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What Happened To The Biz of Baseball? PDF Print E-mail
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Business of Sports Network News
Written by Maury Brown   
Friday, 20 February 2015 00:30

The Biz of Baseball

Hello, it's me.

Yes, it's been an exceptionally long time since I've posted to The Biz of Baseball. For those that follow my comings and going via Twitter @BizballMaury or via my Facebook page, you'll know that I have been publishing almost exclusively at Forbes.

The reason for this comes in a couple of flavors, most notably that the ad model for Biz of Baseball no longer sustained it. For every story I could run on this site for nothing with little compensation could be published at Forbes where I have been happy and see some return on content.

However...

This does not mean The Biz of Baseball is going away. While I was unable to gain the funds to create a single portal for all sports, there is still a lot of data used within it daily by fellow members of the media, as well as other researchers.

To that, my work in MLB salary arbitration continues. Total data is culled from this year's class, and with it, some data on the site has been updated.

You'll want to check these two links"

MLB Salary Arbitration Scorecard

MLB Salary Arbitration Hearing Outcome by Club (1974-Present)

There will be an extensive detailed report that I will publish on Forbes, that like years in the past, will have an Excel spreadsheet that users can download for their own research purposes.

As always, thanks for taking the time to swing by here, and I hope you'll read articles that I am currently publishing on Forbes.

Maury Brown
President, Bizball LLC

 
Forbes: You Don’t Want to Admit It, But Donald Sterling Is Good For Sports And Society PDF Print E-mail
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Maury Brown Article Archive
Written by Maury Brown   
Tuesday, 27 May 2014 22:15
Donald Sterling

It’s not often that I pump out a column that reaches far deeper than sports, and instead, asks uncomfortable questions that each of us need to face, but that was the attempt for Forbes on Tuesday. For weeks, I’ve been reporting on Clippers owner Donald Sterling’s comments, Commissioner Adam Silver’s punishment, and how it impacts basketball.

But, from the time the story broke, the issues at the heart of Sterling’s racial comments seemed to me to mean much more. That it reaches into not only the NBA and its owners, but to the NFL (Redskins name change debate), the historical references to what has happened with MLB (Marge Schott’s comments regarding Hitler), and what it is that we expect not only of our sports owners, but business leaders, and most importantly, society as a whole.

As for baseball, when Commissioner Selig was asked about it, he said, "I don't want to get into that, except we do have a history, without me going back into it, and our constitution is different than the other sports."

I’m not so sure Selig and baseball would be able to brush the issue away easily, but his reference—clearly to Schott—brings up why going through adversity makes you stronger when you get past it.

I start the column (see Why Donald Sterling Is Good For Not Only Sports, But Society) this quote we have all heard many times before

"That which does not kill us makes us stronger." - Friedrich Nietzsche

We don’t like the thought, but those that face adversity in life come out the better for it. As Nietzsche noted, adversity makes us stronger. In that, the Sterling debacle will not only make the NBA better, it will make cascade into other sports, and beyond into everything from questioning our business leaders on what we expect of them to matters of privacy rights, and ultimately you and I.

I touch on Mark Cuban’s and Stephen A. Smith’s comments. I bring up the Washington Redskins and how 50 members of Congress asked for the name to change (I’ll be doing more on this for Forbes in a future column), but here’s a sampling from the Forbes article:

Donald Sterling Asks Us What We Expect Of Business Leaders

Like all of society, there are those that are good and bad examples of what we see as human character. While on one level it may seem unfair, when Donald Sterling signed-up to be owner of the Los Angeles Clippers, he became a steward of a public asset. As a business owner, he represents not only the Clippers and the NBA, but in a large way, represents the city of Los Angeles. So, to the critics that say that Sterling is being punished unfairly, the discussion has to be, do we hold sports owners and business leaders accountable in some fashion? That in owning a sports club as a public trust, they are held to a higher standard? In that, it begs the question as to whether all business owners and leaders be under higher scrutiny?

