Brief - The Hustle

Baseball looks a little uglier but business is booming

Written by Ben Berkley | Apr 4, 2023 11:26:41 PM

“This is our year” will be uttered by fans of all 30 Major League Baseball teams today as a new season starts — by fall, 29 of those fan bases will discover they were terribly, terribly wrong.

But those fans will have forked over a lot of money along the way.

MLB set a $10.8B+ revenue record last season and franchise values are soaring (the average team is worth $2.31B, per Sportico).

Putting up big stats

Since Houston hoisted the trophy last November, teams have signed players to a combined $3.79B in contracts, per Spotrac. Why the confident spending?

  • Streaming pays off: Early streaming tech developed by MLB sold to Disney for $3.48B, per Forbes. The deal’s final $900m came through this offseason.
  • Seats at a premium: A night at the ballpark — tickets, parking, souvenirs, drinks, and hot dogs for four — now costs an average of $256/game, per Axios. Plus, MLB will make $400m+ through a newly inked ticketing partnership with SeatGeek.
  • More money up their sleeves: … Well, on their sleeves. Teams can now sell (grotesque) ad space on their uniforms. Deals for the (atrocious) sponsored patches range from $5m to $17m per year.

Not all fun and ballgames

America’s pastime remains a lucrative business, but MLB has lost its throne to the NFL (and its ~$19B in revenue). And there are plenty of other threats to baseball’s finances:

  • Attendance has dropped for nine straight seasons (excluding 2020). To bring live audiences back, MLB is debuting three new rules this season to make games faster and more action-packed — and they hired Nike’s famed ad firm Wieden+Kennedy to tell the story.
  • Diamond Sports Group, broadcasting partner for 14 MLB teams, filed for bankruptcy this month. Diamond’s uncertainty looms large — regional TV deals comprise ~20% of teams’ revenue, per ESPN.

Oh, and have we mentioned yet how ugly those jersey patches are?