Major Challenges Facing MLB

Yesterday, I said I wanted to enumerate some of the serious challenges that face MLB as a whole.  I believe the challenges here are more severe than many reporters in and around baseball seem to think.  I am not happy to take such a position because baseball is such a relaxing and enjoyable way to spend a summer evening.  So, let me begin this morning by addressing what seem to be two contradictory facts:

1. Up until the pandemic year of 2020, gross revenues for MLB had never been higher.
2. Baseball is not nearly as popular with the general public as it used to be.

Up until about the 1960s, the two most prized assignments in the sports departments for major newspapers in the US were the baseball beat and the horseracing beat.  Probably third on the list of desirability was the boxing beat.  Horseracing and boxing do not even merit having regular beat writers at most newspapers in 2021; major papers still have baseball beat writers – – but they are not necessarily the envy of everyone on the sports staff.  What was America’s national pastime is now a popular but not dominant sporting enterprise.

The reasons behind the record levels of revenue come from different aspects of society in 2021 as opposed to 1955:

• The economy today is much larger than it was in the 1950s, so the simple fact is that there is more money around for MLB to harvest from its fans.
• A corollary of that expanded economy is that many more people have much more discretionary income and some will opt to spend a portion of that on baseball games.
• Television money for baseball telecast rights in 2021 is thousands of times larger than it was in the 1950s.
• Transportation access to stadiums is now available to a much larger geographic footprint than it was in the 1950s leading to more fans putting their fannies in MLB stadium seats.

Those economic factors look good and it is fair to point out that so long as the economy remains strong, the economics of baseball should be hunky-dory.  Except, there is a fly in that ointment:

• MLB fans “skew old”.  It is an aging fanbase; the average age of rabid baseball fans is significantly over 50 years old according to survey data.
• People who are 50 and above tend to have stable incomes so they are in a position to spend their discretionary income on what they like; old people like baseball…
• People who are 50 and above also tend to die at a higher rate than people in their 20s and 30s.  If you doubt that assertion, go ask the actuaries at any insurance company for verification.

MLB is losing its most avid fans to Father Time, but it is not replenishing them at the same rate with younger fans who will be around longer.  The fact that the average age of the serious baseball fans continues to increase while there has been a slow – but steady – decline in live attendance for the last 7-10 years should not be shocking.  Those two “trends” are closely related.  The fact of the robust gross revenue for MLB probably gave owners – – and players – – reason to dismiss to a large extent the issues related to the shrinking fanbase and the diminution of the stature of baseball in society.  Then an interesting juxtaposition arrived:

1. The 2020 pandemic caused a huge revenue drop for all teams.  Let me do some small math here.  For a team that averages 25,000 fans per game and hosts 81 home games, where ticket prices average only $40 and each fan only spends $25 once in the stadium on food/drink/merchandise, the total revenue flow there is $131.6M.  For many teams, that revenue flow was reduced to a trickle in 2020.
2. The current CBA expires at the end of the 2021 season and there will need to be negotiations that will ultimately arrive at a new one.

MLB and the MLBPA had a relationship in the 1970s and 80s that made the Hatfields and the McCoys look like BFFs.  Every time there was the opportunity for either a work stoppage or litigation, that is precisely what happened.  That era of rancor culminated in 1994 when the MLBPA chose to go on strike in mid-August after about 115 games had been played; the two sides could not come to an agreement in time for there to be a World Series that year and it took an injunctive ruling by now Supreme Court Justice Sonya Sotomayor in March 1995 to get the owners and the players to agree on a new CBA.  That 1994/95 experience should be instructive to owners and players now – – but it seems not to be.

Since 1995, there has been “labor peace” in baseball AND it has been in the same time period where gross revenues for baseball have increased most dramatically.  Those two facts are not related by direct cause and effect but the fact that for 25 years the storylines for baseball have been about players on the field as opposed to players off the field has focused fan interest on issues that can produce revenue for the sport.  Players like to say that no one goes to the park to see the owners; that is absolutely true – – as is the statement that no one goes to the park to see the players in street clothes outside the park not playing baseball.

The other aspect of the 1994/95 feud was that it took MLB several years before the “fans came back” and more than a couple of baseball historians believe that it was not until 1998 when Sammy Sosa and Mark McGwire staged their “home run race” that fan interest in baseball “returned to normal”.  The pandemic-reduced 2020 season caused a significantly diminished interest in baseball all by itself; the game does not need a work stoppage in 2021 to magnify that reduction in interest.

The icing on this cake is not pretty.  Right about now, the owners and the union seem unable to agree on anything.  As I pointed out yesterday, the two sides could not bring themselves to be on the same conference call with Federal health officials to learn the latest info on COVID-19 and on effective protocols for baseball to use to have a season run its course with minimal health-related incidents.  The two sides chose to have separate calls with those officials.  How encouraging.

And those are just the short-term challenges for MLB and the MLBPA…  There are systemic problems too and those are going to be much more difficult to resolve.  The current pissing contest can fade into history – the same way middle school feuds do – but the systemic problems are going to remain until they are addressed.

One big problem is “analytics”.  I should say more precisely that it is the “over-reliance on analytics” that is the problem, and that over-reliance affects fans and players and owners.

