This week, in what may be remembered as another pivotal regression in Major League Baseball’s retreat from the zeitgeist, ESPN chairman Jimmy Pitaro told the league that his network would be opting out of its annual $570 million contract at the end of this season. Before ESPN’s letter could even be FedExed to MLB headquarters in Midtown, commissioner Rob Manfred was trying to get ahead of the news and put his own spin on the ball. “We do not think it’s beneficial for us to accept a smaller deal to remain on a shrinking platform,” Manfred wrote in a memo to his owners that soon somehow made its way into the digital pages of The Athletic—thereby likely putting the final kiss-off on a relationship that has existed for three and a half decades. Manfred, a former labor lawyer who has been navigating the balkanized sports media landscape, wasn’t quite done. In the extraordinarily chummy and relationships-based world of sports media, he seemed intent on delivering the message that his league didn’t need Disney’s money and that, despite the cratering of the regional sports network industry, he had plenty of options. “Given that MLB provides strong viewership, valuable demographics, and the exclusive right to cover unique events like the Home Run Derby, ESPN’s demand to reduce rights fees is simply unacceptable. As a result, we have mutually agreed to terminate our agreement,” the league said in a statement. This framing was a source of great amusement for executives at both ESPN and rival media organizations—including current and possible future league partners—all of whom knew that it wasn’t quite so mutual. The seeds of the MLB-ESPN contretemps will be familiar to the readership of my partner John Ourand, who has been reporting on all this dialectic for years, but if not, a quick refresher… Baseball, a game popularized by radio and monetized through its tonnage, has been losing some of its media cachet for years amid the growth of the NFL, increase in televised college sports, ascent of the NBA, and proliferation of niche sports. To wit: A decade-plus ago, Manfred and Pitaro negotiated a $750 million a year, eight-year package that ran through 2021. In 2021, of course, they re-upped into the current $570 million per annum deal. (Yes, it’s $570 million, not $550 million). But then Manfred went and reset the market by striking substantially cheaper add-on deals, like licensing a package of Friday night games to Apple TV+ for $85 million, in 2022, and Sunday morning games to Roku for $10 million, in 2024. These may have been delightful incremental revenue plays, but they backfired. As The Athletic’s Andrew Marchand noted, the Roku deal is only netting each team $300,000, “which is less than half the minimum rookie salary of $760,000 for one player.” More importantly, measured against those deals, ESPN’s package—which includes Sunday Night Baseball, the wild card playoffs, and the Home Run Derby—seemed overpriced. ESPN prides itself on its fiscal responsibility, and has a sophisticated internal pricing model to gauge the estimated R.O.I. on live rights investments. (As do Amazon and Netflix and others…) Obviously, you can’t anticipate which teams will be hot during the course of an eight-year deal, or whether Shohei will suffer an injury, but there’s a lot they can anticipate about viewership totals and sell-through rates. As CNBC’s Alex Sherman noted on Ourand’s excellent podcast, The Varsity, ESPN ostensibly gets a higher R.O.I. from newfangled leagues, like TGL, than a banner product such as Sunday Night Baseball. In any case, they never actually ran the numbers on this because Manfred made it clear from the outset that he wasn’t willing to entertain any offer below the existing rate. But, having surveyed several media executives with a vested interest in that answer, it seems likely the true value is probably a little more than half of what ESPN is currently paying—yes, the MLB deal was worth a pair of NFL playoff or Christmas Day games. And, of course, any new deal would need to include the sorts of local packages that provide the tonnage that matters most on streaming.

Sure, everyone will take a look at the MLB package, but there will only be a few serious suitors. The league’s other current broadcast partners, Turner and Fox, probably aren’t incentivized to add more baseball to their inventory, given that it won’t bring in any additional affiliate revenue and they’re already calling on these same advertisers. Anyway, their packages expire in a few years and they can renegotiate then. Will David Ellison and Jeff Shell kick the tires once CBS is under their control? Probably, but not at the prices Manfred wants. NBC? Maybe, especially since the network already has a lock on Sunday nights via the NFL and its new NBA deal. That leaves Apple, which has Fridays, and Amazon, which already has a toehold in local baseball rights and could conceivably want to add a national game to the package. Yes, they’ve got deep pockets, but they’re also very pragmatic. Would the MLB try to work out goldilocks deals with a number of these partners, as NASCAR is currently doing, and hope to stairstep its way to a larger overall number? Perhaps that’s the ace up Manfred’s sleeve. In any event, let’s say one of those media partners does come in with a slightly better offer than the roughly $300 million ESPN probably would have been willing to pay for this. Would it be worth it? As ESPN struggles to compete with the streamers, the business has sought to convince the leagues that it can deliver an added value its competitors cannot: It is a 24/7, multichannel, multiplatform sports network, and thus a near-constant marketing vehicle for its partners. A tech firm might be willing to pay a little more—we’ll see—but when was the last time you noticed an ambitious marketing campaign for Apple TV+’s Friday Night Baseball, or saw a Scott Van Pelt type reviewing highlights from around the league on the platform? Manfred’s new challenge will be stewarding the league toward something that better serves the consumer. After all, baseball’s true existential challenge, beyond the collective second-screen ADHD of modern society, is that, while the NFL and the NBA have gone national, baseball is still fundamentally a local game. Americans will watch almost any Sunday Night Football game, but most Yankees fans and Red Sox fans and Astros fans (and, and, and…) don’t really give a fig about a Cardinals-Diamondbacks game on a Sunday night in July. The 162-game schedule also renders any single contest inconsequential, alas, no matter the hype. As the games of any given team spread out across more and more channels and streamers, and became harder to find, ESPN at least provided the league’s fans with some semblance of a home base. In the end, though, Manfred had an impossible choice. Caving to ESPN would have permanently and fundamentally reset the league’s market in advance of the coming Fox and WBD renegotiations—nasty math that would have infuriated his owners and players alike. Forgoing ESPN, on the other hand, may have put his game further out in the wilderness. And yet, there’s plenty of reason to believe that Manfred can pull himself out of this jam. Indeed, this is a guy who has introduced all sorts of unwelcome innovations into the game—the pitch clock, the new pick-off rules, expedited extra innings, and is even testing robo-umps in the minor leagues—without wilting. In the process, he’s proved willing and able to defy Major League Baseball’s precious history. Now he’s got to fight for its economic future.