Money. Money. Money.

Baseball is one of the best indicator of things to come, particularly when it comes to television. While football may have been made for television, television has made baseball unequally equal. This year there will be more money pumped into the game than ever before. Why? It was decided a few years ago, that ‘LIVE’ television was the key to survival for television networks, whether they are broadcast or cable, to fill the 24/7 programming blocks while the world waits for the next resting place for the millions of eyeballs who are moving through the Millennial stage. Traditionally, television was THE place to reach people. And advertisers, as they always do, flock to wherever the opportunity presents itself to get in front of those who would, could or should buy.

Now, television, especially cable network television, is betting on sports, particularly baseball, to attract the eyeballs of the constantly moving population both via legacy standards at home and most importantly digital/mobile platforms. From April through September, for six solid months, baseball will be front and center. No other sport has the completeness of dominant and ever-changing information as does baseball for this length of time. It is every day news and information. And when you throw in March as Spring Training gets underway, television finds itself gearing up. Take October when the World Series is the ultimate goal, you now have eight months of solid baseball.

Baseball has just finished one of its best hauls in its history. Consider this:
Los Angeles Dodgers $150 million annual rights fees (thru 2038)
Philadelphia Phillies $129 million annual rights fees ($2.5-$3.0B 20-25yrs) +25% SSN Philadelphia
Houston Astros $ 60 million annual rights fees
Texas Rangers $ 80 million annual rights fees +10% FOX Sports Southwest (thru 2034)
Arizona Diamondbacks $ 75 million annual rights fees (2016 to 2036) + %of FOX Sports Arizona
Chicago White Sox $ 72.9 million annual (@$450,000/gm. + 40% of Comcast SportsNet Chicago
Chicago Cubs $ 72.9 million annual (@$450,000/gm +20% of Comcast SportsNet Chicago (thru 2019)
LA Angeles Anaheim $147 million annual rights fees + 25% FOX Sports West (thru 2028)
San Diego Padres $ 60 million annual rights fees +20% FOX Sports San Diego (thru 2031)
New York Yankees $100 million annual rights fees ($367 million in 2042 for 49% of YES)
New York Mets $ 83 million annual rights fees +65% of SNY -25 year contract) (thru 3032)
Boston Red Sox $ 60 million annual rights fees +80% NESN
San Francisco Giants $ 30 million annual rights fees (+ percentage of SCNBA. + 30-33% ownership Comcast SportsNet Bay Area)
Seattle Mariners $115 million annual rights fees (purchased ROOT NW worth $100 million/yrx20 yrs) (thru 2030)
Cleveland Indians $ 40 million annual from sale of SportsTime Ohio ($400 million over 10 years)
Detroit Tigers $ 40 million annual rights fees (thru 2017) FS Detroit
Toronto Blue Jays $ 36 million (adjusted annually) Owned by Rogers SportsNet. No expiration.
St. Louis Cardinals $ 14 million (2016) + $35 million (2017) $55 million (2018-2033)
Baltimore Orioles* $ 29 million annual rights fees +87% of MASN
Washington Nationals $ 29 million annual rights fees +13% of MASN fee reset every 5 years
Minnesota Twins $ 29 million annual
Colorado Rockies $ 20 million (expires in 2020)
Tampa Bay Rays $ 20 million (thru 2016)
Cincinnati Reds $ 20 million (Thru 2016)
Kansas City Royals $ 19 million (thru 2019)
Miami Marlins $ 18 million (thru 2020)
Pittsburgh Pirates $ 18 million (thru 2019)
Milwaukee Brewers $ 21 million (thru 2019)
Oakland A’s $ 43 million (opt out after 2023)
Atlanta Braves $ 20-30 million annual rights fees (through 2031) FS Sports South

In 2013, each team also received $25.53 million as part of the National TV Revenue.

In 2014, each team also received $51.67 million as part of the National TV Revenue.

