MLB franchises aren’t baseball teams, they are sport entertainment corporations and there is a vast chasm between the few heavy hitters and the also-rans.
MLB games are designed to do one thing: make as much money for the franchises’ investors as possible. There are a few franchises who are far more successful at that than others, and it’s lonely at the top of the business of baseball.
The conversation could revolve around the pinnacle of on-field accomplishments in MLB, winning a World Series championship. Just five of MLB’s franchises share over half of those between them. Likewise, this has little to do with which team has had more players touch home plate after recording 27 defensive outs.
Winning baseball games is only relevant as far as it is profitable. If on-field success alone were enough to propel a franchise to the upper echelon of the corporate ladder, data would tell a much different story than it does.
Cleveland’s MLB franchise is currently on a 21-game winning streak, a new record for the American League. Despite that, VividSeats.com reports no significant spike in action on the secondary ticket market either in demand or price paid. Getting as many people as possible into stadiums is MLB franchises’ best possibility to maximize profit, as attendees don’t just pay at the gate. Concessions and merchandise are a chance to increase revenue. Additionally, the franchises need game attendees to fulfill their promises to sponsors.
There is further data to show a disconnect between on-field success and full coffers. The Kansas City Royals are less than two full seasons removed from winning a World Series title the season after they won the American League pennant. They rank 17th in attendance this season. The Washington Nationals last weekend claimed their fourth National League East division championship in six years. That team ranks 13th in attendance so far this season.
Attendance figures don’t tell the whole story. Television is necessary to create an accurate picture. While overall ratings for the league across the board are up, not all franchises have seen an equitable bump. Sports Media Watch reports that viewership for ESPN’s Sunday Night Baseball is up 14 percent this year as compared to last season. MLB broadcasts on ESPN as a whole are up seven percent. A breakdown of the numbers begins to tell the real story.
The Boston Red Sox vs. New York Yankees game on Sunday, Sept. 3 was the most-watched September regular season MLB game in four years. Just a week prior, however, a New York Mets vs. Washington Nationals game limped to the worst ratings finish in five years for Sunday nights on ESPN.
While the Mets’ lack of on-field success has to be acknowledged, so do the rest of the facts. In Sunday night games, five of the seven most-watched contests have involved the Yankees. Nationally televised Red Sox-Yankees games have been a ratings burgeon for all of MLB’s broadcast partners.
That’s no accident. The Yankees and Red Sox are two of three MLB franchises listed in the top 20 of Forbes’ Sports Money Index, a ranking of the world’s most powerful sport-related brands. The Los Angeles Dodgers are the third MLB team. In comparison, the NBA and the NFL only have two franchises apiece in the top 20. You don’t find an NHL franchise until you get to the Chicago Blackhawks at No. 124.
While those three franchises represent a strong showing for MLB, they also represent an upper echelon. The next MLB franchise on the list, the Chicago Cubs, sits at No. 38. After that, it’s the Mets at No. 57. The frequency picks up as readers descend the list. The reason for the dominance becomes clear with a deeper look at how the organizations at the top run their businesses.
With Legends Hospitality and the YES Network, the Yankees have leveraged their baseball profits into revenue streams that have very little if anything to do with how the on-field product performs. The Red Sox have been champions of marketing, landing contracts with an impressive six other brands in Forbes’ index and filling Fenway Park despite the fact that their ticket prices are among the highest in the league. The Dodgers have been able to continuously find new sources of capital to cover their operating losses.
Certainly, the size and demographics of these team’s markets play a part in their success stories. That’s an advantage that they will always enjoy. In the business of baseball, there are no competitive balance draft picks. Three franchises lead the league, and it’s not even close.