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Pete Toms Article Archive
Written by Pete Toms   
Monday, 04 April 2011 13:30

Last Week in Bizball by Pete Toms

This week in “Last Week in BizBall, is baseball a dying sport?, update on MLB Network, MLB still deadlocked over “in market” streaming, the rollout of Fieldf/x, plus tidbits.

IS BASEBALL A DYING SPORT?

Commissioner Selig recently predicted that MLB would see a year over year increase in attendance this season of 3% to 7%. That is obviously great news for MLB. But, going forward, is MLB’s fan base shrinking? According to this survey conducted in 09, 43% of MLB fans were age 50 plus, the largest percentage in that age group amongst the “big 4“, MLS and NASCAR. 18-34 year olds comprised 28% of MLB fans, the lowest percentage in that age group amongst the aforementioned pro sports. So, where is the next generation of baseball fans coming from? I didn’t bother to look for it but I recall reading in the debate over World Series start times that kids are most likely to become baseball fans if they play baseball and/or attend baseball games. On the former point, there was discouraging news LWIB for MLB. Matthew Futterman reported in the WSJ that kids are abandoning baseball.

..over the last 16 years, numbers for Little League Baseball, which accounts for about two-thirds of the country's youth play, have been steadily dropping. And there are signs the pace is accelerating.

From 2000 to 2009, the latest year for which figures are available, the number of kids aged 7 to 17 playing baseball fell 24%, according to the National Sporting Goods Association, an industry trade group. Despite growing concerns about the long-term effects of concussions, participation in youth tackle football has soared 21% over the same time span, while ice hockey jumped 38%. The Sporting Goods Manufacturing Association, another industry trade group, said baseball participation fell 12.7% for the overall population.

The kids who are playing baseball appear to be increasingly from the ranks of more prosperous families. Again from Matthew:

The only growth in youth baseball participation since the 1990s, according to the NSGA, has come from kids who play more than 50 times a year—which suggests more children who play baseball have chosen to specialize.

Lance Van Auken, Little League's spokesman, said baseball seems to be morphing into a more-structured year-round activity that requires expensive lessons, equipment and travel. "

On that same theme, LWIB, Joshua Robinson reported in the WSJ on the burgeoning business in NYC of private pitcher tutoring for kids.

More youth pitchers between the ages of 8 and 18 are seeing private pitching tutors than ever, according to college coaches and several instructors in the New York area. And with parents prepared to spend in excess of $50 for every 30 minutes that an expert spends imparting pitching know-how to their children, it has also turned into a lucrative business.

Mr. Lombardi, for instance, said he sees up to 30 kids a week for pitching lessons at the Baseball Center on the Upper West Side. And John Mangieri, a minor league pitcher turned instructor, said that demand was even greater in the Manhattan suburbs. At his facility in Garden City on Long Island, he works with more than 50 young pitchers a week—a number that was unheard of five years ago, when lessons came mainly from minor leaguers moonlighting in the offseason.

MLB long ago recognized and acted upon the challenge of increasing youth participation in baseball, particularly in underclass communities. MLB’s RBI (Reviving Baseball in Inner Cities) program was established in 89 and has since been aggressively expanded.

SELECT READ MORE TO SEE AN UPDATE ON MLB NETWORK, THE DEADLOCK OVER IN-MARKET STREAMING, THE ROLLOUT OF FIELD F/X, AND THIS WEEK'S TIDBITS

MLB NETWORK UPDATE

This season marks the 3rd for MLB Network. LWIB, Mike Reynolds of Multichannel News reported on the state of the league owned channel (the iN Demand cable consortium and DirecTV are minority partners). Mike tells us that MLBN will broadcast more live games this season, adding an early evening contest on Fridays and doubleheaders on Tuesday nights. The report also looks at the channel’s new studio programming for the season. MLBN debuted in 50 million homes in January 09, a record number for a new cable channel. At the time, Tim Brosnan, MLB’s Executive VP, Business, received many plaudits for ensuring a successful launch for MLBN by sharing equity in the channel with the aforementioned cable and sat partners. Due to reaching 30 new affiliate deals, most importantly with AT&T U-verse (in approx 2.7 million homes), MLBN is now in roughly 57 million homes. (to provide some context, that is roughly equal to NFL Network. Versus is in about 75 million and ESPN 100 million) This winter MLBN head honcho Tony Petitti told Reuters that he hoped his channel would be in 70 million homes this season. Reaching that goal appears to be dependent upon MLBN negotiating carriage on DISH Network (in approx 14 million homes). According to the Multichannel News report, ad sales are strong for MLBN. Petitti told Reuters in December, "We'll have the ability to make distributions in 2011," Petitti said. "That's really up to the commissioner's office as to what form those take and when and what they want to do with that money."

MLB STILL DEADLOCKED OVER “IN MARKET” STREAMING

Major League Baseball Advanced Media (MLBAM or BAM) CEO Bob Bowman addressed the "Video Everywhere: Who's Cracking the Code?" conference LWIB. As Mike Reynolds reports, BAM’s “out of market” live game offering MLB.tv is now nine years old. According to Bowman, BAM expects to sell 1.5 to 2 million MLB.tv subscriptions this season. Bowman acknowledged that BAM continues to struggle with how to bring live “in market” streaming of games to more MLB markets. At present, only the Yankees and Padres have reached agreement with BAM for this offering. Both those deals were reached in 09. MLB had predicted that last season would see more of those deals concluded, but that obviously didn’t happen. “In market” streaming of games is opposed by both local rights holders (RSNs) and the distributors (cable) that carry those channels. Last year, Fox Sports Net was reportedly close to cutting a deal with the NHL over “in market” streaming. According to the report, BAM is in negotiations with FSN for the same. Bowman is quoted saying that the FSN deal might result in “in market” streaming being expanded to 13 teams.

