February 4, 2004 10:28 PM PST

RealNetworks nixes baseball deal

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RealNetworks ended negotiations to extend its exclusive deal to power Major League Baseball's Web business, the company confirmed Wednesday.

The breakdown comes as no surprise, since RealNetworks CEO Rob Glaser has prepared investors for possible fallout from an end to the deal. Earlier this year, Glaser warned Wall Street during the company's earnings call that discontinuing its MLB relationship would account for only a 2 percent revenue loss for the year, according to a company spokesman.

The original deal, signed in March 2001, required RealNetworks to pay MLB $20 million over three year for exclusivity rights. RealNetworks then sold subscription packages that let fans listen to live audio Webcasts for most baseball games during the season.

However, the terms of the new deal were not to RealNetworks' liking.

"It was our intention to find a profitable way to work with them," said Greg Chiemingo, a RealNetworks spokesman. "But we were unable to do that with terms that worked for us."

Chiemingo declined to offer specific reasons why the negotiations broke down. He also declined to comment on whether MLB was asking for higher payments for exclusivity.

A spokesman for MLB Advanced Media could not immediately be reached for comment.

 

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