Renewing sports broadcasting deals with Major League Baseball, NASCAR and other entities is getting more expensive for ESPN. With ad revenue down, that could put the cable network in a bind and
have repercussions for parent company Disney.
ESPN spends about $2.2 billion annually for broadcast rights to major sports in U.S., including $300 million for 80 Major League Baseball
games, $270 million for the final 17 NASCAR races and $1.1 billion for the National Football League's Monday Night Football. ESPN's NFL payments nearly doubled during the last round of negotiations,
and each of its other major rights fees rose by at least 20%. "You have increasing competition for a finite set of sports properties, and that is going to squeeze margins," says Lee Berke, sports
media consultant.
Competition is likely to increase. For example, Comcast's 24-hour sports network Versus, saw its audience grow 22% in 2008, and it tried to acquire the rights to the NFL
in 2005. Versus executives have vowed to bid against ESPN for additional rights in the future.
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