In no particular order, 10 stories to watch in 2009.
THE ECONOMY Ok, there is an order. The economy is #1 and the remainder are relatively trivial. The conventional wisdom that pro sports is recession proof appears ready to be proven wrong. MLB, not unlike all the pro leagues, has been affected. Sponsorships have been impacted (i.e. GM, DHL, Mercedes Benz), ticket prices are static, no major advertisers yet for MLB Network, stalled luxury suite sales at Yankee Stadium and a freeze on salaries and hiring at MLB are indicators of distressed revenues. On the bright side, off season ticket sales are reported as strong, the recent Fitch ratings were also strong, the impending most successful channel launch in cable history – MLBN – and two new NYC stadiums opening in 2009.
Uncertainty about the future of the economy is the story of the off season. The free agent market has seized up as a result. Some baseball writers speculate that free agents will still be available in to July.
Continued economic difficulties would probably result in fewer tickets sold at lower prices (despite the significant press that MLBAM and MLBN attract, tickets are still the largest single revenue source for MLB) and less demand for luxury suites and premium seating. Potentially insulating MLB clubs from continued economic decline are guaranteed national TV deals in to 2013, RSN investments and rights deals, plus revenues from MLBN and MLBAM.
CREDIT Not unlike everywhere, credit is trump in MLB. Credit impacts on player salaries (negatively, clubs regularly borrow to pay players), new stadium developments (negatively), hurts the bottom line of owners servicing debt on their franchise / stadium and makes franchise sales more difficult.
DIGITAL MEDIA RIGHTS BAM controls them and not everybody (John Henry, local RSNs, cable) is happy about that. Is this debate really about revenue sharing?
CUBS SALE A great business soap opera. Politics mixed with criminal investigation (Blago, The Tribune, IFA, ISFA), insider trading (Cuban), bankruptcy, tax avoidance, an awful credit market, one of sports most famous brands (the Cubs) and maybe baseball’s most hallowed ground (Wrigley).
NEW STADIA Darren Rovell predicts that in '09 a proposed new stadium project will fail. A popular and political backlash against public dollars for private stadiums (CitiField and Yankee Stadium bringing much national media attention to the subject), the credit crisis and the greatly softer market for stadium naming rights will be problematic for the Marlins (soon), Rays and A’s. Can you say PSL?
TICKET DISCOUNTING / PRICE INTEGRITY '08 saw increased reports of ticket discounting and we are likely to see a continutation in '09. Yes, discounting works, but how long until “ price integrity “ becomes an issue?
STUBHUB, MLB & RED SOX MLB expects the Red Sox to work with StubHub for their secondary ticketing, all the other clubs do. And StubHub probably thought that when they agreed to provide secondary ticketing for MLB that that agreement included Red Sox tickets.....but the Red Sox work with Ace Ticket. Will that continue? Is this about secondary ticketing or revenue sharing?
FRANCHISE SALES The sale of the Cubs and Padres is a certainty. How much will the franchises fetch? Some think that the value of professional sports franchises has been bid up to unsustainable levels during good economic times by super wealthy individuals, some who are now in drastically different circumstances. The Mets (Wilpon / Madoff) and Jays (passing of Ted Rogers) might also be in play in 2009.
PLAYER DEVELOPMENT COSTS On average, a club spends $20 million per year on player development. Is MLB attempting to reduce that number? Were slot recommendations part of this effort? Is the expansion of the draft to Latin America part of this strategy? Will slotting be negotiated in to the next CBA (and what will the players receive in return)? Are MLB clubs increasing investments in affiliates as a reaction to rising player development costs?
TV How will ESPN react to MLBN competing with Baseball Tonight? Will there be a political reaction to the accelerating migration of sports to cable from free, over the air broadcast networks? Will government impose a la carte pricing on big cable and what would that do to the value of TV sports programming?
Pete Toms is a staff member of the Business of Sports Network. He can be contacted at