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Baseball's Pitch Aims to Lift National Ratings - Broadcasting & Cable

Baseball's Pitch Aims to Lift National Ratings

MLB sees its 2013 TV game plan-more primetime telecasts, better scheduling and the benefit of earlier playoff preparation-as a potential revenue home run
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The football season ended in a rousing Super Bowl win for
the Baltimore Ravens, and for CBS, which brought in 108.4 million viewers for
the big game. Meanwhile, pitchers and catchers are set to report this week for
spring training, an early warning sign that baseball season approaches.

Baseball's national TV ratings were down last season.
According to Tim Brosnan, executive VP, business for Major League Baseball,
getting those numbers turned around is Job 1 in the office of MLB commissioner
Bud Selig, and there are a number of steps that will be taken to reach that
goal.

Despite the ratings story, baseball signed lucrative new TV
rights deals last year, and the sport is expecting record sponsorship revenue
this season. It also produces the kind of content that is ideal for media
companies eyeing the 24-hour sports cable network business.

Brosnan spoke with B&C business editor Jon
Lafayette about baseball's game plan for 2013. An edited transcript follows:

Last year, baseball ratings were down during the
regular season on the national networks, except MLB Network. They were also
down during the playoffs and World Series. How will you try to reverse that and
make national games more popular?

We continue to work with Fox to present as compelling a schedule as we can
produce. Some of this is dependent on the markets that get selected well in
advance of the games being televised. Some of this is dependent upon the time
of broadcast. We are moving, in our Fox national package, more and more to more
primetime. Fox is carving out a position of Saturday night primetime sports, 52
weeks a year, on their broadcast network. For 2013, for the first time ever,
we'll [have] eight Saturday nights in a row with Fox with the national game of
the week."

Moving national games to primetime makes a big
difference?

The move to primetime with Fox will boost ratings. [Primetime] ratings have
been for the past two years much higher than the regular-season average. And as
we go into 2014, and this is across the cable packages, we will move from what
we call non-exclusive local blacked-out games to coexclusives and exclusives
where the game is national across the cable carrier. That will also boost the
ratings, because when it's a national game covering the Boston Red Sox and you
don't have the Boston DMA with the Red Sox game on, it hurts the ratings. [Editor's
note: Fox's Saturday-night games last season averaged a 2.1 household rating,
40% higher than the daytime games' average of 1.5
].

What else are you doing?
We're looking at what goes on on the field. Trying to improve the pace of play.
Have an ongoing dialogue [about] things like replay that will become a part of
the broadcast, like it or not. This is Job 1 for us in the commissioner's mind,
right there with keeping our attendance at record levels. So you'll see us
tinkering around the edges but you'll also see these big moves, like moving the
regular season piece to primetime.

Fox, Turner and ESPN have been experimenting with
split-screen commercial presentations. Could that help?

We've been talking to Fox about that. Our first concern is for the viewer, is
for our customer. But hand in glove to that is the sponsors and the commercial
advertisers that support the broadcast and make them available, making the
economics easier for our customers to see all those games. So it's a
combination of continuing to provide the best-produced product on the screen
that we can, and we think we have the best production partners in ESPN, and Fox
and Turner. We have our own network that continues to raise the production bar
for the rest of the baseball production market, MLB Network. We think it has
the best production values of any of the league-owned networks. So we want to
continue to put the best picture and sound in front of our audience, and we
want to make it a compelling platform for the advertisers. So to the extent we
can make a match between servicing our fans and servicing our customers, the
advertising underpinning, that's where we'll net out on that.

How about the playoffs?

In fairness to us, we added the wild card games with what,
three months' notice? The scheduling of that became really, really difficult.
Now with a little bit of lead time, it will be a compact schedule no matter
what, but it is a less compact schedule than it was last year. By that I mean
less days with four games in a day when we're asking a baseball fan basically
to sit in front of a television for upwards of 13 hours, while we're asking at
the same time to consume up to 40-odd games in 30-odd days.

0211 Cover story MLB chart

The NBA guys brag about their
playoffs being 40 games in 40 nights. You don't want too much more than that,
do you?

If we play the maximum number, it's 43 games in 32 or 33 days.

That's a lot to ask.
It's a demand equation that's unrivaled in sports.

Is that demand or supply?
Well, we're demanding of our customers.

But you're supplying a lot of
programming.

Correct. Which, by the way, you can talk about ratings and I'll talk about
demand from the marketplace. I can't let a television discussion go by without
saying that ratings are Job 1 for us here. But the marketplace responded to us
in an awfully good way when we put our packages to market and generated rights
fees that were an increase of 100% from the last deal.

All these new 24-hour cable
networks are springing up?

It's a beautiful thing, isn't it?

And you have a product that
can provide 162 days' worth of programming for a 365-day-a-year network?