*[MASN] was created as part of the deal that moved the Expos from Montreal to Washington, D.C. to become the Nationals. Orioles owner Peter Angelos opposed the move as an encroachment on the Orioles’ exclusive broadcast and commercial region. [This is different from the dispute between the Giants and the A’s over the territorial rights to San Jose and Santa Clara County.] As part of the negotiated settlement between MLB (which then owned the Expos) and Angelos, MASN was created with the Orioles to own 90 percent and the Nationals to own ten percent. The deal also called for the Nationals to be paid $20 million/year in broadcast rights, although that figure would increase by $1 million every season. In 2011, MASN reportedly paid the Nationals $29 million in broadcast fees and $7 million for its now 13 percent share of the network. No matter. Attorneys for the two teams and MASN have continued to launch attacks and counter-attacks. The Orioles think the MLB-sponsored panel was predisposed to rule for the Nationals because the league stands to gain financially the more the Nationals receive as a rights fee. For their part, the Nationals have threatened to terminate MASN’s license to broadcast their games if the panel’s ruling isn’t confirmed.

The MASN mess may shed some light on Selig’s unwillingness to make a final decision on the Oakland Athletics’ proposal to move to San Jose. He might have feared that any resolution of the territory dispute between the A’s and the San Francisco Giants that involves the A’s compensating the Giants could lead to in-fighting for years down the road.

The MASN agreement also includes a re-set provision by which the Nationals can re-negotiate the broadcast fee structure every five years. Early in 2012, the Nationals proposed that MASN pay between $100 million and $120 million per year in broadcast fees. The Orioles countered at $34 million per year. The two sides have been in protracted negotiations ever since. Former Commissioner Selig asked representatives from the Pirates, Rays, and Mets to mediate the dispute. A resolution was expected over the summer but never materialized and the parties reportedly remain far apart.

But all of this is minuscule to the real power of baseball today.

The power is BAM…short for Major League Baseball Advanced Media. In 2000, Bud Selig, then baseball’s commissioner, created BAM as an in-house IT department for baseball which would be in charge of creating websites for each of the teams and consolidated MLB’s digital rights. His feeling was that by pooling resources, he would prevent the bigger teams from outpacing their smaller market rivals. To keep the division honest and efficient, BAM would operate its own company. All of the MLB teams agreed to contribute a combined $120 million, $1 million each over the first four years, with each taking an equal ownership stake. And this is the hidden gem of baseball…and baseball ownership.

Forget the amount of money a team makes from its attendance, concessions, broadcast TV and radio rights, Regional Sports Network rights or any other form of income,. Today, whether it is ‘Magic’ Johnson as one of the owners of the Dodgers or Mark Attanasio, owner of the Milwaukee Brewers, they both are equal owners of BAM. What is that worth? Fifteen years after it was founded, BAM will have a profit this year in excess of $900 million. Any idea how much that is worth today as an asset on the balance sheet? When you figure it out, just divide it by 30 and you will have figured out how much the owner of a small city franchise in Milwaukee is worth today.

One could say it is all due to Ichiro. When he came over to play from Japan for the Seattle mariners, he was an icon in his country. If you can remember, in those days a corps of press came along each and every day to cover Ichiro. BAM decided to experiment with streaming live audio of his games, giving his followers a way to keep up to speed with all-Ichiro all the time. This led to the league consolidating all of their digital rights within BAM. To secure more funding, BAM made a deal with TicketMaster to provide all of their ticketing functions for a $10 million advance so they could push not only audio but video.

A small company called eCommercial had created and implemented compressed video packages used as attachments for email. This small start-up was at the forefront of video delivery as CBS bought one of the first packages from Lance Hanish (LBC Advertising, now CNA|SOPHIS) who presented the technology to Kelly Kahl (CBS) to promote its first reality program, ‘Survivor’. With Les Moonves approval, on May 24, 2000, the first eCom packages were sent out to a list of email users consisting of editors, reporters, publishers and potential viewers. ‘Survivor’ debuted on 30 May 2000 and finished as the #2 program that season. That opened the eyes for video delivery and changed the world of mass communications.

Before YouTube, on August 26, 2002 BAM produced a broadcast of a Texas Rangers/New York Yankees game. It was streamed to 30,000 fans at only 280 kilobytes per second. To those who do not know, this is like dial-up speed. Broadband was not yet happening. But it allowed, later that Fall, to offer a post-season package for $19.95 which was successful and led to MLBtv in 2003. This provided a most unique opportunity. Because FOX held the rights, the first post season video delivery was only to Europe. This allowed for advancements in geofencing and multi-application delivery at scale. BAM obviously had already leaned of high-compression from the eCommercial technology.

