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Stop Believing MLB’s Future Is Bleak. It’s Actually Quite Rich

Stop Believing MLB’s Future Is Bleak. It’s Actually Quite Rich

You know the drill. Every time Major League Baseball has a labor squabble, or another 3 1/2-hour game, or a dip in attendance, or a low-rated World Series game, the doomsayers do their thing.

Baseball’s dying.

Fans won’t take it anymore.

The future is bleak.

MLB will really pay this time.

It’ll pay, all right. I woke up Dec. 14 to the news that Carlos Correa had agreed to a 13-year, $350 million deal with the San Francisco Giants. The cry-poor owners spent a record $1.6 billion in the first three days of free agency last week. The Correa deal proved that the money had only begun to fly.

And have you seen what franchises are selling for these days? Try a record $3 billion expected for the Los Angeles Angels any day now. The New York Yankees are valued at $6 billion. Shoot, the little ol’ Kansas City Royals went for a cool $1 billion in 2019, prompting Forbes to write: “Even a bottom-of-the-barrel baseball team can appreciate in value three times faster than the stock market.”

Oh, and this little nugget: “Baseball teams, as in virtually every sport, have appreciated in value mainly because of the rapid rise in the value of their media rights. … Last year (2018), Fox extended their deal through 2028 at nearly a 50% annual average increase.”

True, that was before the pandemic, which also was supposed to ruin baseball. Only it didn’t. Despite a shortened season and another with attendance restrictions, the sport returned in full last season and reportedly raked in record revenues of more than $11 billion.

Dying sport, my Astro. Do you think revenues are going to plunge anytime soon?

This is among the latest quotes you’ll see from Forbes: “The money from Apple, Peacock and ESPN will push baseball’s annual media rights past $2 billion, or at least 30% more than the previous round of media deals.”

Attendance is declining. That’s a fact. It reached its lowest level since 1997 last season, but it also returned to 94% of what it was before the pandemic. And here’s the key point: Attendance is very 20th Century when it comes to analyzing a sport’s financial health.

Look at college football, where attendance declined for a seventh consecutive season in 2021 but where the Big Ten recently signed a media rights deal worth more than $1 billion annually and where an expanded playoff could reel in more than $2 billion per year. I think they’ll survive 500 fewer people at the Cal-Colorado game.

But back to baseball: Record revenues; record spending; record franchise sales; and record media deals that stretch far into the future. Those are not signs of a sick industry. Those are signs of robust health.

Those are signs, in fact, of very rich people investing in something they believe in. The folks who run these teams didn’t make their fortunes throwing away cash (actually, about half of them inherited daddy’s money, but you get the point). If they’re spending this big — Pirates not included — that means they are confident their industry is thriving and will be for a long time.

I mean, Trea Turner just signed a $300 million deal that will take him through age 40.

As for television ratings, you can twist those any way you like. Baseball’s ratings actually rose significantly in the early rounds of the playoffs — including, quite notably, a 22% jump among younger viewers (ages 18-34).

The sad part of all this is that cheap owners like the one here in Pittsburgh look more ridiculous by the day (although they continue to rake in revenues). The Mets‘ payroll was something like $345 million last I checked, or about $300 million more than the Pirates’. That’s just silly. It doesn’t mean you can’t win — Tampa Bay wins every year with a bottom-feeder payroll — but the disparity is beyond glaring.

Baseball also will make significant changes next season aimed at improving the sport’s appeal. You’ll see a pitch timer to improve pace of play, a ban on shifts to pump offense, and bigger bases to encourage base stealing.

Meanwhile, the cash keeps flowing. Last month, MLB sold the remaining 15% of the video streaming company BAMTech to Disney for $900 million.

It’s not the NFL. No sport is even close to that. But the next time somebody tells you baseball’s in trouble, tell them you’re not listening to such talk anymore and leave ’em with the oldest advice in the book:

Follow the money.

This article was written by Joe Starkey from the Pittsburgh Post-Gazette and was legally licensed via the Tribune Content Agency through the Industry Dive Content Marketplace. Please direct all licensing questions to legal@industrydive.com.

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