It's actually 180 days. It's 162 games in 180 days. And we can supply product
actually for a lot longer than 180 days because we have spring training and you
have the postseason. The greatest value of baseball as content is the density
of the content or the supply we're able to offer. The tonnage that a baseball
season brings, no one can compare. I don't think it's a coincidence that the
growth in the regional sports network side is being driven by baseball because
that's what works for programmers in terms of trying to satisfy the demand of their
consumers.

Given the long-term nature of
the deals you signed with ESPN and Turner and with the support you want to give
your own network, is there still a way to cash in as these new networks roll
out in the short- to mid-term?

No. Our national telecast fortunes are basically set [for] 2014-2021.
Obviously you're talking about the rumors that some of our partners are rolling
out additional platforms during the course of our agreement. We always want to
be good partners with our broadcast partners. They invest a lot of time,
energy, effort and capital with us, so we're always open to discussion with
them. We didn't sell all the national television inventory that we could have,
but that was the decision principally made by our boss, the commissioner. We
think we've struck the right balance between national and local for the time
being, but we're always mindful of what would work for us and what would work
for our partners. So we're always open to discussions about new platforms.

So if a partner like Fox came
out with a national sports network, there might be a way of them putting
baseball on it?

I don't think that's currently contemplated, but Fox has been a terrific --
from Chase Carey to David Hill to Eric Shanks -- we have a terrific long-term relationship
with Fox. We feel like it's been a great home for baseball, so we would always
treat them accordingly.

Speaking of regional sports
networks, you saw what just happened with the Dodgers and Time Warner Cable and
how high these rights have gone. Did you strike your new deals too early?

Do I think we struck our deal too early? No.

But they still seem to be
going up?

Our commissioner, our owners, management at the clubs are very happy with the
deals we struck. Very happy with the terms that we struck. Very happy with the
partners that we were able to continue in business with. Very happy with the
fact that we were able to significantly strengthen the programming that we are
putting on our own network. No, we think we made our deals at the appropriate
time.

Again, looking at the local
side, do you think these rates can keep going up?

I don't have a crystal ball on that one. I'm not close enough to the local
markets to give you a knowledgeable opinion.

How does digital factor into
the TV equation? Is baseball still holding onto a lot of the digital rights, or
are some of those rights going to the various broadcast partners?

The answer to that question is yes and yes. Baseball is still holding
onto a great deal of its digital rights. We have a very successful digital
business in MLB.com. But the TV partners made it clear that in the
direction that the media environment was moving, that in order to strike the
deals they wanted to strike with us there had to be digital rights. They had to
be prepared to present a TV Everywhere platform to the cable distributors.
Period. End. That was a sine qua non in the negotiations, if you will. In fact,
to the partner, including the partners that didn't end up with our content,
everyone stated at the beginning we have to be able to offer a TV Everywhere
package against the rights that we're purchasing. On top of that, they also
bought additional digital rights in the form of highlights and ancillary
programming in their packages, which again baseball was developing on its own,
had developed on its own and continues to own a great deal of on its own, but
kind of allowed some of that supply to go over to the third-party suppliers.

In the new contract, is there
more flexibility in the schedule, allowing your national networks to switch
games at the end of the season when the pennant races heat up?

Yes. There is more flexibility anticipated starting in 2014. And by the
way, there's flexibility in the current agreements. It's just not as pronounced
because there aren't exclusive Sunday-night games or exclusive Monday-night
games that are singular and stand-alone. Our national games are promoted against
a regional offering. There are three or four regionalized games, and they get
changed out from time to time under the current circumstances. But in the deals
going forward, particularly as we come into the pennant race portion of the
season, we're trying to build in as much flexibility as we can there so we
could put the most compelling games on the air in the build-up to the
postseason.

How's the market looking at
this point in terms of sponsors returning?

Robust. During the course of last year, we renewed four of five of our existing
sponsor partners. We're on the precipice of renewing another key deal. We made
a huge extension with Anheuser-Busch. We're very happy about continuing that
partnership. Chevrolet was renewed several years ago and continues to be one of
our biggest advertisers and the partner that does the most on the ground
promotionally. MasterCard and Taco Bell also signed renewals recently with us.
T-Mobile just signed a groundbreaking wireless communications partnership with
us where they're going to have on-field presence with a new wireless
communications system that they built specifically for baseball. And so I think
we have the chance of 2013 being a record year in sponsorship for baseball,
both on the financial end and the activation side.

Anything new on the production side? Will
producers have extra access to make games more compelling?

We have our production meetings in about two weeks. I would tell you though
that for baseball, the continuing and newest and most innovative frontier for
the next little while will be sound. We've made great advances in getting
people inside the game with sound but we've only scratched the surface. In
cooperation with the Players Association and the umpires and all the interested
parties, I think sound is still a fascinating part of the game where there's a
lot of opportunities to bring the fans closer to the game through sound and I
think that's where you're going to see more envelope pushing and more exposure
into exactly what's going on down on the field for the fans.

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