Fallen Classic? Baseball Wishes You’d Watch the World Series, But Will Still Stay Rich If You Don’t
The overnight Nielsen ratings for Game One of the World Series between the Giants and Royals came in at about a 8. That’s way down from last year’s 9.4 for the first game of the Red Sox-Cardinals Series, which in turn was way down from when the Sox and Cards met in the 2004 Series, and so on back in time as far as one cares to go. The championship of our national pastime has seen its television audience decline almost every year since the last time the Royals were in the Series in 1985.
The lower ratings will cause some commentators to state the following. Baseball is declining in popularity, especially among young people. Baseball faces serious economic jeopardy. And it’s death for the sport when it has “small market’’ teams like Kansas City in its showcase event.
Those three sentences are utterly wrong. Major League Baseball has its pride, and that pride is hurt when people don’t tune in for the season’s grand finale. That’s all that gets hurt, though. The sport’s bulging wallet isn’t touched. In fact, the lower ratings are a byproduct of successful steps to monetize HOW its fans consume its product.
“Low’’ is a relative term. On TV, the Series was competing against “Forever’’ and “Marry Me’’ last night, not the Super Bowl. Fewer people watched the World Series than did last year, but among adults 18-49, those same overnights had Fox as the highest rated network for Tuesday, October 21 by a significant margin.
But of course the baseball doomsayers, who have been around since I watched my first game in 1956, are comparing the Series to the Super Bowl, and baseball to the NFL. They don’t recognize that not only are baseball and football different sports, they are different kinds of television shows generating two entirely different revenue streams.
The NFL is the most old-fashioned kind of television show there is, the long-running broadcast network national hit. It is “NCIS,’’ except watched by younger dudes instead of seniors. It’s been a hit since the early 1960s, so its original dude audience are now seniors themselves and they watch, too. It’s not too strong to say pro football is the last of the great network hit shows, the program everybody in America watches all at once. This has made the NFL an astonishingly profitable business. But it’s also dependent on its ratings to stay that way. National TV money is the lion’s share of the league’s income and has been for decades.
Baseball spent futile decades trying to mimic football’s broadcast model. At some point in this century, the sport wised up to itself, recognized that would never happen and recast itself as a cable television show. It’s “The Walking Dead,’’ or maybe “Law & Order’’ reruns would be a better comparison.
Baseball’s appeal is local, not national. Fans root for the home team and to hell with the other ones. I’m sure the Game One ratings were at Super Bowl levels in the Bay Area and Kansas City. Accordingly, national broadcast revenue doesn’t mean nearly so much to the sport’s also astonishing prosperity as do its regional cable TV income and, talk about old-fashioned, revenue from its live studio audience at the ballpark.
Baseball’s national TV deal which runs from 2014 through 2021, provides roughly $50 million annually for each of the 30 franchises in the Majors. That’s twice the revenue of the sport’s previous national contract, and that increase came about precisely because the sport sold itself as cable television programming. ESPN has baseball. Turner Broadcasting has baseball. And Fox may be showing the World Series over the air, but it’s paying to acquire baseball regular and postseason games for FoxSports 1, its cable network so new most viewers don’t know which channel it’s on in their system.
Fifty million bucks is a respectable sum at any level of finance. It’s just one-third of what the Red Sox gained from ticket sales alone in 2014 (attendance of 2,956,000 times average ticket price of $51). It’s one-fifth of what the Dodgers got from their cable agreement with Time Warner Cable.
Sweeter still is the deal for teams that own their own networks, as the Sox do with NESN. Cable networks don’t make money from ratings. If they did, cable news would not exist. Local cable systems pay carriage fees, a set sum for every customer who gets wired up. Every system in New England has NESN in the basic package. Ergo, cable customers make money for the Sox whether they watch the team or not. Top that, Roger Goodell!
Those fundamentals of baseball economics are why while World Series ratings would be higher if the Red Sox were in the Series this year, the sport as a whole will make more dough from the Royals being there. Try as they might, and boy are they, the Red Sox and Yankees have more or less maximized the amount of profit they can wring from their fan bases.
The Kansas City franchise has room to grow. The Royals sold only 63 percent of their available tickets this season, both home and away. If that goes up to oh, 85 percent at home and 75 percent on the road in 2015, the bottom lines of all 29 other teams will see a nice bump. The Royals are stuck with a poor (if you call $20 million a year poor) cable deal until 2019, but I have a feeling negotiations for that next contract may have begun in the owner’s box last night.
Major League Baseball may not be as culturally dominant as it was when men wore hats, but it’s never been more profitable since it decided to stop emulating the NFL and just be itself. And besides, in popular culture, ratings aren’t everything.
What has more buzz these days, the networks or cable?
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