Today BAM has as customers, ESPN (it handled the 2014 World Cup), HBO (it developed HBONow), WWE (Yup. It does the streaming of wrestling), SONY (PlayStation) and the NHL (National Hockey League). It not only handles their streaming but distributes the content.

BAM in 2014 contributed $5 million to each team or $150 million in additional revenue.

Now perhaps major acquisition of talent by several of the ball clubs is understandable. The Arizona Diamondbacks threw open their coffers as their windfall from BAM and their new television contract provided them with the flexibility of bringing in Zach Greinke ($34,416,667/year). San Francisco Giants added Jeff Samardzija ($18 million/yr) and Johnny Cueto ($21,666,667/yr) with the same revenue income. Kansas City Royals resigned Alex Gordon ($18 million/yr) and Joacim Soria (8,333,333/yr). Washington Nationals signed Stephen Drew ($3 million/yr) and Daniel Murphy ($12,500,000/yr). Cleveland Indians signed Mike Napoli. Boston Red Sox signed David Price ($31 million/yr). Chicago Cubs signed Jason Hayward ($23 million/year), Ben Zobrist ($14 million /yr) and John Lackey ($16 million/yr). Detroit signed Jordan Zimmerman ($22 million/yr). St. Louis signed Mike Leake ($16 million/yr). Los Angeles Dodgers signed Scott Kazmir ($16 million/yr) and Japanese pitcher, Kenta Maeda (3.125 million/yr-8yrs). Toronto Blue Jays signed J.A. Happ ($12 million/yr) and resigned Marco Estrada ($13 million/yr). Baltimore signed Darren O’Day ($7,750,000/yr). Seattle signed Hisashi Iwakuma ($12 million/yr).

So, what have the Milwaukee Brewers done? They have signed Eric Young Jr. ($1 million/yr), Will Middlebrows ($1.2 million/yr) and Chris Carter ($2.5 million/yr).

That’s called banking it. With a projected revenue in excess of the 2014 figure of $91.68 million in TV & estimated 2015 BAM revenue coming in the door BEFORE attendance gate receipts, concessions et all, their payroll at present is estimated at $98,089,079. With gate receipts of approximately $65 million (per Mar 2015 Forbes numbers), The Cream City Nine has an opportunity to bring in more than the 2015 estimated operating income of $11.3 million. With an attendance in excess of 2.5 million in 2015 (ranking 13th in MLB) or 31,389, with another hapless season, the average dropped from 34,536 in 2014. With few stars in 2016, the drop of another 10%-20% could be expected. Regardless, the value of the team will be approximately $850 million, should someone want to purchased the club and stop #watchingattanasio.

Today, as it has been since the days of Ban Johnson, John Taylor, Charles Somers, George Vanderbeck, Connie Mack and Charles Comiskey, baseball is not about the players or the fans. It’s all about money.

Play ball!

Did You Know

In his book, ‘Is This a Great Game or What?‘, ESPN analyst Tim Kurkjian wrote, “Baseball is the only major sport in which some of the standard-bearers have been dead for fifty years, and a team that hasn’t played in eighty years, the 1927 Yankees, are still mentioned in casual conversation.”

Recently, at a bar with some friends, the majority of discussion centered around the ‘Did you know…’ friendly betting game. It is a great way to win a beer or two with your friends at a bar, backyard or ball park.

Did you know when the first touring ballplayers went overseas to play exhibition baseball? If you said it was in the winter of 1888-89 you would be correct. That winter a team of baseball’s first All-Stars went around the world promoting the game of baseball and Albert Spalding’s sporting equipment.

Did you know where the All-Stars played? The teams played very competitive games while touring Ceylon (Sri Lanka), New Zealand and Australia as well as Italy, France and England.

Did you know why the 1904 World Series was never played? The 1904 World Series was canceled due to: stubbornness. Yep. John T. Brush, President of the National League champion New York Giants, simply refused to play the returning American League champion Boston Americans, otherwise known as the Red Sox.

Did you know there were triple headers? Although there were common place in the late 1800’s, the practice was a rare one. In the modern era, the Reds and Pirates played in the first (and last) triple header in 1920. The Reds took two of the three games. They are now prohibited due to baseball’s collective bargaining agreement.

Did you know who the first DH was? That would be Ron Blomberg, on April 6, 1973.

