Major League Baseball has inspired so much of American culture that at some point it became one of the essential foundations of the culture. All other professional sports together have not come close to inspiring the sheer volume of literature, analysis and historical examination that baseball has– from it’s inception in 18th century America to this morning’s online sports news sites.
In the words of Howard Bryant, a senior writer for ESPN, “baseball looks forward and backward better than any other sport.” In an absolutely brilliant piece published on November 12, 2010 at ESPN.com, Bryant takes a hard look forward to what Major League Baseball will likely become after the San Francisco Giants’ unexpected and amazing 2010 World Series championship.
In that insightful essay, Howard Bryant writes, “the 2010 season will be remembered wistfully as historic, for the game quite likely will never be the same.”
It is a story as old as the game itself– team owners and commissioners focused not on the glory of the game, not on baseball’s colorful history, and certainly not on the intensely personal relationship fans have with the game, but on revenue. On money, or more specifically on making more money.
From 1902 until an independent legal arbitrator struck it down in 1975, the reserve clause was baseball’s driving financial machine. Players were forced to remain employed with their teams until ownership either traded them or released them. Since the players couldn’t market their services to other teams, salaries were kept low and superstar players were essentially kept hostage by their owners for years.
Since 1975, although player salaries have soared, another revenue-generating monster has made the reserve clause look like spare change: television. While network and cable contracts are not the only revenue stream for each of baseball’s 30 teams, it has become the dominent source of money for team owners over the past thirty years.
In 1973, George Steinbrenner bought the New York Yankees for $10 million. In April 2010, Forbes Magazine put the New York franchise’s worth at $1.6 billion. In 1976, San Francisco businessman Bob Lurie led a group that bought the Giants from Horace Stoneham for $8 million. In 1993, a Peter Magowan-led group purchased the Giants for $100 million. In April 2009, Forbes estimated the San Francisco franchise was valued at $471 million (including AT&T Park). That’s a 371% increase in value in just 16 years.
And TV’s contributions to baseball’s piggy bank? In 2009, Fox Sports paid Major League Baseball $2.5 billion as part of a five year contract broadcast a variety of games, including the World Series each year. If evenly divided, that’s $8 million per team each year, or $40 million. Individual teams also have local broadcast contracts for television and for radio. Forbes put the Yankees’ local TV and radio licensing income alone at $30 million a year; New York’s overall yearly revenue was estimated to be $302 million! And while the Pittsburgh Pirates will certainly see smaller income streams, they also have them.
What does all this have to do with the San Francisco Giants winning the 2010 World Series? Television income is ultimately based on ratings; higher ratings mean more money can be charged for advertising, and more profits can be made for the television networks and for baseball. The Giants-Rangers Series tied the all time lowest broadcast ratings ever, because the sports media is an East Coast citadel that only promotes East Coast teams and (at times) the Chicago Cubs and the LA Dodgers. Period.
Which, as Howard Bryant succinctly points out, means unless the Yankees or Boston make the World Series, the ratings are pretty much guaranteed to drop.
The Baseball Commissioner’s solution? Add more teams to the playoffs, which is simply another way to ensure the high spending Red Sox and Yankees will both likely make the post season every year. And the deeper those teams go into the playoffs, the more money baseball makes– an easy decision that has nothing to do with what’s best for Major League Baseball.
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