The base­ball busi­ness comes to town

Amer­ica’s Ma­jor League Base­ball kicks off its 2014 sea­son with games in Aus­tralia next month. It’s part of a push to glob­alise the busi­ness and seek out new talent. But will it work?

The Australian - The Deal - - News - Story Justin Burke l Pho­tog­ra­phy Jon SooHoo

When the Los Angeles Dodgers play the Ari­zona Di­a­mond­backs at the Syd­ney Cricket Ground next month, Aus­tralians will get a glimpse of the multi-bil­lion-dol­lar busi­ness that is Ma­jor League Base­ball.

The Aus­tralian start to the open­ing se­ries of the 2014 North Amer­i­can base­ball sea­son, timed

to cel­e­brate 100 years since base­ball was first played at the SCG, is part of a mar­ket­ing cam­paign byMLB to broaden its in­ter­na­tional im­age.

Sev­eral pre­vi­ous sea­sons have kicked off games in the much larger base­ball mar­ket of Ja­pan, but the two Aus­tralian games are part of a move to boost lo­cal enthusiasm for the sport, which is run by Aus­tralian Base­ball League, a 75 per cent owned sub­sidiary of MLB, un­der a deal set up four years ago.

Base­ball has never been big in Aus­tralia, but in North Amer­ica, where MLB has 30 teams, in­clud­ing fa­mous names such as the New York Yan­kees, the At­lanta Braves, the Chicago Cubs, the San Fran­cisco Gi­ants, the New YorkMets, and the Oak­land As, Forbes mag­a­zine es­ti­mates that Ma­jor League Base­ball will gen­er­ate to­tal rev­enue of more than $US8 bil­lion this year, largely thanks to lu­cra­tive tele­vi­sion rev­enue deals.

Other rev­enue is gen­er­ated from spon­sor­ships,

mer­chan­dis­ing and the businesses as­so­ci­ated with sta­di­ums and land owned by the in­di­vid­ual teams and, in the case of big teams such as the Dodgers, lo­cal me­dia deals. “The glob­al­i­sa­tion of our game continues to be para­mount to Ma­jor League Base­ball, and Aus­tralia is an es­sen­tial part of our long-term ef­forts to grow the sport,” says MLB com­mis­sioner Al­lan H. (Bud) Selig.

The two Aus­tralian games, on March 22 and 23, will bring to­gether the fa­mous Dodgers — which were sold for a record $US2bn two years ago and boast some of the high­est-paid play­ers in the coun­try such as Zack Greinke and Adrian Gon­za­lez— and the lower-rankedDi­a­mond­backs, which were bought by Ari­zona busi­ness­man Ken Ken­drick for $US238 mil­lion in 2004.

Aus­tralianBase­bal­lLeague chief ex­ec­u­tivePeter

Wer­muth says MLB is for­go­ing ma­jor prof­its by com­ing to Aus­tralia in­stead of Tokyo. “The sim­ple ex­pla­na­tion is that they fore­see mar­ket growth for base­ball in this coun­try,” says the Ger­man-born for­mer player, coach andMLBex­ec­u­tive.

Wer­muth says the SCG built in dugouts in Fe­bru­ary last year be­fore MLB had com­mit­ted to com­ing in a bid to get the games. “They took a punt and sent a very strong mes­sage,” Wer­muth says.

Next month’s games are timed to mark the 100th an­niver­sary of ex­hi­bi­tion games played at the SCG by the ChicagoWhite Sox and the New York Gi­ants in 1914. (The White Sox de­feated the Gi­ants, 5-4, be­fore 10,000 fans.)

“Base­ball has been played in Aus­tralia since 1856; it was played here as al­most as early as it ever was in the US,” says Wer­muth.

David Smith, from the US Stud­ies Cen­tre at the Univer­sity of Syd­ney, ex­plains that base­ball’s cre­ation was a re­sponse to the slow­pace of cricket.

