With some massive free agent contracts about to be handed out over the next two winters, it’s a good thing Major League Baseball’s revenue is through the roof.
According to a Forbes report, the league’s gross revenue increased for the 15th straight year in 2017. Gross revenues surpassed $10 billion for the first time in league history, according to the report. That’s up from $9.5 billion in 2016. The league first reached $9 billion in 2014, so the increase has been pretty steady.
MLB’s consistent increase in revenues is fueled by several different factors that cover a lot of ground on the business scale. The biggest money continues to be generated by the league’s media rights, which Forbes’ Maury Brown notes includes both traditional television and digital platforms.
Brown also notes the league’s continued labor peace as a driving force that has kept interest in the game strong. But there are many other factors that perhaps fly under the radar for casual fans. Brown went into further details on those in his Forbes report.
The league continues to benefit from the realignment of the various business arms of the league. Under commissioner Rob Manfred, the league has created what is called “One Baseball” by which digital, sponsorships, television, and others cross pollinate to allow partners to promote across the platforms.
That alignment has helped grow league-wide sponsorships in double-digits for 2017.
Growth for the league continues around its digital media interest, MLB Advanced Media. The league spun off an arm of MLBAM in 2015 named BAMTech. The league sold its majority stake to the Walt Disney Co. to for $2.58 billion while retaining a 15% minority stake. It is possible that MLBAM could see a major restructure with the departure of its CEO and visionary Bob Bowman departing at the end of the year.
Television media rights continues to play a part in revenue growth for the league. The regional sports networks that support regular season broadcasts for the 30 clubs continue to be a ratings success and ratings were up significantly at the national level in 2017.
As the revenue continues trending upward, so too will be the money that’s spent. This winter’s top free agents, such as Yu Darvish, Jake Arrieta and J.D. Martinez, will certainly benefit. As will the historic class that hits the market next winter. It also backs up Giancarlo Stanton’s statement from last week when he said that every team in MLB has money to spend, even the Marlins.
Increased revenue is expected to continue as more television deals and streaming options are ironed out. MLB’s business is very healthy, and the outlook remains strong for a long time to come.
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