Major League Baseball

Baseball in good shape with labor peace

Published Dec. 5, 2011 12:00 a.m. ET

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After surpassing its record $7 billion in revenue this season, Major League Baseball heads into its winter meetings this week primed for another season of lucrative free-agent contracts, especially with the game's biggest slugger, Albert Pujols, on the market.

Fifteen years ago, baseball seemed doomed to an endless series of labor wars. But unlike the National Football League and the National Basketball Association, both of which suffered through lengthy lockouts this year, baseball and its players union reached a new long-term deal last month without even a hint of major strife.

While labor strife is not necessarily a sign of financial turmoil, labor peace is often a leading indicator of stability, at least in sports, where struggling owners often blame their woes on player salaries and try to organize attempts to roll back compensation.

That is not happening in Major League Baseball, which is poised for a week of discussions about possible trades and free-agent signings. While MLB's business is not perfect, it is probably as healthy as it has been since the rise of the players union in the 1970s.

Despite a struggling economy, the game's 30 teams sold more than 73.4 million tickets this year, its fifth highest total, the most since the 2008, and within shouting distance of the 2007 record of 79.5 million. The Los Angeles Dodgers, one of the marquee franchises, is on the block and expected to fetch at least $1 billion.

Tim Brosnan, MLB's executive vice president for business, said, "Our story is about content, content, content and the value of it."

To be sure, MLB is not without its trouble spots. Seventeen teams sold less than 65 percent of their tickets. Commissioner Bud Selig said he was troubled by the small audiences for the first round of the playoffs, which are broadcast exclusively on cable channels TBS and TNT. Franchises in Tampa Bay and Oakland are desperate for new ballparks and without public support may be forced to relocate.

Still, several broadcasters are preparing to bid for national television rights. The current contracts expire after the 2013 season, and the sport is set to take advantage of what has become a fervent market for the rights to the highest profile sports, including college football, the Olympics and the FIFA World Cup. National rights fees are expected to increase 25 percent to 40 percent from the current level of roughly $700 million per year, according to media experts.

Local TV rights fees for individual teams also continue to soar, especially in larger markets as media companies see the 162-games schedule as the key tent-pole to any regional sports network. Last year the Texas Rangers signed a 20-year local media rights deal valued at $1.6 billion. FOX Sports recently offered the Dodgers a deal valued at $2.7 billion for local media rights for 2014-2030. FOX Sports is a unit of News Corp., which also owns The Wall Street Journal and NewsCore.

Also, the league-owned cable channel, the MLB Network, is now in 65 million homes and collects roughly $200 million a year in subscriber fees. "We've seen that the audience for this kind of sports content doesn't erode," sports media expert Lee Berke said. "There is more competition than ever for attention, but the demand for sports is growing."

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