Donald Sterling Forces Us All to Look In the Mirror

There has been a large discussion about whether any of Sterling’s recorded comments be grounds for not only fining him $2.5 million, but lead to the NBA terminating his ownership of the Clippers. After all, until he went on CNN with Anderson Cooper, the recordings from his alleged girlfriend V. Stiviano brings up the debate around privacy rights.

In the end, that may be true, but what Sterling’s debacle has brought about is the notion that, for good or bad, in an age of smartphones and social media, we can all be photographed, and recorded. Maybe what Donald Sterling has done is force us all to ask, “If I was being recorded, knowing it could find its way into the public eye, would I say or do certain things?”

Yes, the Donald Sterling fiasco is good for sports… and society as a whole.

I look forward to your comments on Forbes.


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball. He writes extensively for Forbes on the topics of sports business. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.

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Current MLB to Portland Effort Big on Dreams, Short on Answers PDF Print E-mail
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Maury Brown Article Archive
Written by Maury Brown   
Friday, 11 April 2014 15:47

A's“The A’s have a problem. Baseball has a problem. Portland is the solution.”

I’m talking with long-time Portland business associate, Lynn Lashbrook. Since 2000, he and I have been in steady contact about the possibility of bringing Major League Baseball to Portland. Lashbrook, the city’s biggest cheerleader for bringing MLB to the market, remains ever the optimist. I, given the changes in how the Montreal Expos relocation was structured, and the situation with the Major Leagues today, am not.

In a nutshell, the current effort to bring MLB to Portland is really Lashbrook, and architect Barry Smith. This was a far cry from 2000-2004 when MLB owned the Expos and were actively shopping relocation. At that time, the MLB to Portland effort included Mayor Vera Katz, the Oregon Sports Authority, a group called the Portland Baseball Group, a group of several lawyers, myself, Lashbrook, and others that had former Minnesota Timberwolves President and GM David Kahn pulling it all together.

The key then is nowhere near happening now: a club was owned by the league (Expos), and MLB was actively pursuing relocation. This simple, yet critical aspect, is why any discussion of the A’s or Rays relocating is a non-starter. Because without that, what you have are owners trying to leverage a ballpark deal, first in their market, and then only with the blessing of the league and a clear message that says, “Team up for sale,” does relocation to a new market occur.

But not even that has happened.

Time and again, the discussion has been that the A’s, mired for over 15 years in an effort to get a new ballpark while being stuck in an outdated facility (which has infamously saw toilets back up), is stuck in neutral. Owner Lew Wolff has pushed to get out of Oakland, and while San Jose has gone so far as to try and sue MLB to get the A’s to relocate there, that market falls within the Giants operational territory, which they’re holding onto like grim death. Since 2009, baseball commissioner Bud Selig has been “working on it” but the politics of the matter are far too thorny to get past. Force the A’s into San Jose against the Giants will, and what’s to keep that happening with other clubs elsewhere? Selig knows that with a majority of owners having to vote in favor of such a move, the consensus of the owners is not currently behind relocation to San Jose.

But, Wolff is actively looking to relocate. If not in the South Bay, then to Portland, right? No. In fact, Wolff has said his only interest in relocation is within the A’s own territory. From CSN Bay Area (emphasis, author):

“I am hopeful of expanding our lease at the Oakland Coliseum for an extended term," Wolff wrote. "If we cannot accomplish a lease extension, I hope to have an interim place to play in the Bay Area or in the area that reaches our television and radio fans — either in an existing venue or in the erection of a temporary venue that we have asked our soccer stadium architect (360 Architecture) to explore. Looking outside the Bay Area and our media market is an undesirable option to our ownership at this time."

So, the drum being banged on MLB to Portland is not due to any actions on the part of the A’s.

There are a host of logistic issues at play that even if the A’s were courting the Portland market, make it difficult, if not impossible.

