XM Satellite Radio Holdings Inc.'s deal, potentially worth $650 million, to acquire the broadcast rights to Major League Baseball over at least the next eight years, announced yesterday, was made possible by ESPN radio relinquishing its satellite broadcast rights.
ESPN, owned by the Walt Disney Co., held the rights to broadcast baseball nationally over the air through its owned and affiliate radio stations. The arrangement gave it "blocking rights" to prevent other broadcasters from putting games on satellite services, said Tim Brosnan, a vice president for MLB who helped negotiate the XM deal.
ESPN's blocking rights expired in the past two months and, as part of a new national broadcast contract with baseball, ESPN did not renew the rights. Soon after, XM and baseball began crafting the deal, Brosnan said.
District-based XM, which beams more than 100 channels of music, sports and talk to customers for $9.95 per month, will devote up to 16 channels to baseball. On days when each of the 30 big-league teams play, 15 channels will be devoted to carrying the games. The extra channel will carry other baseball programming, such as broadcasts in Spanish and replays of archived games.
Both Brosnan and XM chief executive Hugh Panero said listeners likely will hear the announcers of the home team of each game. For example, if the Cincinnati Reds visit the Los Angeles Dodgers, listeners will hear longtime Dodger announcer Vin Scully.
Brosnan said baseball also talked to XM's rival, New York's Sirius Satellite Radio Inc., which has a similar service for $12.95 per month and recently signed Howard Stern to a multiyear deal to begin after he leaves Infinity Broadcasting Corp. in January 2006. But XM proved the best fit.
Brosnan said XM was chosen because of "the extent of their distribution, their plan for our property, their commitment to our property and the fact that we were the centerpiece for their sports play."
XM has more than 2.5 million subscribers while Sirius has about 700,000. Also, Sirius broadcasts NFL, NHL and NBA games, but XM did not have the rights to broadcast a full season of any major professional sport aside from NASCAR.
XM closed up 11 cents, at $29.16 a share yesterday, while Sirius closed down 1 cent, at $3.78 a share.