When ESPN opted out of its contract with Major League Baseball in February, the network was hoping to get a reworked package at a lower cost while Commissioner Rob Manfred thought the sport could optimize its rights in the short term for Home Run Derby and Wild Card round.

In the end, both parties may get what they want.

According to people familiar with negotiations, ESPN is nearing a deal to distribute out-of-market games while NBC/Peacock, Netflix, Apple TV are in talks for regular-season packages, the Wild Card round and Home Run Derby.

All sides hope to have everything finalized by the end of the regular season next month, three people told The Associated Press on condition of anonymity because the contracts have not been finalized or announced by either side.

The negotiations around the three-year deals is complicated due to the fact that MLB is also trying not to slight two of its other rights holders. MLB receives an average of $729 million from Fox and $470 million from Turner Sports per year under deals which expire after the 2028 season.

While ESPN would be losing the playoffs and Home Run Derby, it would be gaining something it considers more valuable -- the MLB.TV streaming package of out-of-market games as part of the direct-to-consumer service that launched on Thursday. ESPN would also sell the in-market rights to the five teams whose games are produced by MLB -- San Diego, Colorado, Arizona, Cleveland and Minnesota.

"We are engaged. We are having healthy conversations with them. Nothing to announce today, but we're very interested in baseball in general," ESPN Chairman Jimmy Pitaro said on Tuesday during a presentation about the network's DTC service.

ESPN, which has carried MLB games since 1990, opted out of the final three years of a seven-year deal in February. The package averaged $550 million per season and also included the Home Run Derby and Wild Card games.

Baseball would be the second league that would have its out-of-market digital package available in the U.S. on ESPN's platform. The NHL moved its package to ESPN in 2021.

It would also be a win-win situation for MLB and ESPN. Manfred wrote in a memo to owners after ESPN opted out of its contract: "While ESPN has stated they would like to continue to have MLB on their platform, particularly in light of the upcoming launch of their DTC product, we do not think its beneficial for us to accept a smaller deal to remain on a shrinking platform. In order to best position MLB to optimize our rights going in to our next deal cycle, we believe it is not prudent to devalue our rights with an existing partner but rather to have our marquee regular season games, Home Run Derby and Wild Card playoff round on a new broadcast and/or streaming platform."

The moves keep ESPN involved in baseball, but at a point where it can benefit while MLB could benefit from other partners in a short-term deal.

There is a possibility that ESPN would still air 30 regular-season games, but not Sunday nights. That package of games would go to NBC/Peacock, along with the Wild Card round.

NBC, which celebrates its 100th anniversary next year, has a long history with baseball, albeit not much recently. The network carried games from 1939 through 1989. It was part of the short-lived Baseball Network with ABC in 1994 and '95 and then aired playoff games from 1996 through 2000.

Peacock had a Sunday streaming package of early-afternoon games in 2022 and '23.

The addition of baseball games would give NBC a year-around night of sports on Sunday nights. It has had NFL games on Sunday night since 2006 and will debut an NBA Sunday night slate in February. NBC would likely do Sunday Night Baseball from May through Labor Day weekend.

Fox's Saturday nights have been mainly sports the past couple years with a mix of baseball, college football, college basketball and motorsports.

Netflix is in discussions for the Home Run Derby, which would align with its strategy of going for a big event in a major sport. The streamer will have an NFL Christmas Day doubleheader this season for the second straight year.

Apple TV, which has had "Friday Night Baseball" since 2022, remains involved in negotiations.

The deals would also accomplish another of Manfred's goals. He has said for three years that he would like to see MLB take a more national approach to its rights instead of a large percentage of its games being on regional sports networks.

"We're blessed with a huge amount of content: 2,430 games. Because of the amount of content, I think there will be some local component but I think the strategy needs to be more national and our reach needs to be more national," he said during a panel discussion last September at the CNBC x Boardroom's Game Plan event.

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AP MLB: https://apnews.com/hub/mlb