RELATED: Buyers See Value Play in MLB Commercials
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 splitscreen 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.
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.