Five Hundred and Fifty Million Divided By $1.5 Billion Equals What?

The average daily television viewership for baseball during the regular season averages approximately 3,394,000 viewers. Most of this is watched on local regional cable networks which bring America’s pastime day after day, night after night, April through the first weekend of October. In total, not including the games televised on MLB, ESPN, FSN1 or FOX, the average Major League Baseball Team has between 19,000 viewers (Oakland A’s season average) and 929,000 viewers for the Toronto Blue Jays. The mean average is approximately 113,113 viewers per evening for the home team. Actually, only seven teams draw above that line while many of the rest are well below that mark. But the point is, there are a lot of people watching baseball daily in North America in the summer.

While Oakland, Milwaukee and San Diego are at the bottom of the viewership barrel, all with under 30,000 average daily viewership, Toronto, the Mets, Yankees, Cubs, Red Sox, Tigers, Giants, Royals, Indians, Rangers, Cardinals and Mariners all draw above 100,000 per game, with the Mets above 200,000 per game. 3,394,000 viewers on a daily basis is a lot of eyeballs. More importantly, these are loyal eyeballs watching horsehide meet hickory day in, day out.

So what’s it cost to reach these people?

For those who are in the game of reaching masses to get their product and/or service in front of their target audience, they spend $9,796,296.30 per day to reach 3,394,000 viewers multiple times per game. This past year. But with long term contracts expanding into as much as 30 years, the cost per thousand will drop dramatically. And remember, these are all visual rights fees, not just TV but also digital/mobile.

What sponsors are banking on is the ‘live’ value of television in the 21st Century. Most know that ‘live’ events are like gold in a day when viewers have many ways of watching their events. But what does it mean to take a gamble like this long term with one medium that is decreasing viewership year after year in a new digital/mobile age?

To a baseball fan, MLB provides all of the action and stats one could dream about. This is a league that has a commanding lead in digital/mobile live events useage. For instance, if Ryan Braun comes to bat with a runner on first and second with one out in his second time against Jake Arrieta, as a fan you can get the statistical history of both the hitter and the batter in this situation. Knowing full well that Braun has faced Arrieta 18 times this season, walking 3 times, striking out 3 times and 7 hits, he has 2 home runs and 7 RBI. The chances of Braun getting a hit are good, he is batting .309 with runners in scoring position batting in the 3rd position with an OPS of .917. Arrieta will probably throw a sinker on the first pitch, low and away for a strike. But with Braun 0-1, he is hot, having a .488 BA with an impossible 1.482 OPS. Playing ONs-ONs, you bet your quarter on #8.

So, television rights are not the only investment sponsors are paying for now. It also includes digital/mobile sponsorship within those rights fees. And that bodes well for them deep into their contract.

Let’s take a look back 30 years ago. In 1986, the average ticket price was $10.18. The television revenue was $527 million. In 2016, the average ticket price was $31. What is interesting about this is that the price of a ticket is 3x what it was 30 years ago. The television rights fees are 3x what they were 30 years ago. So…it assumes that in 2046, the ticket price will be 3x what it is today which would mean that it would cost $93 per ticket on average in 2046. And, the television rights fees would remain at $1.587 billion. In 1986, MLB was paid $141 million with an attendance of 47,506,203. In 2016, the collective MLB package for all-visual viewership rights fees (that includes digital/mobile/TV) was $12.4 billion with an estimated 1.01 billion viewership. If everything is 3x what it is today in 2146, the TV rights fees will remain the same for whatever the growth in the sport will be.

Here is a complete look at each individual team in 2016, TV Ratings, average TV Ave/Gm viewership, 2015 Regular season rating, home and away attendance, +/- 2015 attendance, time of game, total attendance, 2016 TV Revenue per team, TV deal per team, start and end date of TV contract per team, Club ownership of TV deal, MLB’s Central Fund and the 2016 cost for 2 people to attend a game per club. Enjoy.

So, what does all this show us?

The rich get richer and can afford the best players. The poor get poorer but make their owners a ton of money.

Play Ball!

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