MLB may be sports’ big loser in this pandemic
Major League Baseball’s troubles won’t be over once the shutdown eventually ends. In fact, they could grow much worse.
As professional sports peeks its collective head out from the cover of a pandemic and methodically finds a path to restarting its leagues, the uncertainty runs far beyond how many games they might play, whether championships will be awarded and when fans might be allowed to view it all in person.
No, the greater unknown lies in what changes brought about by mitigating COVID-19 might become permanent and how they might significantly reorder the sports landscape.
And in many scenarios where a new world order emerges, the biggest loser might very well be Major League Baseball.
Forget, for a moment, that the league and its players are engaged in a fight over hundreds of millions of dollars and cannot come to an agreement to play, even as fans grapple with millions of job losses, more than 100,000 American deaths in a pandemic and a racial reckoning decades in the making.
No, even if MLB had its house in order, disruption in the sports industry – namely, the double-edged sword of cord-cutting and sagging attendance – already put the game’s financial model in some peril. The events of 2020, sports industry experts believe, will only accelerate that – and the current fight between owners and players might only exacerbate it.
“Frankly, the relationship between MLB and the Players’ Association is one of the things constraining the future of baseball. They have to work together,” says Marc Ganis, president of Chicagobased SportsCorp, a firm that regularly consults with MLB, the NFL and NBA. “Everything can’t be a battle.
“The players, in their organization, have not felt a need to work with the owners because the money has continued to roll in. To their perspective, there is no crisis.
But they’re about to get hit in the face with a wet fish. Because after this season, we may see a meaningful reduction in big, long-term contracts given to players because the teams cannot project revenue accurately.”
Ganis cites the usual reasons for baseball’s existential crisis: The average age of the fan is in the low 50s compared
to the 30-something flock of NBA fans. A loss of local broadcast revenue due to cord-cutting, followed further down the road by a potential regional sports network bubble. And the usual concerns about a game that is too deliberate and too slow to grow a base beyond its aging core.
The sports world, mid- and post-pandemic, will only be more cutthroat.
NBA moving into MLB territory
In a jungle where football is king and everyone else scrambles for the remaining billions of dollars to sustain their industries, baseball, hockey, men’s and women’s basketball and soccer have grown adept at carving out spaces away from Big Football.
For baseball, that meant a near monopoly on the summer months, a perfect runway for its practically bottomless inventory. But if necessity is the mother of invention, it’s also the father of encroachment. And for the next two years, the threat of the NBA will grow even more real.
Should baseball reach an agreement to play this season, it will enjoy an exclusivity window of only three weeks in early July, as the NBA projects its games will resume in late July.
If both leagues avoid shutdowns caused by a rash of coronavirus cases, baseball will find itself head-to-head with hoops into its playoffs, as Game 7 of the NBA Finals is tentatively scheduled for Oct. 12.
Next season will be no better: The NBA plans a Dec. 1 tip-off of the 2020-21 season, pushing its regular season into May, the Finals into July, the draft after that. That’s a full season of moving more of its inventory head-to-head with baseball rather than with football. The NBA could very well like the results.
“There will be encroachment on the typical MLB calendar,” Ganis says, “and if that is successful, they may find ratings and fan interest so great they may encroach another month or longer on the traditional baseball season. That would be very bad for Major League Baseball.”
Particularly with the sport already taking a significant drop at the box office, with attendance drops of 4% in 2018 and an additional 1.6% in 2019. Throw in what would likely be an almost fan-free 2020 season, with health and economic concerns lingering into 2021, and a sport that still relies on attendance for at least 40% of its revenue will be scrambling to stanch further losses.
Protecting the base beyond a relatively hardy core in an economy that might suffer for years will be the challenge.
“I don’t think anything about COVID and the lockdowns we’ve had changes an avid fan’s connection with the sport,” says Alex Evans, managing director of L.E.K. Consulting. “The concern might be longer term, if this were to go beyond this season.
“It’s harder to bring fans back in, and a lot of sports fandom is passed down from generations. The longer you don’t have that opportunity, you do have that issue.
“It’s really the casual fan who on the whim buys day-of-game tickets and gets bleacher seats for the family. That may suffer more. On the margins, there’s more concerns about the experience or being in a larger group setting.”
Fighting over money doesn’t help
MLB remains a $10 billion industry, and its demise is far from imminent, particularly with local TV contracts such as the Dodgers’ 25-year deal, signed in January 2013, that’s valued at $8.35 billion. Equity stakes in networks ensure many franchises get an even bigger piece of their own pie than traditional TV deals.
But as cord-cutting increases, and the gold rush of deals signed last decade begin to sunset, franchises might feel immediate and long-term effects. This winter, assuming baseball manages to hammer out a deal and play a 2020 season, the sport’s current problems – lack of recognition for its biggest stars, a slow game, a labor war that will brew through 2021 – and its extended ones might collide.
Consider that by the time opening day 2021 comes around, several franchises might have played as few as 50 games since September 2019. In that same span, NBA teams will have played more than 130 games.
Good luck marketing emerging stars like Juan Soto, Ronald Acuna Jr. and Bo Bichette when the likes of Mike Trout and Bryce Harper have long been absent from everyone’s TV. That’s largely due to the timing of the COVID-19 outbreak, which was totally out of MLB’s hands. That can’t be said for the rest of its issues.
“Being out of sight really does mean being out of mind, in this case,” Ganis says. “It doesn’t help that the perception is players and owners are battling over money when the rest of the country is hurting terribly.
“Wait until next offseason. I think players will be shocked at how many teams are unable to project accurate revenue and be reticent to give out bigmoney contracts. Not because of collusion, but because of not being able to project revenues correctly.”
Just in time for the next labor showdown, after a 2021 season that might be played in a new, less-forgiving landscape.