In the latest interactive monthly data report, SportBusiness Media analyses the media-rights landscape of Major League Baseball.
Further detail on the deals covered in this interactive data report is available with our Rights Tracker tool – click here for more information.
MLB within the baseball industry
The MLB is the fourth-most valuable sports property globally, with media-rights revenues amounting to nearly $3.6bn (€2.9bn) in 2019, according to the SportBusiness Consulting Global Report. MLB generates almost 97 per cent of the media-rights revenue for the whole sport of baseball, which accounts for approximately 7.5 per cent of the global media-rights market. The rest of the sport’s media revenues are either generated by the local leagues of the countries where the sport is extremely popular, including Japan and Korea, or by World Baseball Softball Confederation events.
MLB media revenues are almost equally split between national deals, negotiated by the league itself, and local deals, which are negotiated and collected by individual teams. International deals account for a very small percentage of the total revenues, estimated at around $110m in 2019.
Media-rights revenues for MLB have had a slow compound annual growth rate of about 3.3 per cent from 2014 to 2019, due to the long nature of the league’s domestic agreements and the teams’ regional deals. This has been the lowest CAGR over the past five years among the top four American leagues (NFL, NBA, MLB and NHL) and the second lowest among the top 10 sports properties globally.
With no new major domestic agreements set to come to market until the end of 2021, the value of MLB domestic rights is set to remain relatively flat in the next two years. However, in 2022, the league expects a major uplift in value. Moreover, international rights values could change in the upcoming years as a consequence of incoming renewals in markets like the DACH region (Germany, Austria and Switzerland), China, and MLB’s most profitable international market, Japan.
Strong domestic market
The MLB earns approximately half of its media revenue from its domestic agreements with Fox, ESPN and Turner, which all began in 2014.
Its biggest deal, worth about $700m per season, is with sports broadcaster ESPN for rights to 90 regular season games, wild-card games and highlights until 2021. The deal guaranteed MLB a 136-per-cent increase on its previous deal with the broadcaster, worth $296m per season for eight years.
The MLB second-biggest package deal, which includes 52 regular-season games, the All-Star Game and the season-ending World Series, is with US network Fox, in a deal from 2014 to 2021 that is worth about $525m per year. This was a 103-per-cent increase on its existing deal with the broadcaster, worth about $257m per season.
The league announced in 2018 a new deal from 2021 to 2028 with Fox expanding its television, digital and Spanish-language rights. The deal is worth about $714m per season.
The MLB’s other major domestic deal is with media group Turner, which acquired MLB rights until 2021 to one league championship series, two division series and one wild card game. The deal is worth about $325m per season and represents a 119-per-cent increase on the broadcasters previous deal that ended in 2013, worth about $148m per year.
MLB agreed another important domestic deal in 2018 with streaming service platform DAZN, worth $100m per season from 2019 to 2021. This deal was a significant acquisition for DAZN, marking its first entry into the US major league sport market. The streaming service created a live digital show every MLB weeknight, switching between games at key moments in an offering similar to the RedZone service provided by the NFL.
In terms of viewership, the league reported that the 2019 regular season achieved an 8-per-cent year-on-year increase in audience on Fox. This was the highest average for that rights package since 2012. Viewership also increased on ESPN, with a 2-per-cent increase compared to 2018.
However, the 2019 World Series seven games between the Washington Nationals and the Houston Astros were watched by an average of 13.91 million viewers, making it the lowest result for a World Series since 2014.
Multitude of regional deals
Unlike other US major leagues, MLB generates more than half of its media-rights revenue from regional deals, negotiated by the teams themselves with regional or local broadcasters operating in their market designated areas. These deals are on average 20 years long and many of them include team ownership stakes in the regional broadcaster as part of the deals.
SportBusiness Consulting estimates that regional deals are worth a combined $1.8bn, the largest proportion of MLB’s total value in 2019. Teams in extremely populated areas like the Los Angeles Dodgers, the New York Yankees and the Philadelphia Phillies are among those that earn the most from their regional sports network deals. MLB generates the largest amount of revenue from regional deals among the major leagues, 77-per-cent more than the NBA and three times the level of the NHL.
In 2019, Sinclair Broadcast Group acquired 21 regional sports networks from Disney in a deal worth $10.6bn. The acquisition allowed Sinclair to become a major player in the US sports broadcasting industry, acquiring the linear and streaming media rights to 14 MLB teams, 16 NBA teams and 12 NHL teams.
Among the 30 MLB teams, three teams renewed their regional deals in 2019: the Colorado Rockies, the Pittsburgh Pirates and the Kansas City Royals. The Chicago Cubs decided to join the roster of MLB teams moving their games to cable television and announced the launch of its own regional sports network together with Sinclair Broadcast Group, called Marquee Sports Network, starting from the 2020 regular season.
Slow growth of international media rights
The MLB’s international rights only contribute about three per cent to the total MLB media-rights value.
The most valuable market for the league is Japan, in which it agreed a four-year distribution deal with Dentsu in Japan, from 2016 to 2020, worth about $66m per season. Dentsu is the longest-standing MLB international media partner, with an ongoing relationship since 1990. Dentsu sublicensed non-exclusive digital rights to DAZN in a deal worth about $4m per season until the end of the 2019 regular season.
In Canada, telco Rogers Communications and pay-television sports broadcaster TSN agreed to deals from 2014 to 2021 to show different packages of MLB rights. TSN broadcasts the games on the Sunday Night Baseball, Monday Night Baseball and Wednesday Night Baseball shows. Rogers agreed to show more than 240 regular-season games per year plus the All-Star Game, the Home Run Derby and the post-season play-offs featuring the World Series.
In China, MLB was able to secure an uplift in the value of its media rights despite the early termination of its deal with LeSports. In 2018, the league signed a deal with streaming platform Tencent until 2020 worth about $5m, registering a 11-per-cent increase on its previous deal with LeSports.
Along with the other US major leagues, MLB has tried in recent years to expand its international visibility by taking advantage of the popularity of the sport in some selected markets. In 2019, MLB played eight regular-season games outside of the US and Canada and introduced for the first time in its history a series of two games played in the United Kingdom. One of the two games drew 59,659 attendants, making it the most-attended MLB international game ever and the most-attended MLB game of any type since 2003.
Given the popularity of the sport in the UK, pay-television broadcaster BT Sport renewed its deal for Major League Baseball rights until the end of 2021, while public-service broadcaster the BBC acquired rights to MLB London Series for 2019 and 2020, allowing MLB to increase international visibility.
New ways to attract younger viewership
Although MLB maintains a dominant position in the sports media market, the league is looking for new ways to attract younger viewers.
MLB has adopted new ways to distribute its product to younger generations through targeted media partnerships. In 2016, the league agreed a deal with Twitter until 2018 that allowed the social network to live stream one day game per week non exclusively in the US.
Similarly, Facebook also struck a deal with MLB to show between 20 and 25 games per season in 2017 and 2018. The deal in 2018 was worth about $30m and allowed MLB to receive about 123 million views through the MLB Live page. The partnership was renewed in 2019, although the social media company obtained a smaller line-up of live games.
As part of MLB’s revised interactive media-rights strategy, certain in-market digital rights have returned to the clubs, which will be able to leverage these new rights within their Market Designated Areas and allow more fans to watch their teams’ games digitally.
Thus, with the new rights cycle ending in 2021 and following the agreement with DAZN, there is an opportunity for MLB to stay ahead of the digital and streaming curve and adopt different solutions that would allow younger generations to get closer to the league and consume more product.