By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
You can't blame baseball for cashing in on this backhanded blessing. After all, when your customers willingly pay $8 for a Budweiser, it's safe to assume they'll buy anything at any price.
Baseball is "in a fantastic position," says Chris Bevilacqua, a New York media consultant. "It's going to continue."
He should know. Not long ago, the Texas Rangers were a color guard for mediocrity at both ballpark and bank. But even as they emerged from bankruptcy, Bevilacqua negotiated an estimated $80 million annual deal for local TV rights. He arranged another $60 million a year for the feeble San Diego Padres.
"It's like any other market," he says. "The markets go up and down. In the case of media and sports rights, they very rarely go down."
He's right. Or at least that's been true in the past.
Bob Gessner knows the drill. He's president of MCTV, a cable provider in Massillon, Ohio, that carries Cleveland Indians games. For the past decade, the Tribe has been a woeful club, losing games and fans with equal facility.
"In a year when the team does well, the reset [for broadcast fees] is due to the team doing well," Gessner says. "When the team is doing poorly, the rates will jump just as much because they need money to rebuild the team."
Cable and satellite companies grudgingly succumb, no matter how illogical the deal. Every provider feels forced to carry the same channels, lest customers flee to a competitor.
With no one saying no, the networks see sports as a no-lose racket, with ESPN as its piper. The sports channel charges cable companies $5 a month per customer, by far the highest monthly fee in national television. Though this may seem a pittance, it's big money when spread over the 100 million U.S. households with pay TV. And it's made the other big boys envious.
NBC and CBS have launched their own sports channels. Another from Fox is on the way. Even regional sports channels are starting to broach that $5 mark. Their bet is that viewers always will be willing to pay more. And more.
Economics on the ground say otherwise. Today, the average TV bill rests at $86 per month, about half of which pays for sports programming. That's more than double a decade ago. So it's no coincidence that the cable and satellite industries jettisoned customers for nine years straight. The new round of deals promises to hasten these unpleasant trends. "I can't tell you what will be the trigger," says Matthew Polka, president of the American Cable Association. "But I am certain that at some point in the very near future, that balloon will burst."
And when it does, baseball will take the brunt of the explosion.
To understand baseball's decline is to appreciate its awkward relationship with the very thing it sells: competition.
The NBA and NFL, those exemplars of socialism, share most of their revenue, realizing that for their sports to thrive nationwide, Green Bay and San Antonio must get the same cut of hope as Boston and Chicago.
Yet baseball hews closer to raw capitalism, where the big crush the small with painful regularity. If you're a fan in Denver or Miami, that's not entertainment; that's everyday life.
On opening day next year, the Dodgers' local TV contract will pay for their entire $200 million-plus roster — the highest in baseball — before they sell a single ticket, hot pretzel, or warm Pepsi.
Though baseball has long played with a rigged financial deck, it's about to get perilously worse.
The game, of course, does its best to subdue such talk. The surest way to keep front-office types from the phone is to request an interview to discuss how the latest local TV deals will affect competitive balance. The Padres, Dodgers, Cardinals, Twins, Brewers, Indians, and Pirates all declined comment for this story.
Selig's office isn't any more effusive. "We are going to take a pass on this one," says spokesman Matt Bourne.
Still, it's safe to say that these fixed odds have deposed generations of fans in smaller cities across the land. In any given year, half the teams are in the midst of three- to five-year rebuilding projects, since they're financially barred from the faster route of free agency. At the same time, the league has done little to make all that losing bearable.
While the NBA and NFL continually remake rules for speed and action, baseball's last significant change was the designated hitter. In 1973.
The result has produced a spectacle once described by the Boston Globe's Ray Fitzgerald as "six minutes of action crammed into two-and-one-half hours." Forgive young men for preferring other fare by the time the Fall Classic rolls around.
"Baseball has been declining in interest for some time in terms of the young male audience," says Patrick Rishe, an economist who studies sports at Webster University in St. Louis. "I think baseball is seen as archaic. The sport moves at a slower pace. Their athleticism doesn't jump off the screen. I think they have to find a way to speed it up."
It is time for a customer revolt. The cable companies are perfectly able to create custom packages for each customer's interests. The problem is Congress is in the pocket of companies like Viacom, and won't change the laws to require cable to offer custom packages. Maybe only anti trust lawsuits can end this racket. Under the current model Kansas City, Pittsburgh and Florida will never, ever again be in World Series. And it looks like no one cares anyway. I have a 20 year old son, and he and none of his friends care one iota about baseball. It's all NBA and NFL only.
I think your commentary on mlb economics was a wonderful, eye-opener for both sports fans, and non fans. You explain the crazy rise in prices to the viewer, but also point out potential exit strategies for non fans. I read your article in The Riverfront Times, in St Louis, Mo. I wonder why you had to tarnish your article by comparing baseball purists, to the Republic Party. The President won handily, but by only 4%. The Senate & House are under different parties, much change is in the air. I wonder why one political party was brought into a sports article? And in a negative manner? Thanks for the informative article.