“Base­ball was de­vel­oped partly be­cause five-day cricket was im­prac­ti­cal for work­ing-class people in in­dus­trial cities. People needed a much shorter and faster game,” he says.

Syd­ney-based sports scholar Bra­ham Dab­scheck, and au­thor of Read­ing Base­ball: Books, Bi­ogra­phies and the Busi­ness of the Game, pub­lished in 2011, says en­cour­ag­ing the game in Aus­tralia could also de­velop a greater po­ten­tial pool of new play­ers for MLB in the US. MLB has re­cruit­ment acad­e­mies in Latin Amer­ica but Aus­tralia pro­vides an­other source of tal­ented new play­ers who would adapt eas­ily to the North Amer­i­can en­vi­ron­ment, Dab­scheck says. “The name of the game is get­ting top ath­letes,” he says.

So far 31 Aus­tralians have played in MLB with hun­dreds more Aus­tralians play­ing in Mi­nor League Base­ball in the US. TheAus­tralian

“We have more ath­letes play­ing pro­fes­sional base­ball than ever be­fore. We are very good at the sport, much bet­ter than many sports that get a higher pro­file in this coun­try

Base­ball League web­site con­tains a list of Aus­tralians play­ing in MLB un­der the head­ing “Aussies Chas­ing the Dream.”

Syd­ney-born pitcher Grant Bal­four had a twoyear $US8m con­tract with the Oak­land As, which

fin­ished at the end of last year. A two-year deal to play with the Bal­ti­more Orioles for $US15m fell over at the last minute, in De­cem­ber, with the

Orioles con­cerned about his fit­ness. He has since signed a two-year deal for $US12mwith the Tampa Bay Rays.

Craig Ship­ley, who was the sec­ond Aus­tralian­born player in Ma­jor League his­tory, mak­ing his de­but in 1986 play­ing for the Los Angeles Dodgers. Also from Syd­ney, he has had 11 Ma­jor League sea­sons in his ca­reer in­clud­ing stints with the Dodgers, theNewYorkMets, the SanDiego Padres, the Hous­tonAstros and the Ana­heimAn­gels.

Base­ball can be a lu­cra­tive ca­reer with top play­ers earn­ing­more than $US20ma year. Dodgers play­ers Zack Greinke, Adrian Gon­za­lez, Matt Kemp and Carl Craw­ford all fall into this cat­e­gory, ac­cord­ing to the web­site Cot’s Base­ball Con­tracts.

In con­trast, the top play­ers with the Di­a­mond­backs, such as Aaron Hill, Martin Prado, Bran­don McCarthy and Miguel Mon­tero, are earn­ing just over $US10m a year, ac­cord­ing to Cot’s.

The game’s top-paid player un­til last month was Yan­kees third base­man Alex Ro­driguez, bet­ter known as A-Rod, who earned al­most $US30m last year. But A-Rod, who is still un­der con­tract to the Yan­kees to the end of the 2017 sea­son, is sit­ting out the 2014 sea­son fol­low­ing a penalty for tak­ing per­for­mance-en­hanc­ing drugs.

More than 74mil­lion people at­tendMLB games in Amer­ica each year. MLB’s in­come has been

sig­nif­i­cantly boosted by a deal with ESPN, Fox Sports and TBS that will pay a to­tal of $US12.4bn to MLB for the tele­vi­sion rights from this year to 2021, al­most dou­ble the amount paid for the last deal, which cov­ered 2006 to 2013. The money from the na­tional TV deals goes into the MLB’s Cen­tral

Fund which is dis­trib­uted equally to all 30 teams.

But teams, par­tic­u­larly top teams in big cities such as LosAngeles, have other po­ten­tial sources of in­come. Last year the Dodgers reached a deal with

TimeWarner Ca­ble to cre­ate a newre­gional sports

net­work called Sport­sNet LA, a deal es­ti­mated to be­worth more than $US7bn over 25 years.

In Aus­tralia, the MLB is work­ing hard to de­velop the game with the eight Aus­tralian Base­ball League clubs, spend­ing a record $US3m on sign­ing bonuses for 16- and 17-year-olds.

