Posts Tagged ‘TV Contracts’

The MLB’s TV Growth

Monday, April 28th, 2014

The MLB’s most recent contract with ESPN, FOX, TBS, and the MLB Network, taking effect this year, mark a more than 100% increase in profits over the previous contract. Annual payouts to the league jumped from $712 million to $1.5 Billion, a $788 million bump.
Across the networks, more games and special events are now scheduled than ever before. Upon reaching the deal, Commissioner Allan Selig said, “The game has never been more popular… to see the unprecedented and historic commitment these networks have made to televising Major League Baseball for years to come is truly amazing.”

This deal only emphasizes the ever increasing value of TV rights in the MLB. In 1947, Gillette received exclusive rights to broadcast the World Series for $65,000 on TV, while paying out $175,000 for radio broadcast rights. By 1949, TV rights had overtaken radio rights $200,000 to $175,000. In the 1957 season, a 5-year contract agreed to pay $3 million a season to the MLB. The 1984 season marked the first $100+ million season, and by the 50th anniversary of MLB TV broadcasting, contracts agreed to over $500 million a year.

With this near exponential growth in TV right money, one must wonder where it can possibly stop? Many sports fans have already started to take note of the decline in baseball’s popularity as the NFL continues to dominate the US market in sports viewership. However, Major League Baseball is the most popular sport through its regular season, resting almost entirely between the NHL and NBA playoffs and the beginning of the NFL’s regular season. As we saw with the failures of the USFL and ABL, any new league attempting to rise up to overtake TV time of deep-seeded leagues are fighting an uphill battle, and without any major competition through the thick of it’s season, baseball will continue to pull audiences worthy of near billion dollar season contracts.