Screwball Economics: As another season begins, MLB faces an unsustainable future, and you're picking up the tab

Screwball Economics: As another season begins, MLB faces an unsustainable future, and you're picking up the tab
Illustration by Tim Teebken

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 bottom of the ninth. Two strikes. Two out. Bases loaded.

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

See a larger version of this week's cover.
Cover illustration by Tim Teebken

His nemesis this evening is Phillies closer Tug McGraw, whose fame will later be overshadowed 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 the fall of 2012. Marco Scutaro cracks a tenth-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 tuned 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 The Big Bang Theory will pummel it by 5 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 2 million viewers.

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

Last October's contest marked the seventh straight Series to produce record-low ratings. Baseball's defenders have tried to explain the 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 matchup 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 matchup. 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.

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.

"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.

Human nature, however, isn't partial to watching a baseball game three days after it's played. Viewers still want to see it live, even if it means opening their homes to Flo from Progressive.

"Live sports and a few other events, like the Oscars, are still must-see programming," says Maureen Huff of Time Warner Cable, the company soon to be writing those very large checks to the Dodgers.

Advertisers also see sports as the best weapon for reaching young men, who are known to have a special gift for eluding commercial reach. Never mind that baseball's youthful audience has gone AWOL. More women age 50 and older watched the last World Series than did men under 49. But compared to babe cops and reality fare, the game's ratings practically shine.

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7 comments
mekra
mekra

It's weird to reference new media and not take it into account.  MLB.TV delivered 127.2 million streams in the first two weeks of 2009.  It's hard to casually find statistics about the subscriptions last year, but that 127.2 million number was a 136 percent increase from the previous year.  Attendance has also risen steadily at MLB stadiums.  Check out the wiki for record-setting home attendance; most of the numbers are in the 2000s (decade, I mean).  http://en.wikipedia.org/wiki/Major_League_Baseball_attendance_records

You also wrote: "While the NBA and NFL constantly remake rules for speed and action, baseball's last significant change was the designated hitter. In 1973."

That's just plain wrong.  The MLB added a one-game wildcard last year in both divisions and updated several rules before the start of this season--notably a rule on balks, which was certainly imposed to speed up the game.  There's also talk of eliminating the intentional walk.  

That wildcard game drew only 4.6 million viewers--to TBS, which considered it a smash success.  You also make a lot of choice comparisons between a series of games to ratings for a single game championship like the Superbowl, which is especially hard to swallow given how the Giants crushed the Tigers last year.  Lots of people didn't continue watching the blowout, but that's true of any sports event.

You're also wrong about salaries determining championships or the Cubs would have won one by now.  Plus, the Yankees suck this year, and they're pouring money into their team.  The Dodgers are good, but they were beaten by a smaller payroll.  The A's made it to the postseason on a pretty light budget.  And about that "faster route of free agency"--ask the Marlins how that works out.


I just don't think that this editorial was well researched or reported.  

egolterman
egolterman topcommenter

Taxpayers here are picking up 'more' tabs than others paying off Ballpark bonds from hotel- motel tax for 30 years-commitments made by government officials based on inclusion of Ballpark Village. o taxpayers get a cut of all the new parties, banquets and special events revenue the Cardinals are loading into the Ballpark? Will they get a cut out of the beer sales from Phase One-Village?  May be baseball is heading toward a cliff but Cardinals owners cleared $20 million last year. That does not include the increase in value of their stock. And, they keep the ticket-tax revenue? 6 million a year.  Are you kidding me? Mayor Slay-take the sheriff over there, get that money and hire another 100 police officers. Ticket tax revenue is not to be kept by entertainment venues, producers or franchise owners. Make the rounds of all  and get it.

auxarcs
auxarcs

The MLB players union is the strongest and most unified union in sports. They would not sit still for salary reductions. No facts can change their belief in "habeas wampum" which means, "you have money, now give it to me!" Like the auto workers union that insisted, "it's not our fault the company gave us a contract they can't afford", they would rather destroy their business than compromise. I don't see how the ticket prices can go any higher, so MLB will need to go into bankruptcy,  or get the government to bail them out. If the players' union has contributed enough money to politicians, the governent will bail out MLB. The government auto company bailout helped the union by preventing GM and Chrysler from going into bankruptcy court to reorganize their businesses and renegotiate unsustainable labor contracts.

auxarcs
auxarcs

It's true that baseball doesn't draw as big a TV audience than football, but more people play various forms of baseball, softball, wiffle ball, t ball, kick ball, than any other sport. In that sense, baseball is still America's pastime. 

kevinalbright8
kevinalbright8

The author seems to think that merely the price of tickets and beer would skyrocket if TV money decreasaed dramatically. I don't see some sort of epic collapse of baseball, because player salaries would be slashed.  There would definitely be a big struggle, but baseball is not on the verge of falling off a cliff.

egolterman
egolterman topcommenter

@kevinalbright8 Yes and there is no way the City should have given up the ticket tax revenue to them, or the Fox, or now to the Blues. That's pure theft. And with Village a decade late and nothing like what gov officials were 'sold', the County should stop payment on  the Ballpark bonds, and refer the bondholders to the boys in Cincinatti for the payments.

 
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