The dispute within MLB over who should control local digital rights (BAM or the clubs) is several years old. Clubs which also own a team centred RSN have typically been the most vocal about wanting control over those rights. We saw that again recently when Red Sox Chairman Tom Werner said at the World Congress of Sports, “As everybody knows, there is a stalemate right now … in terms of in-market streaming,” Werner said. “In-market streaming is good for the customer. But from our point of view, it has to be done in conjunction with our RSN and our affiliates, such as Comcast and Time Warner, in such a way that the product being offered to the consumer is complementary rather than competitive with the games that are on satellite and cable.”

THE ROLLOUT OF Fieldf/x

LWIB, Bloomberg published a very thorough and informative piece by Ira Boudway on the present and future of fielding metrics. According to Ira, the soon to be MLB wide installation of “motion-capture” system Fieldf/x will result in the obsolescence of contemporary (and rudimentary) fielding metrics. Fieldf/x was installed at AT&T Park last season and this season will see it in use at Yankee Stadium, Petco Park, Tropicana Field and Kauffman Stadium. If all goes according to plan, Fieldf/x will be league wide for the 12 season. Fieldf/x, like Pitchf/x, is a partnership between Major League Baseball Advanced Media and Sportvision. I’m not interested in advanced statistical analysis per se (I am interested in the broader conclusions and how that impacts the valuations of player skill sets) but I will be following the debate, already under way, over who should have access to the Fieldf/x data. Some believe the teams should hoard the data and others believe it should be made public for all the stat analysis community to use. (I.E. two of MLB’s most prominent “propeller heads”, Tom Tippett and Tom Tango, are on opposite sides according to Ira) Reading Ira’s piece I was reminded of the war between Bill James and Seymour Siwoff over access to Elias’s data which Alan Schwarz chronicled in “The Numbers Game”.

TIDBITS

  • Fran Spielman of the Chicago Sun-Times reported on the state of negotiations between the Cubs and Mayor-elect Rahm Emanuel over public investment in a renovation of Wrigley Field. Emanuel has spiked the same Cubs proposal to fund the reno with proceeds from future amusement tax growth that his predecessor rejected. So, it appears that Cubs owner Tom Ricketts is back to square one. Fran speculates on some possible options:

The short list includes: modifying the amusement tax plan to give the city some growth; creating a tax-increment-financing district around Wrigley; using historic preservation tax credits or broadening the boundaries of a one percent tax on downtown restaurant meals….

Another, more controversial idea is the sale of personal seat licenses, similar to ones sold at Soldier Field that helped provide the Chicago Bears’ contribution to their taxpayer-supported stadium.

  • In January I noted that the A’s and Cardinals had joined the White Sox, Astros and Giants in the group of MLB clubs using “dynamic pricing” of ticket inventory. The trend continues with the announcement that the Twins are using “demand-based” pricing for some sections of Target Field this season. TicketNews.com has the press release announcing that the Twins are working with Digonex Technologies. I’m not absolutely certain but I think the Twins are the first club to cut a dynamic pricing deal with a provider other than Qcue. Please email me if I’m wrong.
  • TicketNews.com reported that, “Gold Coast Tickets, one of Chicago's largest secondary ticket companies, has signed a sponsorship deal with the Chicago White Sox at U.S. Cellular Field that calls for a section of premium seats behind home plate to be renamed the "Gold Coast Tickets Club." The deal is reminiscent of the Red Sox deal with Boston based secondary ticketer Ace Ticket. According to the report, this is a multi-year deal with the possibility of Gold Coast eventually becoming a secondary ticket provider for the White Sox. That might get complicated given StubHub’s deal with BAM.
  • For several years, Jorge Costales has been deconstructing the finances of the Florida Marlins. Jorge lives in Miami (I couldn’t find the word for one who lives in Miami) and his interest in the subject arose from wanting to know if Marlins owner Jeffrey Loria truly couldn’t afford to invest more money in Marlins players and also if he required public investment in a new ballpark to make MLB in Miami a viable and sustainable proposition. Jorge is also a CPA which lends credibility to his analysis of the Marlins finances. In light of the recent annual Forbes’ valuations, Jorge updates his numbers on the Marlins profitability and also includes a retrospective on Loria’s years of MLB ownership. Jorge’s research and conclusions do not portray Mr. Loria in a positive light. Great stuff, you can read it here.
  • MLB’s digital cable “out of market” offering, “Extra Innings”, is available as part of a “freeview” until April 10. See Mike Reynolds at Multichannel News.
  • I live in Ottawa, former home of Triple A baseball. 07 was the last year for affiliated ball here, followed by one year of independent baseball. The local pols will soon begin discussing the fate of the 10,000 seat ballpark. Ken Gray reports that there is a real possibility that a Blue Jays affiliate will move here. I think Ken is wrong but I would be thrilled if he isn’t. The current PDCs between major league clubs and their affiliates expire at the conclusion of next season. 2013? I can dream…
  • The sale of the Frederick Keys of the High A Carolina League is evidently close to being concluded. Whether or not the sale closes depends on whether the owner can negotiate a lease for the stadium. Sale price is reportedly $9 million and you should read Ballpark Digest.


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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