• Analytics has produced “The Shift”.  What “The Shift” has done is to reduce the number of base runners which reduces the “excitement” in the games.
• Because it is more difficult to get a hit against “The Shift”, one adaptation by hitters is to alter their swing to change the “launch angle” thereby hitting the ball over the shift – – and hopefully over the fence too.  That produces more home runs, and it produces more strikeouts, but it does not produce more excitement.
• Analytics has already had – and will almost assuredly continue to have – a negative effect on the pocketbooks of lots of players.  Recall when Albert Pujols got his 10-year mega-contract at age 31 or 32; that is not likely to happen anymore because analytics says that such deals are a waste of lots of money for the tail-end years of that kind of contract and that money can better be spent on players who will be productive in those years.  Long-range guaranteed contracts for players in their early/mid 30s are going the way of the dinosaur.  I cannot wait to hear the union cry “collusion” here…

So, in the current environment when the league and the union will not participate in the same conference call, what do you think of the chances that the two sides could even begin to have a meaningful discussion of issues such as the above.  But wait; there’s more:

• The aging fanbase is dying off and is not being replenished with young-uns in part because the games are too long, and the pace of play is too slow for “millennials”.  When I was growing up, a game taking 2 hours and 30 minutes was commonplace; many were shorter than that.  Today, it is the 3-hour game that is commonplace; that is the length of an NFL game – – but there is a lot more excitement and action in an NFL game than there is in today’s MLB games.
• Attempts to increase pace of play have been cosmetic at best and have been universally ineffective.  Waving the batter to first place in lieu of an intentional walk is cosmetic at best; making relief pitchers face at least 3 batters before they can be relieved saves an in-game change a few times a week.  Ho hum …
• [Aside: Maybe the way to have fewer in-game pitching changes is to limit the number of pitchers a team can use in a 9-inning game?  Every in-game pitching change takes about 3 minutes to happen and for the fans it is dead time.]
• Meanwhile, the time between innings has not been addressed; today it is always more than 2 minutes – – and sometimes it is 3 minutes.
• And the Holy Grail of “getting the calls right” – – so-called instant replay – – produces plenty of dead time every game.  On every close play, managers and players stall for time until the manager can get a sign from his electronic replay wizards telling him if he should challenge the call or not.  When he chooses to do so, the mechanics used by the umpires to do the review is only slightly less cumbersome than working a UN resolution through the General Assembly and the Security Council.  Meanwhile, the fans in the stands and the fans at home are stuck watching a conference call.  Try to manage the excitement there; you would not want to induce any heart attacks…
• MLB reduced the number of minor league teams around the country by about 25% for this year.  That will save owners some money which is a good thing at a time when revenue has dropped.  However, what does that do to further the objective of growing the game by getting kids interested in and fascinated by the game itself?

I do not know either Rob Manfred – – The Commish – – or Tony Clark – – the MLBPA Executive Director.  What seems apparent to me is that neither gentleman has much time nor use for the other one.  Maybe – I said MAYBE – that chilly relationship comes from the fact that The Commish used to be the chief labor negotiator for MLB and the MLBPA Exec Director has been part of the union doing negotiations with MLB for about the last 10 years.  Whatever is the source of their “lack of camaraderie”, it would be best for fans and for “The Game” if they found a way to get past it quickly.  Good luck with that one too…

Here are some fundamental truths about what faces MLB and the MLBPA:

• The sport needs to make itself into a better TV entertainment product.  To achieve this end, there will need to be cooperation among the owners, players, umpires and “broadcast partners”.  If there is any momentum pulling those forces together now, it is opaque to me.  Notwithstanding the lack of cooperation here, this should be Priority Number One for owners and players because this is the source of the “big money” that flows into the game that drives profits for owners and contracts for players.
• The sport needs to make itself a more “fan-friendly stadium event”.  Attracting new fans – who will bring “new money” with them to the park – is not going to happen easily if the product is a three-and-a-half-hour game with only 20 minutes of “action” that costs a couple of hundred dollars.  The same four forces needed to accomplish an improvement for TV need to be involved here too …
• The sport needs added competitive balance.  Consider that the LA Dodgers have two players signed for 2021 – – David Price and Trevor Bauer – – who will make $60M this year between the two of them.  The Cleveland Indians and the Pittsburgh Pirates have a projected 26-man opening day roster that will make less than $50M in total.  The projected Dodgers’ opening day roster would make $250.2M this year.  There needs to be a way to bring a semblance of balance to the talent levels on the various teams.  I know; there have always been talent-rich and talent-poor teams, but this is getting ridiculous.  Why would a young fan in Pittsburgh or Cleveland develop a deep and abiding interest in the local team when it surely looks as if the team is not even trying to be competitive.  [Aside:  And yes, I also remember those spunky Tampa Bay Rays and how they win pennants once a decade or so and the Oakland A’s who “thrive” on Moneyball.  They make for nice feelgood stories, but they do not attract a rabid fanbase; in fact, they do not attract much of a fanbase at all.]

I am not suggesting – let alone predicting – that MLB is about to crash and burn without a new CBA that makes drastic changes to the game immediately.  There are still plenty of baseball fans – me included – to sustain the leagues.  I am suggesting, however, that baseball has lost its dominant role in the US sports cosmos already and that it could well continue its downward trajectory without changes.  MLB needs changes on the field and off the field and the changes need not happen drastically.  But there must be a commitment to making changes that intend to improve the game as a product.  Baseball needs better rules and better marketing.

• The NFL markets the idea of “On any given Sunday …”
• The NBA markets its star players.
• MLB markets its history.

Well, if you are marketing your history and your fanbase is dying off without an equal influx of new fans, think about the logical consequences there.  Baseball owners and players should heed this entry in The Official Dictionary of Sarcasm:

“History:  A cumulative account of the ways a bunch of dead people have screwed up in exactly the same ways we are screwing up right now.”

But don’t get me wrong, I love sports………