Guest Blog: Baseball's Coming Media Revenue Crisis

MLB television and franchise revenues will start eroding because the sport lost the young demo
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Robert D. Manfred Jr. is getting ready for the start of his second season as Major League Baseball commissioner, with the start of games that count little more than two weeks away. When he took the MLB's top post in January 2015, succeeding Bud Selig, he inherited a thriving legacy in many respects. Revenues have soared from $1.4 billion in 1995 to now more than $9 billion. MLB Advanced Media is the best digital operation in all professional sports, hands down, not to mention its work creating tech backbones for HBO Go and a host of other OTT ventures. There are plenty of new stadiums and top franchises are worth billions, so things are peachy, right? 

Actually, not. MLB is headed for long-term financial disaster, one that owners brought upon themselves.

The problem is that MLB has lost young TV viewers, and the problem is going to get much, much worse. As these trends continue, they will lead to the loss of its major advertising customers, and inevitably a decline in the value of TV rights, and the franchises themselves. While baseball was easily the most popular sport both to watch and play in the U.S. from the time of the Civil War through the early 1960s, interest in baseball has been eroding for decades, and if current trends are not reversed, by 2030 it will be sheer nostalgia to recall when the game was our “national pastime.” For 40 years, the stewards of the game have traded away strategic value for short term financial gain. The problem is fixable, and there is a silver bullet, but MLB is running out of time.

Older Audiences Worth Less Money to Advertisers

The average age of someone watching baseball on television is 55, and it keeps getting older. In a decade MLB will be like Fox News, whose average viewer is 67. There will be severe financial consequences. Advertisers are willing to pay much more money to reach younger audiences than retirees, and baseball sponsors typically want to reach males ages 18-49, the so-called “buying demo,” because younger men are more malleable, spending discretionary income on products like beer; retirees, less so. Some advertisers, like Pepsi and Burger King, seek even younger audiences. Many CMOs measure the health of a brand, in part, by the age of their customers. The value of baseball sponsorships, and the value of television rights, will start dropping precipitously as its television audience ages out of the buying demo. 

Smaller audiences deny advertisers reach, and eventually baseball will arrive at a tipping point. According to Nielsen, through 1972, the share of television sets in use that were tuned into the World Series was about 58%. That number has been consistently eroding since then, and is now around 14%, with no floor in sight. How does this compare to other sports? Super Bowl clocks in at around 70%; the Women’s World Cup and even the NFL Draft could get better ratings than the World Series. Nielsen reports that 16.1 million Americans between the ages 2-17, watched Super Bowl 50 on CBS, yet among this so-called Generation Z, only 929,000 saw the 2015 World Series on Fox.    

To put it another way, more than 17 times more youth watched the Super Bowl than the World Series. Let that sink in. Among Americans under 18 years of age, Super Bowl ratings were 1,733% higher than the World Series. Kids who never watch the World Series as kids, will not start watching when they become adults; extrapolating to 2032, World Series ratings in the 13-34 demographic will be close to zero. You don’t need to be a genius to predict what that does to franchise value.

What Just Happened?             

Roughly 47% of the U.S. population lives in the Eastern Time zone. Cities where baseball is still more popular than football include large media markets like New York and Boston, where, in theory, World Series ratings should always be high. The reason that kids under 18, school children, don’t watch the World Series is that the games are played too late for them to watch. While the Super Bowl starts at 6:30 p.m. on a Sunday, and ends before bedtime, the World Series is often being played after midnight on school nights, many games even after 1 a.m. The shift to exclusively very late night starts, by itself, ultimately culled the young fan base.

The decline in the World Series television ratings share coincides with the shift to playing at night in the 1970s. And the ratings share ultimately got even worse as even the weekend games were also moved to nighttime, and night games were pushed back to even later starts, from 7 p.m. to after 8 p.m. While MLB made more money tactically, the tradeoff was to keep losing more young fans, who grew up to watch football instead.                

I coach a travel team of 12-year-old boys, who play 80 baseball games a year. Many of them openly talk of playing college baseball, and making the major leagues. It is stunning that even they do not watch the World Series at all, unless our hometown Yankees or Mets are in it. Parents do not let schoolboys stay up after midnight on school nights. Ironically, these diehard baseball players all watch the Super Bowl, every year.  

And games ending at 1 a.m. is not just a problem for schoolboys; it’s also a problem for people with jobs, too, who are only willing to stay up that late if their hometown team is playing. Indeed, the very late World Series start times has been a catalyst, and cause, in reducing the viewing audience to mostly just local markets.

The Silver Bullet 

Here is a simple solution: Play the World Series on weekends only and start the games earlier. Open the World Series on a Friday night, then Saturday and Sunday in the late afternoon at 6:30 p.m. ET. Play Games 4, 5 and 6 on the following weekend on the same schedule. In the case of those years where the World Series does go to a Game 7, play it on the following Monday night, but starting at 7:45 p.m.   

Ratings would soar. Families could watch it together again, and watching the game could be a shared viewing experience. Most years the series would be entirely on weekends, and in years where a Game 7 was necessary, take comfort in that Monday nights generally have higher TV audiences than other weeknights, which is why the College Football Championship is played then.

An aggravating factor in the decline of baseball’s young audience is cord-cutting. Already many U.S. households have either canceled cable or satellite TV service, or never had it in the first place, preferring online video, and this number is climbing, especially with Millennials and Gen Z. Any strategy to save the World Series must include streaming it to young people who do not have an MSO subscription. While there are tactical tradeoffs, the cord-cutting trend, if left unaddressed by MLB, will soon accelerate the chronic World Series ratings erosion, and make the audience skew even older, even faster.

Shorten Games, Reduce the Ad Load                          

MLB must also implement more rule changes to shorten the games; everybody knows that. Players practically dress and undress themselves after stepping into the batter’s box, and fans are sick of that. MLB should also reduce the advertising load, stuffing in extra commercials theoretically makes more money, but the longer game time decreases ratings, too. So it’s a downward spiral. A larger audience and younger demographic would command higher advertising rates, and make up revenues lost—offer fewer ad units, but charge more. Create scarcity.          

Professional baseball has not shown respect to its younger fans. Move the World Series to a time when they could actually watch it, and they will grow up to be baseball fans. However, if MLB keeps playing the World Series past midnight on school nights, then TV ratings and revenues are headed for doom. Gen Z is the future. Goodspeed to Manfred—kids grow up fast.      

Joe Mohen is a digital media entrepreneur, most recently serving as CEO of Nylon Magazine. He played baseball at Johns Hopkins University, and has coached for 30 years in Little League and travel baseball, as well as in Major League Baseball’s Revive Baseball in Inner Cities (RBI) youth outreach program.

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