Major League Baseball's Screwball Economics

As another season begins, MLB faces an unsustainable future -- and you’re picking up the tab.

Major League Baseball's Screwball Economics
UPI/Kevin Dietsch
Marco Scutaro celebrates the Giants’ 2012 World Series victory.

Police in riot gear guard the dugouts, preparing for the worst with German shepherds at heel. This is Philadelphia in 1980, after all.

It's the top of the ninth. Two strikes. Two out. Bases loaded.

Human rocket Willie Wilson of the Kansas City Royals hugs the plate, curiously dressed in full powder blue, a color fancied by baseball teams and wedding parties of the era.

Tug McGraw in the 1980 World Series.
Manny Millan/Icon SMI
Tug McGraw in the 1980 World Series.
MLB Commissioner Bud Selig and his wife, Sue, at Game 2 of the 2008 World Series.
Flickr
MLB Commissioner Bud Selig and his wife, Sue, at Game 2 of the 2008 World Series.

His nemesis this evening is Phillies closer Tug McGraw, whose fame will later be shadowed by that of his son, country singer Tim McGraw. The screwball artist fires a pitch letter-high, but Wilson can only flail. Kansas City's insurgency is repelled. The Phillies win their first World Series since forming during the Chester A. Arthur presidency.

A record 54 million people tune into the game that night. It will be perhaps the last time baseball can legitimately call itself America's national pastime.


The Great Leap Downward

Fast-forward to last fall. Marco Scutaro cracks a 10th-inning single into the wet outfield of Detroit, nudging the San Francisco Giants to a World Series sweep. The Nielsen ratings will soon reveal how far baseball has plunged.

An average of just 12 million people tune into the 2012 Series — a collapse of nearly 80 percent from McGraw's heroics three decades earlier. In head-to-head competition, a regular-season NFL game will lap the Series by 10 million viewers. The geek comedy Big Bang Theory will pummel it by five million. Even the investigative drama Person of Interest — featuring "a software genius and an ex-CIA operative who work together to prevent violent crimes before they can happen" — will best the Series by two million viewers.

Commissioner Bud Selig has little to say about this spurning of affections. This flight of fans, after all, is very old news.

The last seven Series have attracted the seven smallest audiences in baseball history. In 2010, just 14 million people watched the Giants beat the Rangers, then a record-low audience. The next year, when the Rangers collapsed against the St. Louis Cardinals, dramatic Games 6 and 7 helped Fox recover, averaging 16 million viewers for the Series. But the audience was still dwarfed by those of baseball's heyday.

The sport's defenders have labored to explain the 2012 numbers away, citing late East Coast start times, an outbreak of entertainment alternatives and the favored wail of curmudgeons everywhere: that a younger, lesser generation of men prefer to whack pixelated zombies than witness the splendor of Pablo Sandoval going yard. Others claim the Tigers and Giants failed to ignite the country's passion. "I am of the belief that the match-up of the World Series is always important," says Professor Wayne McDonnell Jr., known as "Dr. Baseball" for his study of sports at New York University.

But of America's three major sports, only baseball needs excuses.

The NFL's ratings remain on a march to the heavens; 108 million people watched the last Super Bowl. Viewership for the NBA finals — though reduced from the days of Bird, Magic and Jordan — is once again climbing skyward.

Meanwhile, baseball's ratings continue to plummet, irrespective of month or match-up. Those record-low Series of the last seven years featured the game's biggest attractions, from the moneyed villains of Boston and New York to storied franchises like St. Louis and San Francisco. None stanched the bleeding.

Regular-season games have declined equally. Fox's Saturday audience has gone down an average of 800,000 since 2001. Sunday-night ESPN telecasts have shriveled by a million viewers in just the past six years.

In any other industry, such staggering drops would raise alarms of a rotting ship. One might presume that TV execs are screening Selig's calls. But the exact opposite is happening.

ESPN, Fox and Turner recently struck deals that double their annual payments to MLB. The Los Angeles Dodgers will soon ink a 25-year pact for local rights that's worth an estimated $7 or $8 billion. And while local sports-talkers spent the last month debating the value of Nolan Ryan having a desk chair at Rangers HQ, the franchise's position at or near the top of the standings was basically sealed when it inked a $1.6 billion deal with Fox Sports Southwest. The $80-million-a-year contract, which takes effect after next season, will be one of baseball's biggest. "It fundamentally changes the Rangers' economics," Vince Gennaro, author of Diamond Dollars: The Economics of Winning in Baseball, told the website Grantland in 2011.

If it all seems incongruent, born of the same economics that brought you bank bailouts and the housing crisis, that's because it is. Baseball, you see, is expecting you to pick up the tab.

In an age of stagnant wages, the average cable or satellite bill is expected to reach $200 by 2020 — even before extra fees for phone and Internet knock on the door.

"It's an unsustainable model for sports rights to escalate at a pace that's exponentially higher than wages for families," says Dan York, DirecTV's chief content officer. "It's coming to the breaking point."


Banking on the Slowest Falling Star

Inside broadcasting's executive suites, the Holy Grail has a new name: "appointment TV," considered the last defense against a fierce and fast-encroaching enemy, the DVR.

The problem for networks is that viewers are no longer showing up when they're supposed to. Instead of planning Tuesday nights around, say, Justified, people are recording shows to watch at their convenience. And unless they have a fondness for commercial interruptions, they'll be fast-forwarding through their daily regimen of Geico ads. Which makes Justified less valuable to advertisers.

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5 comments
primi_timpano
primi_timpano topcommenter

It seems that baseball is doing just fine. Your article seems to concern the broadcasters more than the teams.

JustSaying
JustSaying

I would like to see a graph on the interest in baseball superimposed over a graph of the percentage of fatherless homes in that same time frame. Baseball, more than any other sport, is one that is passed down from generation to generation. It almost always starts with 2 baseball gloves and a game of catch with your dad.

Dallasalli
Dallasalli

Rangers increased ticket prices overall and made some sections (third level behind home plate) into more expensive options.  Hard to believe they did that since they've lost so many veteran/fan favorite players this past summer.  I'm guessing fans will find everything more expensive, beer, sodas, food, etc.

fergusontx
fergusontx

Very interesting with quite a few points I wasn't aware of.  As a baseball fan, the one thing I did know was that the added financial burden would fall to me ... whether through cost of beer, pretzels, tickets or cable.

mcdallas
mcdallas

@JustSaying That is one of the best points I've seen in D.O. commenting in months.  Thanks!


...and...I totally agree.

 
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