MLB.com Revenue Levels the Playing Field

MLB.com Revenue Levels the Playing Field

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The after project profits are split evenly by all 30 MLB teams. This could very well be a reason that smaller market teams are now able to compete in the free agent market. On the negative side, the revenue gained by MLB.com, XM Satellite Radio & TV contracts also allows smaller market teams like the Pirates and Marlins to “mail it in”. That’s a topic for another day, let’s go back into the gains of MLB.com.

The site is operated and constructed by MLB Advanced Media (MLBAM), an arm financed and owned by the 30 MLB clubs. The CEO of MLBAM, Bob Bowman, shares the following statistics from the past 2007 season;

  • 8 – 10 Million Visitors per day
  • Over 500,000 live game package subscribers ($80 – $120 per season)
  • Approximately 27 million of 80 million tickets were purchased online
  • A large increase in merchandise sales through team stores
  • For the 2008 season MLB.com will offer high definition feeds (HD is available on any LCD monitor with a high speed connection) and increased cellphone content options.

    With IT capabilities such as bandwidth delivery becoming cheaper by the day, MLB.com should be able to increase their content quality while maintaining high margin levels. I personally signed up for the season package last season and I will undoubtedly do so again this upcoming season. With the future clearly headed towards multimedia TV setups in living rooms nation wide, MLB.com will become one of the most important revenue streams for the league in 2008 & beyond.

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    has written for mopupduty.com since 2006. Follow Matthias on Twitter, Facebook and Google +

    • This is really interesting. Kman, you and I have spoken about alternate ways of sharing operational costs before. I wonder where the limit is to this. NFL teams don’t even have to play in stadiums to make $$$. However, would this ever get to a point where teams with small US national market (toronto, pitts, colorado) would ever prefer to have Yanks, RedSox, Mets, Cubs to be successful (for business purposes) to make more $$ off of their huge national market?? Toronto vs Colorado on mlb.tv would be a fininacal disaster compared to Yanks vs Dodgers. the $12 isn’t enough to make a huge impact on middle of the pack teams.

    • I would defiantly think that the bottom feeders with low payrolls love the success of the big market teams. That success will add up to higher TV ratings, greater road attendance and increased MLB.TV revenue, all of which will be shared in by the Pirates & Rays of the world. To be far, only a few teams out there have been stagnant in terms of payroll or system improvements. Coming to mind would be the Pirates in the #1 slot. The Rays seem to have a plan, the Nationals have stepped it up this off-season and the Royals are starting to spend money. The Marlins have a system of restocking prospects for late 20’s talent, so I may include them with the Pirates in the half-assing it department.

      I don’t see an excuse for having a bad club on an annual basis these days. We’re not talking about the old Browns days, where players were locked up. Now we have free agency, foreign leagues & their players, latin america prospects on the cheap and the now stocked MLB drafts.

      Revenue sharing gives the teams the $$$ to compete. I assume some choose not to, rather pocketing the cash.