Did you know who the first National Leaguers to DH? The first ones to get an at-bat (within minutes of one another) were ‘The Rickey’ Henderson (SD) and Glenallen Hill (SF).

Did you know which National Leaguer hit the first home run? That would be ‘The Rickey’.

Did you know who was the first pitcher to pitch a no-hitter in the modern era? Chick Fraser of the Philadelphia Phillies threw the first no-hitter in the modern era against the Chicago Cubs.

Did you know the score? 10-0.

Did you know how many were in attendance? 1,200 were in attendance.

Did you know, which city has the most dead ballplayers buried? St. Louis has the most dead ballplayers in a single cemetery. An astounding 180 Baseball Players are laid to rest at Calvary Cemetery in St. Louis.

Did you know how many of those guys were Hall of Famers? None were in the Hall of Fame.

Did you know where the most ballplayers are buried on the West Coast? The record for number of baseball players buried in on the west coast belongs to Holy Cross Cemetery in Colma California. No fewer than 55 former major leaguers are laid to rest.

Did you know two players who are Hall of Famers buried there? Joe DiMaggio leads the way, along with teammate Frank Crosetti.

OK, now did you know who the first President of the United States was to attend a major league baseball game? That would be President Benjamin Harrison.

Let’s face it, the last part of the season is like that. But thanks to Mr. Kurkjian, you can play this game all year-long.

Play Ball!

Fate of the Seams

79 have done it in baseball history. 50 of those were in the Senior Circuit. While the game has been played for well over a Century, no Ranger ever did it, including the time as the Senators. No Twin has ever done it, including the time as the Senators. Needless to say, no Senator ever did it. Sandy Koufax is the only pitcher in history to do it three times for the Dodgers. Nolan Ryan, was only one of three pitchers to ever do it twice. And of course as a member of the Hall of Fame, he did it once in each league, the only player to accomplish that feat. Dodgers did it six times. The Yankees did it five times. The Brewers and Athletics are the only teams to have done it four times.

This past Thursday, Milwaukee Brewer, Mike Fiers did it…he struck out all three Dodger batters he faced, Enrique Hernandez, Carlos Frias and Joc Pederson, perhaps the hottest hitter in the league, in the top of the 4th inning. Nine pitches. Three strike outs. 9 pitches, 9 strikes and 3 outs. It is called the ‘Immaculate Inning’.

This obscure stat began on June 4, 1889 when John Clarkson of the Beaneaters struck out Jim Fogarty who led the league in stolen bases (99), Big Sam Thompson, the right fielder who led the league in home runs that season with 20, and the big first baseman, Sid Farrar, of the Philadelphia Quakers in the top of the 3rd in Boston.

The famous names that have done it are impressive. Rube Waddell of the Athletics did it in 1902, Lefty Grove was the other pitcher who did it twice in 1928 for the Athletics. Billy Hoeft of the Tigers did it in 1953. Jim Bunning of the Tigers did it in 1959. Al Downing of the Yankees did it in 1967. Ron Guidry of the Yankees did it in 1972. Roger Clemens of the Blue Jays did it in 1997, Pedro Martinez of the Red Sox did it in 2002. Felix Hernandez of the Mariners did it in 2008. Dazzy Vance of the Dodgers did it in 1924; Robin Roberts of the Phillies did it in 1956; Sandy Koufax did it three times for the Dodgers in 1962, 1963. Tony Cloninger did it for the Milwaukee Braves in 1963. Bob Gibson did it in 1968. Milt Pappas did it for the Cubs in 1971. Bruce Sutter of the Cubs did it in 1977. David Cone accomplished the task in 1991. Orel Hershiser did it as a Giant in 1998. Randy Johnson did it twice, once in 1998 as an Astro and the other in 2001 as a Diamondback. Ben Sheets accomplished the task for the Brewers in 2004.

So where does Fiers accomplishment rank, a portend of the future as a great pitcher or along with the likes of Pat Ragan, Joe Oeschger, Bob Bruce, Pedro Borbon, Lynn McGlothen, Joey McLaughlin, Jeff Robinson, Rob Dibble, Sloppy Thurston, Danny Jackson, Jeff Montgomery, Stan Belinda, Doug Jones and the like.

Only 79 did it. As beautiful as it was, it is a ‘Fate of the Seams’.

Play Ball!