MLB Strikes Out With ESPN

Major League Baseball is grappling with a crisis in national and local sports media rights that could significantly alter how the game is consumed and potentially create major challenges when the league’s collective bargaining agreement with the players expires in December 2026.

ESPN has notified MLB that it was opting out of the final three years of its $550 million-per-season contract after this year. MLB managed to frame the opt-out as a mutual decision, but it’s hard to believe the league wouldn’t still welcome ESPN’s $550 million annual deposit if it kept coming.

Commissioner Rob Manfred and his deputy, Noah Garden, have so diminished the value of MLB’s national regular-season product through various streaming deals that ESPN felt compelled to push back against the $550 million rights fee.

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

While it’d be nice to give MLB the benefit of the doubt, it’s tough to believe they have better options lined up. They certainly need one, according to The Wall Street Journal.

MLB has already cycled through a series of national regular-season experiments with partners like Facebook, Twitter (now X), YouTube, Peacock, Apple, and Roku.

In baseball terms, MLB has struck out on every one of these deals. The first four weren’t renewed, and the last two—Apple and Roku, paying a combined $100 million for regular-season games—further eroded the sport’s financial market, contributing to the current ESPN predicament.

Manfred, ever the tough negotiator, threw a sharp warning in a memo to his teams about the ESPN decision, as reported 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 bold statement, though the memo could’ve leaned harder into teenage melodrama: “You’re dumping me? Fine, I’m dumping you first!”

Baseball is already wrestling with the consequences of a fast-evolving consumer and tech landscape that’s dismantling its traditional economic framework. In the existing setup, the league sells national broadcast rights for regular-season and playoff games—such as the package ESPN is walking away from—and splits the proceeds among all 30 teams.

Meanwhile, individual teams strike their own deals with local regional sports networks (RSNs) and pocket that revenue themselves. Local media accounts for about 25% of team revenues on average, a far higher share than any other major U.S. sport.

But the RSN model, which carries most games, is crumbling in some markets, slashing income for small-market clubs just as big-market giants like the Los Angeles Dodgers haul in massive paydays from their local TV contracts. This growing disparity is undermining the ability of all but the wealthiest teams to compete for top talent.

Now, ESPN’s exit after a 35-year partnership with MLB pours fuel on the fire. The league must scramble to secure a new national broadcast partner—or partners—for the 2026 to 2028 seasons, all while Manfred pushes forward with a bold, intricate plan to revamp baseball’s long-term TV strategy.