SBJ/Jan. 19-25, 2015/Leagues and Governing Bodies

MLB setting ‘a big goal’ of $15 billion in revenue

As MLB begins the Rob Manfred era, league executives are aiming to increase annual revenue to more than $15 billion over the next several years.

MLB ended 2014 with a league record of $9 billion in total industry revenue, up by nearly a billion dollars from 2013 and nearly twice the industry level from 2000. Now Bob Bowman, promoted last month to president of business and media in a new management structure developed by Manfred, has outlined an aggressive goal to team owners and league staffers to further accelerate baseball’s revenue growth.

“We’re after a big goal,” Bowman said. “We believe we have the most valuable assets of any live sport, and we are looking to grow our top line significantly.”

Bowman did not outline a timetable for the $15 billion goal. But because Manfred in November gained approval for a five-year contract to be the league’s 10th commissioner, succeeding the retiring Bud Selig, many of the league’s business strategies are focused around that half-decade time frame.

MLB’s revenue aspirations recall the goal NFL Commissioner Roger Goodell introduced in 2010 for that league to reach $25 billion in annual revenue by 2027, up from its current level of $10 billion.

Baseball’s revenue growth, if achieved, will derive from nearly every major business line. Most of the sport’s national and local TV contracts are in place for the rest of the decade, but generally include annual escalators in their rights fees. League officials would also like to jump-start gate attendance, still a key metric since baseball sells far more tickets than any other U.S. pro sport but which has been largely stagnant since the recession of 2008-09. International operations present significant room for expansion.

But digital media and technology will be the key driver in baseball’s economic lift, continuing Bowman’s success running MLB Advanced Media. In addition to operating baseball’s own digital business, MLBAM in the last two years has expanded by handling streaming video operations for a range of outside entities. A recent and substantial deal with HBO to power its forthcoming over-the-top digital video network represented just the latest victory.

“We are uniquely positioned to take advantage of the opportunities out there when it comes to digital,” said Larry Baer, San Francisco Giants president and chief executive. Baer will be part of a newly merged board of directors encompassing MLBAM and MLB Enterprises.

“The digital world is changing really fast, but it also presents a huge array of opportunities. And I think we’re now set up as well as anyone to change with it and exploit that. Digital’s the big area where I see us getting to $15 billion,” Baer said.

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