When I was a kid I could pretty much always tell you who the heavyweight champion of the world was. I’ve never watched a boxing match really, but it was popular enough that I was at least aware of the big names. Mike Tyson, Evander Holyfield, Buster Douglas, and George Foreman were names that most people knew. Do you know who the heavyweight champion of the world is now? I looked it up and his name is Manuel Charr. In the past decade the only name of someone who held the title that I am familiar with is Tyson Fury. Which is an awesome name for a boxer, but I am only vaguely aware of his existence.
How did a once massive sport decline to the point where the public is only tangentially aware of what’s going on? Many point to the switch from broadcast to pay-per-view. There are dozens of articles about it, here are a selection.
The last one, in particular, made me pause and think about where baseball is. Depending on how you define who a pro baseball player is, you might come to the same conclusion, but in boxing the top decile of boxers make 95% of the money. The second decile earners are making tiny fractions, 2-to-3% as much, as the top decile. More than that, even among those in the top ten percent the median is about a tenth of the average earnings. If you are not in the top 1 or 2 percent of earners, then it is getting harder to make much or anything at all. Maybe Bernie Sanders will retire from congress and start working on boxing incomes with his extra time. I would assume MLB makes up more than the top 2% of all professional baseball players, but even if they don’t, you can still make a decent amount of money in Japan or Korea. It seems much more winner take all in boxing.
Why am I talking about boxing in the first place though? This is a baseball blog. Boxing started to move toward pay-per-view after the “Thrilla in Manilla” in 1975. By the end of the 80s it was the dominant form of distribution for the sport. This created an artificial gate between fans and the sport. Only those invested in boxing were willing to pay, so they were not cultivating the younger fans that you need to keep a sport going. They took higher paydays in the short term and are now paying for their myopic shift.
MLB is not going to make a choice like this, but they are being forced to change their monetization model. The Bally Sports bankruptcy is the first major sign that business as usual is unsustainable. As cable slowly dwindles, those large carriage fees that have sustained RSNs, along with ESPN, are no longer the guaranteed cash flow machines that they were for the last several decades. Too many people have cut the cord, and it is putting pressure on cable providers to slim down their offerings or negotiate lower fee payments to channels. Sports are the last thing that people are prioritizing to watch live with on demand taking over every where else, so they are slightly insulated, but it will not be enough to keep the gravy train rolling.
There are a lot of ways that the game can go from here, but the overall strategy taken is going to be very important to the long-term health of the sport. Streaming is coming to dominate, but I am worried that they will not do it in a way that keeps the game accessible to the masses.
Rob Manfred at least realizes that the blackouts have to go. Like boxing, if they put a large paywall between baseball and those who are not big fans, then only the big fans will be there. It will erode their ability to create new fans, and bring kids into the game. Them realizing that blackouts are a problem says that they understand this, but some of the things teams are doing make me think they don’t understand it well enough.
Baseball stadiums are featuring fewer and fewer seats, including the proposed new stadium for the Royals. This could be attributed to a lot of things, but the main driver is more premium seating, and a higher per-person spend per game. That works best when you are a good team with a full stadium, but every team thinks they will get to that state at some point - even the Detroit Lions are good right now. Again, from an owners perspective, this increased revenue on a smaller venue makes sense in the short-term, but I think if you zoom out, it will keep many families from attending and kids won’t have those formative ballpark experiences that make fans for life.
It could end up that the transition to streaming is handled similarly. Trying to maximize contract dollars in the near term could impede the reach, and end up diminishing the audience over time. We have already seen individual games on Apple+ and the like. As a one-off, not a big deal, but if you have to need four different streaming services to see all of your team’s games, it is going to turn people off very quickly. Oh, and then you need another for the playoffs? Forget it. There needs to be an emphasis on being accessible to as broad an audience as possible, even if it does not maximize the dollars for next year.
The other part that the MLB needs to figure out is social media. The NBA, more than any other league, has taken advantage of people sharing their highlights and players’ accounts. Reaching the next generation is imperative, so you need to meet them where they are. We live in Kansas, nowhere near an NBA team, and yet my son’s classmates in grade school all know who the big NBA players are. Very few of them care about Mike Trout at all. There is a balance to strike here, as allowing unfettered access to players is a bad idea, but getting your players and game in front of people is very much needed. Aaron Judge should be a household name who can compete on a level near LeBron or Patrick Mahomes. He is currently not in that realm. Whatever the NBA is doing should be copied, as their growth is much more than the other major leagues, and it makes sense given the way the world works currently.
Baseball is not in a bad financial position today, and I don’t think that they will be next year either. That does not mean that everything is great. I really hope that the league and the owners realize where they are and what the coming shift in television viewership and monetization means for their league. Otherwise they will end up like boxing. A niche sport, a has-been that exists off to the side of the mainstream.