The Mariners, Giants and the Issue of a TV Deal

Lashbrook was quick to tell me that unlike San Jose, the Mariners hold no rights to Portland. This is true to the letter of the MLB Constitution, but doesn’t address the 800-lbs. gorilla in the room, television.

The Mariners broadcast territory is vast, covering the entire corner of the Pacific Northwest (see purple in the image below), while the stripes in pink show where the Giants and A’s broadcast territory overlaps. Since the ability of any club to be successful is based in large part on their local television rights deal, Portland has to somehow carve up a place in the midst of the competing interests of the Mariners and Giants. You might be able to control as far north as say, Longview, WA, and south to the border with California, but along the way, sharing would come into play, and worse, some form of indemnification to the Mariners and to a lesser extent, the Giants. This means carving up the pie three ways, as opposed to the A’s sharing all of Northern California and half of Nevada with just the Giants. Lashbrook and other boosters in Portland will need to spend considerable time being able to answer this question in some capacity for a club to really consider relocation viability.

Mariners Broadcast Territory

Outlined in purple, the Mariners broadcast territory is the largest in
MLB, and an obstacle for Portland's MLB efforts

See the entire MLB television broadcast territory map

Select READ MORE to see the rest of this article

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MLB.com Releases RBI Baseball 14 for Xbox 360, PS3, and iOS Devices PDF Print E-mail
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Internet
Written by Maury Brown   
Thursday, 10 April 2014 13:00

When it comes to video games, like movies, reboots can come with a mixed bag. On one hand, we’re happy to rekindle a beloved title, but updating it can come with that purist mantra, “Don’t mess with a classic.”

So, it was with much interest that MLB.com yesterday released R.B.I. Baseball 14 for Xbox 360, PS 3, and iOS (all via download). The title, developed in-house by MLB Advanced Media (MLBAM), is available for $4.99. The nice thing is, since it was done with the MLB Players Association in tow, you get not only all the MLB logos, but yes, actual players. Want to load up and have a rematch of the 2013 World Series starting in St. Louis, you can select John Lackey as your starter out of the SP roster.

For those wondering why PS3 and Xbox 360, as opposed to PS4 and Xbox One, MLB.com informs that they were far down the development path at the time that the the two new hardware platforms were released. There will be an update as MLBAM is "well on the way" for the newer consoles, so stay tuned.

While the game has been graphically updated from the Namco version for the original NES platform, the controls and game play are pretty much the same. The pitcher and batter can be moved around before a pitch is made, and if you’re on the defensive side, you can use the joystick function to move the ball up, down, left, or right after released. For fielding, there’s updated graphics for the windows in the outfield, or base runners should you want to attempt pickoffs. For iOS, a joystick icon and base paths touch graphic is in the lower left and right of the screen to mimic controllers.

All-in-all, it’s cool to go back to the future. Will retro gamers dump their Namco cartridges for NES in favor of it? Likely not. Will they augment for newer platforms? Based on the update, chances seem very good.

Below are screenshots of R.B. I. Baseball 14 for the Xbox 360 and iOS (iPhone)

iOS

iOS

iOS

iOS

iOS

Xbox 360

iOS

Xbox 360

iOS

Xbox 360

iOS

Xbox 360

iOS

Xbox 360

iOS

Xbox 360

iOS

Xbox 360


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.

Follow Maury Brown on Twitter Twitter

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Ballpark Considering Hot Dog Flavored Cocktail PDF Print E-mail
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Written by Maury Brown   
Tuesday, 01 April 2014 11:17

Frank CollinsIt seems nothing is beyond reality when it comes to concession offerings at the ballpark these days. Whether it’s a $25 corn dog from the Arizona Diamondbacks or the $40 hot dog that was available as part of the season opener in Australia, size (and wildness) abounds in baseball.

Now comes word that one minor league ballpark is considering a hot dog flavored cocktail.

Based on this mixologist recipe, loosely based off a Tom Collins, the Frank Collins would be a wild addition (and quite the conversation piece) in your luxury suite or ordered up at the concourse bar.