“We have more ath­letes from Aus­tralia play­ing pro­fes­sional base­ball in­ter­na­tion­ally than ever be­fore,” saysWer­muth. “We are very good at the sport, much bet­ter than many sports that get

a higher pro­file in this coun­try, for some rea­son.”

The Aus­tralian Base­ball League and its cur­rent teams were set up in 2010 by MLB in a deal to re­vive the sport in Aus­tralia. It con­trasts with the pri­vate team owner model that op­er­ated from the ABL’s foun­da­tion in 1989 un­til 1999. Un­der that model, Wer­murth says, the teams com­peted with each other for play­ers, with over­bid­ding driv­ing clubs and fran­chises out of busi­ness. He ar­gues that the new model, un­der the um­brella of the MLB, is more sus­tain­able.

“We wanted sta­bil­ity for our part­ners, for govern­ment, for our fans. Since we have the back­ing of MLB, we were in a po­si­tion to sup­port the weaker fran­chises over the last three sea­sons,” Wer­muth says. He adds theABL has not yet reached

prof­itabil­ity, but the goal is tan­ta­lis­ingly close.

“We are very close to break even, and I will say this: as an en­tire league we have lost less in the past year than the aver­age soc­cer club does. We have been asked about league ex­pan­sion­many times and we are open to it, but we are go­ing to do it when it’s right — we are in no rush.”

Wer­muth says Aus­tralian base­ball is hop­ing that next month’s Open­ing Sea­son games in Syd­ney will help boost lo­cal in­fra­struc­ture for the game. He points out that Italy has 10 times the

stock of qual­ity base­ball venues that Aus­tralia has.

“This is our Achilles heel — our fa­cil­i­ties

are shock­ingly in­ad­e­quate,” he says. “When we

started the league, in three out of the six states we

didn’t play in base­ball-spe­cific fa­cil­i­ties. When we do have them, they are lo­ca­tions like Syd­ney’s Black­town In­ter­na­tional Sportspark, which are a chal­lenge for our fans to get to.”

Wer­muth says host­ing the games at the SCG has been a huge lo­gis­ti­cal chal­lenge, in­clud­ing mod­i­fi­ca­tions to the change rooms, lev­el­ling the field and ma­jor ad­just­ments to seat­ing at a re­ported cost of about $1m. “Base­ball play­ers are among the high­est-paid ath­letes in the world and they don’t

want to risk their pay cheques by sprain­ing an an­kle or run­ning into an un­padded wall,” he says.

David Smith ar­gues that base­ball has no chance of be­com­ing a ma­jor sport in Aus­tralia.

“In nearly ev­ery coun­try, the ma­jor sports that people play and watch reg­u­larly onTVare ones that were there when in­dus­tri­al­i­sa­tion, ur­ban­i­sa­tion and mass me­dia cre­ated a na­tional mass cul­ture in the late-19th and early-20th cen­turies,” Smith says. “There sim­ply isn’t enough room in people’s minds and lives for new sports, es­pe­cially given how strong cricket is in Aus­tralia.”

But MLB is pre­pared to take a longer-term view. Wer­muth says the decade-long hia­tus be­fore the ABL was res­ur­rected in 2010 has led to a lost gen­er­a­tion of young fans and play­ers. “Cre­at­ing the in­ter­gen­er­a­tional con­nec­tions to base­ball in this coun­try is one of the things we thought long and hard about,” he says. “We want the fa­thers tak­ing their sons, and grand­pas tak­ing their

grand­daugh­ters to their first games. But there is no

easy way and no short­cuts to be had.”

Han­ley Ramirez of the Los Angeles Dodgers takes a swing dur­ing a game against the At­lanta Braves last Oc­to­ber at Turner Field in At­lanta

Aus­tralian Base­ball League chief ex­ec­u­tive Peter Wer­muth

at Wil­loughby in Syd­ney

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