one, as these carriage battles often get resolved at the 11th hour. And since the deadline is midnight, no matter what happens, you'll be able to watch today's games! CNBC Sport is hard at work on our Steph Curry production – a deep dive into the business and brand of Curry – with a release date TBD. In the meantime, Curry is adding to his growing portfolio. He's teamed up with Michelle Obama to launch a new sports drink called Plezi. It will come in three flavors and be available nationwide on Amazon and in select grocery stores. CNBC's Jess Golden has the details. CNBC Sport is coming to Tampa, Florida on April 5! We are bringing together some big-name players at an invitation-only event on Saturday at the site of the 2025 NCAA Women's Basketball Final Four. If you're interested in attending, please request an invitation here . The big number: 60 The Oklahoma City Thunder this week became the first NBA team to reach 60 wins. The Thunder lead the NBA's Western Conference, and the Cleveland Cavaliers will almost certainly be the second team to reach 60 wins as the leader of the Eastern Conference. This sets up an unusual situation for the NBA, where I think it's safe to say that league and media executives do not want the top seeds to advance to the finals. Yes, both teams have exciting young players, but given the smaller market sizes of Oklahoma City and Cleveland, you know the dream is to have the Boston Celtics, New York Knicks, Los Angeles Lakers or Golden State Warriors make a run and advance. The NBA playoffs begin April 19. Quote of the week "I'm very optimistic about ESPN and Major League Baseball's future." — ESPN "Sunday Night Baseball" announcer Karl Ravech told Sports Business Journal this week he still believes his network can reach a deal with MLB. Well, I have some bad news for Ravech. Sources tell me there has been no contact between the sides since ESPN opted out, and there are no talks scheduled. It sure sounds like MLB plans to move forward with a new partner. Perhaps ESPN will get back involved after 2028 when local rights are part of negotiations, but at this point, I don't see any evidence a reconciliation is going to happen on the "Sunday Night Baseball" package. Around the league If you think the Los Angeles Dodgers are going to repeat as World Series champions this year, you're not alone. The Dodgers have commanded more than 37% of the total betting volume on BetMGM to win the 2025 World Series. That shatters the previous pre-season record set by the 2022 New York Mets. The Mets won the World Series that year, right? I won't bother checking and assume they did. The NBA will "report on its exploration of a new men's basketball league in Europe, in partnership with FIBA" at this week's NBA Board of Governors meeting, spokesman Mike Bass told CNBC Sport this week. League owners are exploring a league with eight to 10 franchises, Sportico reports . Former Houston Texans star JJ Watt , who last year joined CBS Sports as a studio analyst, will move to the booth this coming season as play-by-play announcer Ian Eagle 's color commentator. The duo will form the network's No. 2 broadcasting team behind Jim Nantz and Tony Romo . Amazon's Wondery has struck a deal with LeBron James ' digital series "Mind The Game." James debuted his series talking basketball with JJ Redick , who parlayed his podcasting into a head coaching job with the Los Angeles Lakers. In its second season, James will host alongside NBA Hall of Famer and former Brooklyn Nets head coach Steve Nash . Put in your bets now for what NBA team will hire Nash next. A new ESPN production, produced by Peyton Manning's Omaha Productions and in partnership with WWE, has landed on ESPN+ this week – a 10-episode series following Vince McMahon 's daughter, Stephanie McMahon , and her husband Paul "Triple H" Levesque . Boston's new National Women's Soccer League franchise has a new name : Boston Legacy Football Club. The team will begin playing in 2026.