But, here’s what’s really cool. While the recipe at the ballpark is not being released, you can make the version posted at the link. Got your shopping list ready? Here you go:

1.5 oz gin (or any spirit you have)
1.5 oz frank consommé
3 dashes Worcestershire sauce
2 oz beer to top
hot dog spear (for garnish)

Add all but the beer to a shaker with ice, shake to chill and strain into a Collins glass over fresh ice. Top with beer and garnish with a hot dog spear that has been cooked or not. It doesn't matter.

Note: To make the frank consommé, cook several hot dogs in boiling water. Reserve the water.

The mixologist notes:

The Frank Collins has several interesting variations worth exploring. For example, if you enjoy chili dogs, don't be afraid to add a few dashes of Tabasco. Soy sauce can work in lieu of Worcestershire, and why not toss some ketchup and mustard into your shaker? The condiments are totally up to you, so even a muddled pickle or some relish works, provided you double-strain. It's hard to go wrong here. In fact, this drink is just as good with the hot dog, pickle, and even a bun all ground up in a blender. Heck, if you are making a frozen version, you might as well toss in some cheese, onions and some baked beans. You may need a bigger straw to accommodate the chunks, but it's worth it. Cheers to you on this happy day! Enjoy one during a game or as a substitute for dinner and you'll definitely want to follow it with the fantastic Pepto Bismopolitan!

While many opt for a beer at the ballgame, this is one way to avoid the snobby approach that a martini or a drink with an umbrella might display, while at the same time, adding an air of refinement that a lager just doesn’t give at the game. Strange? Nothing seems sacred at the ballpark any longer

Frank Collins drink

The "Frank Collins" is reportedly coming to a minor league ballpark


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.

Follow Maury Brown on Twitter Twitter

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10 Reasons To Rethink MLB Free Agent Contracts, And Lessons In Economic Disparity PDF Print E-mail
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Maury Brown Article Archive
Written by Maury Brown   
Monday, 24 March 2014 13:00

MLB revenues

With MLB revenues increasing, clubs are taking more risks with contract amounts, and

more importantly, lengths

As we roll up on the start of the 2014 MLB regular season, the inevitable questions begin to surface as to who has done the most to improve themselves in the offseason. Predictions are made as to who will make the postseason (a difficult, if not silly endeavor), that none the less makes for great fodder at barstools and water coolers.

Those that wish to assign praise or blame around the amount of years and total dollars assigned to multi-year extensions have their work cut out for them. It’s not that this facet has changed dramatically from the days when baseball became a professional endeavor, rather that the needed adjustments in the overall view of what a “good” or “bad” contract is changing as revenues ebb and flow.

Baseball is seeing a dramatic escalation in revenues due to national and local media rights deals. That has allowed more risk taking. Here’s why what looks crazy may not be crazy in the overall.

#10 - Growth in Overall Revenues Has Made MLB an $8 Billion+ Industry

When accounting for the growth of media rights, along with attendance growth, and other revenue streams, when accounting for inflation Major League Baseball has seen gross revenues grow 274 percent since 1995. As we reported here first on Forbes, MLB’s gross revenues for 2013 surpassed $8 billion for the first time. While there are haves and have nots of varying degrees, this steady growth in revenues is giving owners belief that “taking a chance” can be for everyone.

#9 – AAV and the Luxury Tax

With the influx in revenues, those clubs looking to wrap up talent to multi-year extensions have more flexibility than ever before. The problem is in the allocation of salary to individual player resources.

If we look the current trend for top-tier veteran free agents, what we’re seeing is an escalation in contract length, as well as increased overall total contract value. This is partially due to clubs looking to keep the annual average value (AAV) within reasonable limits along with the other players on the roster to prevent bumping into the Luxury Tax threshold. By spreading out the total dollars over years, the larger sums can be met while still allow some level of flexibility. Of course, this comes with it’s own set of risks as we’ll see later when performance wanes.

