A new, more fiscally conservative era has dawned under ESPN’s Jimmy Pitaro. Sure, he agreed to dig deep to pay the NFL $2.7 billion, the NBA $2.6 billion, and the CFP $1.3 billion (and that’s just the annual cost of those gargantuan media rights deals). But Pitaro has also passed on rights when he couldn’t make the numbers work, unsentimentally ending the network’s relationship with MLS after nearly 30 years and deciding against a deal for Pac-12 rights despite ESPN’s big investment in college sports. He recently told F1 executives that ESPN wouldn’t renew their $90 million U.S. rights deal, either, after the racing circuit asked for more money. (F1 executives have started talking to Netflix and NBC, among others, instead.) Alas, as I’ve previously reported, ESPN’s belt-tightening has put Pitaro in an awkward spot with Major League Baseball. Under commissioner Rob Manfred, the league has instituted a pitch clock, banned the defensive shift, and pushed through other rule changes that have boosted viewership and attendance. People are feeling good about the sport again. Manfred, from his conversations with other media executives, believes the league’s media rights will get a lot of interest when they come up. Judging by what I’m hearing inside both ESPN and MLB, that may be a lot sooner than expected. ESPN executives have told MLB that as early as next month, the network is likely to exercise an out clause in its contract to try and negotiate a better deal. MLB, for its part, has made it clear that it would respond by shopping the package to other partners. (Either way, any changes would take effect starting in the 2026 season.) The two sides are so far apart right now that it’s hard to see a middle ground. ESPN pays around $500 million for its MLB rights, which include Sunday Night Baseball, the Home Run Derby, the Wild Card Series, and assorted digital and highlight rights. That’s comparable to MLB’s other big broadcast deals with Fox, which pays $730 million per year, and Warner Bros. Discovery, which pays $535 million. But Bristol is more interested in other media rights comps that MLB cut more recently. To wit: Three years ago, Apple secured a package of Friday night games for just $75 million per year. And last year, Roku spent just $10 million for its package of Sunday morning games. It’s a tricky situation all around. ESPN is arguing that MLB reset the market with these streaming deals, and it wants to move well below $500 million annually. MLB counters that the Apple and Roku packages aren’t in the same ballpark in terms of quality. In fact, MLB created those packages from rights that ESPN passed on. Anyway, there’s no hostility on either side, I’m told—Pitaro remains a die-hard Yankees fan. But MLB has begun talking with other mediacos, including Netflix and Amazon, to gauge their interest in taking over ESPN’s rights if things go south. Those talks have mainly focused on 2028, which is when all of the league’s media deals are up, but the conversations have naturally and informally turned to ESPN’s rights package, which could be available as soon as next year.

Perhaps the main reason why MLB isn’t likely to retrade ESPN’s deal comes down to the simple fact that ESPN already dropped its annual payout to them, by more than $200 million, during their last round of negotiations. Manfred would have a hard time selling his owners on any scenario in which ESPN dropped its rights fee again… especially after they watched the company back up the Brink’s truck for the NFL, NBA, and CFP. Some have suggested that MLB would rather let ESPN walk than take less money for a second time in a row, particularly as it heads into the 2028 negotiating cycle. In a report yesterday, LightShed analyst Rich Greenfield wrote that “if [ESPN opts] out, we believe MLB will seek a deal with another distributor that accomplishes other strategic objectives, even if it means less total dollars than the current package or the inclusion of additional rights beyond what ESPN has today.” Those “strategic objectives” refer primarily to MLB’s potential future on streaming, where the sport could find a much larger potential audience than it has now on cable. The popularity of MLB’s international players, in particular, could be a draw for global streaming companies like Netflix, which has plenty of room to grow in Asia. Japanese viewership for last year’s World Series, won by Shohei Ohtani’s Dodgers, eclipsed 12 million viewers and set records, even though the games were broadcast in the morning. The World Series even topped the average of the five most-watched Paris Olympic viewership windows in the country. Ultimately, Greenfield believes that ESPN should not exercise the out in its MLB contract, especially considering its planned launch of a direct-to-consumer service—dubbed Flagship—this fall. ESPN’s streamer will need year-round programming, and “without Sunday Night Baseball and the Home Run Derby,” Greenfield wrote, “ESPN’s summer programming would be underwhelming.”

On Fox’s Bourbon Street set: “As a native New Orleanian and resident, I was curious about one aspect of Fox’s pregame coverage. This year, they had their entire set on Bourbon Street. This struck me as unique. In past years, most broadcasters have had their main sets in Jackson Square. Do you know if Fox had always planned to have their sets on Bourbon Street for this Super Bowl? Or was this a change in response to the terror attack?” —A Varsity subscriber [Ed note: I reached out to Fox Sports and learned that network executives planned to produce the pregame show on Bourbon Street all along. Lady Gaga’s performance, though, was added in response to the terrorist attack on January 1. This is believed to be the first time Bourbon Street has ever been shut down for a Super Bowl pregame show.] On Hubie Brown: “A personal Hubie story for you: I was born in Philly but my family moved around a couple times. When I was around 9 years old, I was living in Louisville and we went back to Philly over the holidays to visit family. When we went to fly back, my dad looked over and noticed Hubie Brown was sitting there at the Philly airport. My third grade class had given us a winter break assignment to prepare a speech on any topic we wanted and I had chosen Wilt Chamberlain. So at the airport my mom and I walked up to Hubie and asked him about Wilt. He spoke to us for a good 10 or so minutes, giving nothing but praise for Wilt (he must be a Wilt > Russell guy because it all felt genuine). After I gave that speech, my mom had to confirm to the teacher that we had actually met Hubie Brown and I wasn’t just making up these very complimentary Hubie quotes about Wilt. I like to think of it as the best speech ever given by an elementary student, but I may be biased. It was at least probably better than whatever incoherent monologue Marchand could have managed.” —A Varsity subscriber

Have a great weekend, John