TV marketers won’t be happy if this continues into next spring.
Some key issues surround the sizable contracts teams pay out to players -- over $100 million to $200 million or more, multiyear deals -- typically to young upstart players who have built a strong performance resume. Teams would like to delay those deals.
At the same time, the players union wants players to reach free agency more quickly -- and thus gaining larger salaries sooner in a player's second season rather than the third.
Somewhat weirdly, a number of teams -- perhaps playing both sides of the argument -- have recently made player deals, just days before the work stoppage, more than $1.4 billion in free-agent contracts on players, according to ESPN.
OK, we understand the business formula of keeping your costs low, while the value of your business keeps climbing. But what about fans -- those who attend the games and those who watch on TV or listen on radio? Are they getting a good deal here?
And, of course, TV marketers might be worried as well, that stoppage of an important sports TV franchise might last a long time -- like it did 27 years ago.
Baseball was hurt the last time there was a lockout -- back in 1994 and 1995, which wiped out the 1994 World Series and into 1995, when the whole season was trimmed back to 144 games, from 162 per team. When baseball returned, attendance was down, and TV ratings were weak.
Major League Baseball didn’t really begin to recover until 1998 -- when Mark McGwire and Sammy Sosa set major home-run records. Then it really got going again in 2000. Still, MLB has been on the back foot versus other sports ever since.
Here’s the positive picture: Major League Baseball is still a decently valuable piece of TV content and, just to remind you, its sports TV content. That’s the one area that TV networks, stations and cable services, and now streaming services still count on for steady viewing -- especially for those marketers that need live TV viewing to sell their products and services.
Major League Baseball still brings in around $450 million in national TV advertising, according to estimates from iSpot.tv, for a number of TV networks. There is a lot more advertising that goes into local TV baseball efforts. For the league itself, MLB will begin a seven-year, $5.1 billion broadcasting deal with Fox next year.
What if the lockout slips into the spring, like March or around April, when the new season starts? That kind of business money could be severally diminished.
All to say, does MLB really want to mess around when TV networks, stations, regional sports networks and streaming platforms are ready to keep swinging?