#8 - While Mega-Deals Remain, the Cost of Player Salaries Are 47% of Revenues

While fans will shake their heads at what appears eye-popping contracts, the amount paid out to players in contracts takes up less than 50 percent of the total revenues coming into the league. According to The Associated Press, $3,767,445,277 was spent this past season on player salaries, including benefits and extended benefits. That reflects only 40-man roster compensation and does not include signing bonuses for minor league contracts, such as players in the Rule 4 draft, and international free agents. Still, that amount accounts for just 47 percent of the total revenues coming into the league (and remember, the league would only say that revenues came at above $8 billion, but not higher than $8.5 billion, meaning the percentage could be less). As to how this occurs, there’s certainly clubs like the Houston Astros that are doing a radical rebuilding process that saw total player payroll for 2013 below $30 million, but there’s a larger reason. For most all players in the first 3 seasons of an MLB career, clubs only need pay them at least the league minimum salary, which this past season was $490,000. After that, the majority of the players will see 3 years of being in salary arbitration where player performance is compared to like players and their salaries. While there is a sizable increase between the first 3 years to salary arbitration, there is still some level of control with the salary arbitration system. Imagine if players like Clayton Kershaw or Mike Trout were, instead, instantly free agents. How much more would they be earning now?

#7 - With Extra Money, the Free Agent Pool is Thinning, Thus Driving Up Demand

The system that is seen as the most sound in baseball is to develop players through the draft and shrewd trades, and then selectively offer the best talent extensions before they hit free agency. Fifteen years or so ago, the small revenue clubs bemoaned that they couldn’t sign the extensions, and lost talent they had developed to free agency. Now, more and more clubs are signing young core talent.

In doing so, you get a classic “supply and demand” dilemma for those that wish to tap free agents. As fewer players hit the free agent market, so demand for them goes up… as do the salaries and the contract lengths. For those that wish to make a move in free agency, doing so with the cream of the crop means busting open pocketbooks, and be willing to do so for many years to one player resource.

#6 - Annual Contact Escalation

One game general managers in MLB like to play is “It Might Look Crazy Now, But Not in A Few Years.” That is to say that there is constant market escalation. As other free agents sign deals, the market changes upwards. Throw in rate of inflation, and GMs and agents for the player will factor in adjustments. Where it gets interesting is the fuzziness of the free agent market. What the sides try to do is work out a way in which annual escalation is factored in, with the player and agent erring on the side that anything from injury to performance decline can factor in, and the owner and GM thinking that what may look high now will look “low” in the future. Of course not all contracts see the same amount or slight increases to account for market escalation in each year of a multi-year agreement. Some clubs do what is called “front loading” (more salary in the beginning years that then tapper off at the end) or more commonly, “back loading” (think of balloon payments on your home mortgage). The plan that most often leads clubs to get into back loaded contracts is that they either A) don’t have payroll flexibility due to other player payroll obligations, or; B) the hope that signing a star free agent will get the team into the postseason (and hopefully a World Series win) in which case new revenues will flow in. The latter is a dangerous game of “robbing Paul to pay Peter” but it’s done. The most notable example was when Jerry Colangelo owned the Arizona Diamondbacks. The practice yielded a 2001 World Series Championship but it hamstrung the organization with bloated contracts for years after he left as fans became fickle when sustained trips to the postseason dried up.

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Download a Detailed Spreadsheet of All 180 MLB Salary Arbitration Players for 2014 PDF Print E-mail
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Salary Arbitration
Written by Maury Brown   
Sunday, 16 March 2014 21:35

