The Money of Baseball
Major League Baseball was dealt a blow recently when the Supreme Court ruled against its ability to earn revenues from fantasy baseball leagues. But, while MLB might have lost this battle, it is certainly winning the war of the dollar under the leadership of Bud Selig. It seems like the only thing Selig has done wrong is to allow an all-star game to end in a tie.
Baseball has never been more popular and has never been more profitable. The $6.1 billion baseball took in last year is, for the first time in many years, on the heels of the NFL’s $6.3 billion. This is in despite of the fact that 17 million watched the World Series last year versus almost 100 million Americans who watched the Super Bowl.
But, the differences in how the NFL earns its money versus MLB earns it are as different as the differences that are outlined by the late great comedian George Carlin. Football earns 70% of its revenue from television; baseball only 20%.
New stadiums have become the single most important factor in a baseball team’s success and all are built, at least in part, with taxpayer money. Since the innovative Camden Yards opened in 1992, there has been a proliferation of new stadiums–17 of the 30 MLB teams have new ones. (And, after my trip to the dump called Shea Stadium last night, I now know why the Mets need one too.)
Its counter-intuitive, but smaller stadiums mean greater revenue for baseball teams. Attendance last year averaged 32,785 which is the highest of all time and the fourth consecutive year of an increase. This is despite the fact that ticket prices have risen 87 percent in the past decade.
The cost of taking a family of four to a Boston Red Sox game, highest in the MLB, is $313.87. The best bargain: the Kansas City Royals where a family of four can go for a mere $123.42. Is it no wonder you see so many minorities in the stands anymore?
Baseball has also done a great job of branching into new areas of revenue. According to Bob Costas, MLB voted 30 to 0 to start a unified internet product in 2000. That division was to be administered by Major League Baseball Advanced Media (MLBAM).
This year, MLBAM will take in nearly $500 million with deals expanding beyond its web sites to include relationships with companies like Stub Hub–a Fantasy Baseball Dugout advertiser. Stub Hub is unique in that MLB is now taking a percentage of the resale value of its tickets that it sold in the first place!
So, if you are feeling badly about Major League Baseball not winning its lawsuit against the fantasy baseball industry, sleep well. Baseball is doing just fine without us.