Major League Baseball made history in 2013 as its revenues reached a new record high.
According to Maury Brown of Forbes, a league source said revenues will be between $8-$8.5 billion for 2013:
Last year, revenues were above $7.5 billion. While attendance has been ostensibly flat for the league, the continuing growth in television revenue is a key reason for the rapid escalation.
And, it's very possible that MLB could see revenues in the $8.5-$9 billion range by this time next year. The league will see revenues double for new broadcast deals with their national network partners FOX, ESPN, and TBS that will add an additional $788.3 million a year to the league's coffers.
This is big news for baseball, as it shows that MLB isn't that far behind the NFL.
Here's how the leagues compared to each other in 2012:
|Comparing Leagues and Their Revenues (2012)|
|League||Revenue||Avg. Salary||Salary Cap|
|NFL||$9 billion||$1.75 million||$120 million|
|MLB||$7 billion||$2.5 million||$178 million*|
|NBA||$3.8 billion||$5.2 million||$58.04 million|
|NHL||$2.9 billion||$1.3 million||$64.3 million|
|NOTE: MLB salary cap numbers are for luxury-tax threshold. (Info via Statisticbrain.com)|
And just as Brown says, television deals have a lot to do with MLB's climb in earnings. From the top of the mountain (Dodgers) to the lowest on the totem pole (Marlins), all MLB teams are still getting a good chunk of change when it comes to television deals, although some are a lot better than others:
|MLB Television Deals (Average Annual Rights Fees)|
|Top 5||AARF||Bottom 5||AARF|
|Dodgers||$340 million||Marlins||$18 million|
|Angels||$150 million||Pirates||$18 million|
|Mariners||$115 million||Rays||$20 million|
|Yankees||$90 million||Brewers||$20 million|
|Astros||$80 million||Royals||$20 million|
|NOTE: Braves and Rockies also sit at $20 million per season. (Info via Fangraphs)|
Out of all of the teams listed on the low end, the Braves are in theirs the longest (2031). Others will see their deals expire soon and be able to renegotiate something better.
So, what's the advantage of the large revenue and soaring TV deals?
More Money For Players
Without television money, there's no way the Seattle Mariners would have been able to pay Robinson Cano $240 million over 10 years. It's also hard to fathom that the Los Angeles Angels would have given lucrative contracts to Albert Pujols and Josh Hamilton in the last two offseasons without the benefit of their large deal.
These large deals allow teams to go head-to-head with the New York Yankees. History shows that every offseason, the Yankees always throw more money at big-name players. In turn, that takes smaller-market teams out of the bidding.
The Yankees finally got a taste of their own medicine when Cano signed with the Mariners, although they still forced the issue with Brian McCann and Carlos Beltran.
The infusion of television cash for the Los Angeles Dodgers will allow them to keep Clayton Kershaw and make him the highest-paid pitcher in the game. The Dodgers will also be able to overpay for the pieces they need each year.
As far as why deals like the Dodgers' take place, it's because of demand from the fans, according to the team's controlling owner, Mark Walter.
"We concluded last year that the best way to give our fans what they want—more content and more Dodger baseball—was to launch our own network," Walter said in a statement, per Bill Shaikin of the Los Angeles Times.
In short, salaries are going to continue to skyrocket with television deals.
Don't believe me? If you thought $275 million over 10 years for Alex Rodriguez was a high figure, just wait until the Angels have to pay Mike Trout, who is arguably one of the best players in baseball.
As long as revenue continues to climb, so will salaries.
We're in an on-demand society, and television, sports franchises and athletes know it. They're all taking advantage of it and taking a piece of the pie.