A note from the author… They say, better late than never, but I’ve never believed in that. This data should have been published long ago (after all, salary arbitration is completed near the end of February). In years past I’ve had assistance in doing the work, but I’ve always felt badly about the hard work that these interns have put in without compensation. Therefore, this year was 100% on my own shoulders, and with it, the release date was somewhat delayed. This is a poor excuse. I do this work to allow researchers to use it, and I know that if this had been out earlier some great articles could have surfaced. Still, it will be used next year… and the year after… and the year after… Finally, I believe that with some assistance, a completed salary arbitration database will be coming soon that will see not only all my historical salary arb research rolled into it, but the critical player stats and positions that go with them. This, I believe, will create the very first free and public comping database for salary arbitration. Once again, thank you for your patience and download at your leisure. Maury Brown

2014 Salary Arb data

The Biz of Baseball has been updated with new data…

As has been the case since we’ve launched, each year we spend a great deal of time focusing on salary arbitration in Major League Baseball. We’re providing a spreadsheet with a large amount of data found nowhere else to use.

This year saw 180 players that were eligible, 146 that filed for salary arbitration, 38 players exchange asking figures with their respective club offering numbers, and three salary arbitration hearings.

Other points of interest:

  • A total of $548,005,389 was spent on the 180 players for the upcoming season, and increase of 88 percent from the 2013 salaries of $290,908,197 for the same players.
  • Total contract dollars that included multi-year extensions for the 180 came to a staggering $1,115,827,876. Going back over available information, it is believed that 2014 is the first time that over $1 billion was allocated to salary arbitration players
  • The Dodgers NL Cy Young winner Clayton Kershaw had largest total contract with his 7-year, $215 million contract.
  • The largest increase in salary from 2013 to 2014 came to the Marlins’ Giancarlo Stanton who in his first year of salary arbitration saw an increase of 1110.43% (2013 salary was $537,000 while 2014 will be $6.5 million
  • There were a total of 14 Super Twos this year (Steve Cishek, Lucas Duda, Ruben Tejada, Tyson Ross, Ben Revere, Jake McGee, Jose Lobaton, Juan Nicasio, Eric Hosmer, Al Alburquerque, Andy Dirks, Trevor Plouffe, Dayan Viciedo, and Tyler Flowers)

SELECT READ MORE TO SEE DETAILS FOR 180 SALARY ARBITRATION PLAYERS IN MLB FOR 2014 AND DOWNLOAD IT

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FOX Releases 2014 MLB Broadcast Schedule; Blackouts Eased PDF Print E-mail
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Written by Maury Brown   
Thursday, 27 February 2014 16:07

MLB on FOXFOX Sports today announced their 2014 MLB broadcast schedule, and with it, fans will see a several changes compared to year’s prior, including changes to the blackout policy. As part of the new eight-year, multiplatform media rights agreement that adds national cable and digital coverage to its portfolio, doubling regular season exposures, mostly on Saturdays, from 26 to 52 combined on the FOX Broadcast Network and FOX Sports 1, with 20 Saturday doubleheaders, 10 exclusively on FOX Sports 1 and 10 split between FOX Sports 1 and the FOX Broadcast Network.

FOX Sports 1 makes its MLB debut on Saturday, April 5 with a doubleheader as the Minnesota Twins take on the Cleveland Indians (1:00 PM ET) followed by the San Francisco Giants visiting the Los Angeles Dodgers (4:00 PM ET).  The NL champion St. Louis Cardinals debut in FOX Sports 1’s first primetime showing on Tuesday, April 8 (8:15 PM ET) with a visit from their division rival Cincinnati Reds.  Fresh off an inspirational and thrilling 2013 championship run for the city of Boston, the World Champion Red Sox premiere on FOX Sports 1 Saturday, April 12 (1:00 PM ET) against their longtime nemesis New York Yankees, from Yankee Stadium in the Bronx, N.Y.  The FOX Broadcast Network picks up its first Yankees-Red Sox matchup on Saturday, June 28 (7:00 PM ET).

