Let's go back to January 5, 1989, the first time when Major League Baseball signed a $400 million deal with ESPN. In 1996, ESPN renewed a five-year contract with Major League Baseball worth $440 million and about $80 million per year. In 2001, the new contract were worth $141.8 million per year and $851 million overall. ESPN, then the current rights holder, signed an eight-year contract with Major League Baseball, ESPN will pay baseball $273.5 million in 2006, $293.5 million in each of the following four years, $308.5 million in 2011 and $306 million in each of the final two seasons.
Then, on August 28,2012, MLB and ESPN agreed on new eight-year contract worth 5.6 billion dollars. It is 700 million per year. What is the difference lead to huge raise about Major League Baseball broadcasting rights?
After checking the new agreement, I found that this new agreement covers TV and radio rights to MLB programming both in the U.S. and internationally. In addition, ESPN MLB game telecasts and other baseball programming will be available on ESPN3.com and the Watch ESPN app.
The pictures show the materials we can watch on the website and app in the smartphone.
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Eight years ago, Mark Zuckerberg just founded Facebook for one year. Now, MLB can charge an increase of 100 percent to 700 million dollars per year over its current deal with ESPN. The internet and mobile platform changes the value of sports media business. Moreover, in the past several years, ESPN gradually becomes the most valuable company in Disney Group.
According to the report from Kurt Badenhausen's article from Forbes, ESPN is worth 40 billion dollars in 2012. Moreover, in another article from Forbes, ESPN is the factor to keep Disney's stock price go up. Therefore, I believe that this new contract between MLB and ESPN would be only a new start of sports media business and it will last for a long time to change the whole industry.
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