This week in “Last Week in BizBall”, revised bond rating provides insight into Yankees fortunes, updates on audience numbers for Saturday primetime baseball on Fox and MLB Network, did the Rule 4 draft kill baseball in Puerto Rico?, MLBPA ED Michael Weiner comments on “super twos” and good news for Cards fans in central IL,
- LWIB Standard & Poor’s revised the rating on approximately $1 billion of municipal debt issued to finance the construction of the new Yankee Stadium. (See Bloomberg) According to S&P, business is booming at the new stadium. Darren Rovell of MSNBC picked up on the S&P rating and believes that the Yankees annual revenues are in the neighbourhood of $600 million. Mr. Rovell wonders how much of that revenue the Yankees keep, noting that last season they had a $200 million plus payroll plus paid an approximately $25 million luxury tax bill. Mr. Rovell writes that it is unknown how much the Yankees paid out via revenue sharing but as LWIB noted in May, Rob Manfred, MLB Executive Vice President for Labor Relations, told Harvard Law School in March that the Yankees tab was $140 million. (Mr. Manfred’s speech is available for viewing here)
- The Sports Media Watch blog reported that the second installment this season of Saturday primetime baseball on Fox June 26 again drew a bigger audience than afternoon broadcasts. However, the numbers declined significantly from the first primetime instalment in May and Fox finished last among the “big 4” on the night with the most recent instalment. “The MLB telecast….even drew fewer viewers than an hour-long rerun of America's Funniest Home Videos on ABC.”
- In May the SportsBusiness Journal reported on the initial set of Nielsen ratings for MLB Network. According to Nielsen, during April, MLB Network averaged fewer than 100,000 viewers in primetime. Although MLB Network President Tony Petitti expressed satisfaction with the ratings, the tenor of the report was one of disappointment. “The network’s prime-time and total day viewership place MLB Network behind other single-sport channels like Speed, Golf Channel and NFL Network. Of the Nielsen-rated sports channels, only Fox Soccer Channel averaged fewer viewers in prime time and single day in April.” More recently, Anthony Crupi of Mediaweek provided an update on the fortunes of MLB Network. (HT National Sports Journalism Centre)
From May 31-June 20, MLB Net has averaged 106,667 total viewers in prime, putting it in ad-supported cable’s bottom quintile. That said, in the same period, the 18-month-old baseball outlet outdrew more established single-sport services NFL Network (out of season) and Fox Soccer Channel, while staying within stalking distance of Golf Channel (134,000).
Per Bill Morningstar, evp of advertising sales for MLB Net, the channel never would have agreed to guarantee against Nielsen ratings in only its second season if he hadn’t been so certain about all the upside. “That decision was a very easy one for us to make,” Morningstar said. “We tracked the numbers throughout our first season and that enabled us to not only make the quick jump to become a Nielsen-rated service, but it also allowed us to build out our rate card for this year.”
- LWIB the Mets/Marlins series in San Juan, Puerto Rico focused attention on the diminished popularity of baseball in that country. Jesse Sanchez wrote for MLB.com, “The number of Puerto Ricans in the Major Leagues has steadily declined since the commonwealth became subject to the First-Year Player Draft in 1989, which has fueled a debate on the island.” The impact of the Rule 4 draft on player recruitment in Puerto Rico is very topical given the widespread belief amongst pundits that the introduction of a worldwide amateur draft is a foregone conclusion. (MLB is definitely in favour) A 2002 Emory University Law School analysis of the amateur draft, “U.S. Labor Market Regulation and the Export of Employment: Major League Baseball Replaces U.S. Players with Foreigners” (read in PDF), concluded that the introduction of the draft to Puerto Rico directly resulted in a substantially diminished number of players being recruited from that country. “In the 1990s, Puerto Rico has been the one exception to the increasing number of Latin-born players in MLB, providing declining numbers of players.....The draft again explains this....Teams quickly cut back their scouting and development efforts in Puerto Rico....In less than a decade after 1989, the number of Puerto Rican players signed per year had dropped more than 40%.” With MLB already active on the ground in the Dominican Republic attempting to reform the “buscone ” player development system, the factors contributing to the diminished number of players recruited from Puerto Rico the past two decades is well worth investigating for MLB.
- MLB Trade Rumors contacted MLBPA Exec. Dirctor Michael Weiner for comments concerning the status of the salary arbitration “Super Two” rule in the upcoming CBA negotiations. Not surprisingly, Mr. Weiner notes that neither side is satisfied with the present arrangement.
- Good news LWIB for Cards fans in central Illinois. The State Journal-Register reported that Comcast has agreed to carry Fox Sports Midwest’s full slate of 130 Cards games on their central IL systems. “The new agreement results in Comcast customers being able to see 20 more games than were available in 2008 and 2009.” (HT Fang’s Bites)
“Last Week in BizBall” will return July 19
Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.
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