Major League Baseball makes its 2014 MLB debut on the FOX Broadcast Network Saturday, May 24 (7:00 PM ET), the first of eight consecutive primetime windows leading up to the 85th MLB All-Star Game, with regionalized coverage of three exciting matchups, preceded by the Detroit Tigers hosting the Texas Rangers on FOX Sports 1 at 1:00 PM ET. As reported on Forbes SportsMoney, this year sees a slight easing up on national blackouts as part of the new agreement. Starting this season, subscribers of MLB Extra Innings and MLB.TV have the opportunity to watch Saturday MLB on FOX games subject to certain geographic black outs that protect games assigned to local FOX affiliates.

In addition to the All-Star Game, this year live from Target Field in Minneapolis on Tuesday, July 15 (8:00 PM ET), FOX Sports remains the home of MLB’s crown jewel events, including the World Series, two Division Series and the League Championship Series.

In addition to the All-Star Game, this year live from Target Field in Minneapolis on Tuesday, July 15 (8:00 PM ET), FOX Sports remains the home of MLB’s crown jewel events, including the World Series, two Division Series and the League Championship Series.

All regular season games, Division Series, League Championship Series, World Series games and the All-Star Game broadcast by FOX Sports are being streamed live via FOX Sports GO through participating video providers.

Eric Shanks and John Entz are FOX Sports’ Executive Producers. Bardia Shah-Rais serves as coordinating pregame producer. Pete Macheska is coordinating producer of FOX Sports’ MLB coverage. Bill Webb is lead director.

SELECT READ MORE TO SEE THE FOX MLB BROADCAST SCHEDULE

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TOMS: Why MLB is Thriving.... and Dying PDF Print E-mail
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Pete Toms Article Archive
Written by Pete Toms   
Monday, 10 February 2014 15:02

MLBEarlier this winter I listened to a sports radio segment where 2 Toronto sports pundits attempted to explain the seemingly counter - intuitive news that MLB annual revenues have climbed to upwards of $8 billion.

On the one hand, they noted, steadily diminishing national TV ratings (including ASG and WS), reveal that baseball is clearly less popular. And hasn’t the NFL, long ago, and by a wide margin, supplanted MLB as the dominant pro sports league? And wasn’t it, after all, inevitable? Isn’t baseball anachronistic? From a slower, analogue, monolithic popular culture?

On the other hand, they understood why MLB revenues have skyrocketed. The biggest factor being the enormous increase in TV $$ from both national, and especially, local deals. Plus, attendance is stable, at near-record levels. And yes, almost ironically, slow, staid MLB has better exploited the internet than any of the other so-called Big 4.

They’re right, on both counts. Yes, baseball is dying. And the evidence is not found in the diminished national TV ratings (TV ratings are down for all programming except the NFL) but in who, and who isn’t, watching. Old guys, not young guys, like baseball. Jonathan Mahler was amongst those who reported this fall that the median age of the 2012 WS TV viewer was 53.4. Perhaps more telling is the steady, long-term decline in the number of kids playing baseball.

But it is precisely because MLB fans are old that business is booming. The huge boost in MLB TV $$ comes from us old guys who subscribe to Pay TV. We are footing the bill for the recent spate of MLB mega deals with local RSNs. We aren’t the cord-cutting, digital natives who have never paid for content. They believe that paying $100/month to watch video is stupid. Earlier in the year Joe Flint reported that, “By 2015, almost half of all television viewing will be done by folks over the age of 50…” The migration of local MLB broadcasts from free over-the-air TV to Pay TV was inevitable. Why? Because MLB fans can afford Pay TV. We are baby boomers, the most affluent generation in history. And baseball fans are the most affluent of sports fans. We complain about our cable bills, we’re old, so we’re allowed. But we’ll still pay for the nightly, pleasant, familiar, tribal, ritualistic pleasures of watching our team on our big TVs, in our comfortable basements. It feels good.

While there is debate about the future prospects for the Pay TV industry, under pressure from OTT, potentially one, or some of, Google, Apple and Aereo, and politicians and regulators sabre-rattling over channel bundling…. in the present, it’s still thriving. And as long as MLB continues to aggregate large TV audiences of purchasers of financial services, luxury autos and ED remedies , there’ll be plenty of money in it for them.

You can follow me on Twitter @PeteToms


Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.

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What Could the Globe Life Naming Rights Be Worth to the Texas Rangers? PDF Print E-mail
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Written by Maury Brown   
Wednesday, 05 February 2014 18:08

Global Life Park in Arlington

UPDATE: According to several sources, the naming rights deal has an AAV of approx. $5 million. That would place total value at approx. $50 million

Today, the Texas Rangers announced that they had reached a 10-year naming rights agreement with Globe Life And Accident Insurance Company to rename “Rangers Ballpark in Arlington” to “Globe Life Park in Arlington”. The change is effective immediately.

Under the agreement, Globe Life will be the Official Life Insurance Partner of the Texas Rangers, add community initiatives and serve as the sponsor of Elvis Andrus Kids Jersey Day on Friday, June 27 when the Rangers host Minnesota.

With the naming rights deal comes a new logo, which will be displayed throughout the park, including on the tops of both dugouts. Globe Life will also receive other permanent and digital signage throughout Globe Life Park in Arlington as well as a presence on texasrangers.com and the Texas Rangers Radio Network.

The larger question centers on what the deal is worth as financial terms were not released. This would be the second naming rights agreement that the ballpark has been under. The now defunct Ameriquest had a 30-year rights deal, but just three years after the agreement was inked in 2004, the Rangers ended the deal and renamed it Rangers Ballpark in Arlington, which it has remained till today.

The naming rights market was hit heavily due to the deep recession that started in December of 2007. In November of 2006, Citigroup entered into what is still the largest MLB naming rights deal in history with the Mets for 20 years, $400 million with an average annual value (AAV) of $20 million for what is now “Citi Field”. It was a staggering sum, and well above the norm at the time, and with the recession, still is to date. Far down the list, the Houston Astros agreed to a 28 year, $178 million naming rights deal with Coca-Cola Co. to name their ballpark Minute Maid Park. That agreement has an AAV is $6.63 million. Other MLB naming rights deals include the Phillies and Citizens Bank (25 years, $95 million, AVV of $3.8 million), the Reds and Great American Insurance (30 years, $75 million, AAV of $2.5 million), the White Sox and U.S. Cellular (23 years, $68 million, AAV of $2.96 million), the Diamondbacks and JPMorgan Chase (30 years, $66 million, AAV of $2.2 million).

With the naming rights market slowly unthawing, and the 10 year duration, the question is where the Globe Life deal stacks compared to others. Globe Life is a subsidiary of Torchmark Corporation (NYSE: TMK), headquartered in McKinney, TX. Globe Life has 3.9 million policyholders and more than $60 billion dollars of life insurance in force. They’re not small, but certainly not on the scale of Citigroup or Coca-Cola Co. Based on prior naming deals, the value could in the $40 million (AAV of $4 million). That wouldn’t be out of line for MLB naming rights, especially in light of the Portland Trail Blazers recently inking a 10-year deal with Moda Health to rename the Rose Garden the “Moda Center” for $40 million. By now, the naming rights game has thawed, and the Rangers play to a larger market and a brand that has seen recent showings in the World Series.

Even if we’re conservative, the idea of $3-$4 million annually seems a safe bet. How much would that be worth to the club? It would barely dent the $24 million Prince Fielder will get this season, and cover a little under a fourth of Adrian Beltre’s $17 million salary for 2014. Still, it’s new revenues that were not their prior so it’s not like the Rangers are walking away unhappy.

As for fans, many will likely stick with “The Ballpark” and that was bound to be factored in by Global Life. A snazzy acronym doesn’t seem to work well. Going to the “GLP” or “GLPIA” doesn’t exactly roll off the tongue, but then few could have seen OPACY or GABP becoming common place with baseball fans, but it is. As to the deals value, whether it's our estimate or other reporting, details should leak out soon.


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He writes for Baseball Prospectus and is a contributor to Forbes. He is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted here.

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