One-on-One: Tom Werner

Thursday, March 13, 2008 | 4:41 p.m. | By Liz Mullen | 1 Comment | Print

During a one-on-one interview at the IMG World Congress of Sports, Boston Red Sox Chairman Tom Werner said that Major League Baseball team owners are wrestling with MLBAM, Baseball's interactive arm, over control and distribution of new media.

"BAM and its success is a remarkable business story. I am sure you have all heard what certain people on Wall Street think of its value, and we are all for increasing its value. At the same time, when we acquired the rights to the Red Sox, we believed that we were acquiring the video and radio rights for games in our own territory. So there is some
tension.

"As everybody knows, there is a stalemate right now … in terms of in-market streaming," Werner said. "In-market streaming is good for the customer. But from our point of view, it has to be done in conjunction with our RSN and our affiliates, such as Comcast and Time Warner, in such a way that the product being offered to the consumer is complementary rather than competitive with the games that are on satelite and cable."

Boston Red Sox Chairman Tom Werner (right)

Asked how MLB would resolve the issue, Werner quipped, "Well, we are going to have an arm-wrestling match with Bob Bowman," MLBAM’s president and CEO.

Noting that in the future, fans increasingly will be watching games on the Internet and on cell phones and other digital devices, Werner said, "There is going to have to be some economic solution that works for all the parties."

In a wide-ranging interview, Werner discussed how the Red Sox have built revenue by increasing sponsorship, how the team's storied rivalry with the New York Yankees has been good for business and how MLB Commissioner Bud Selig has been under-appreciated, at least in public, for his success in building the business of Major League Baseball.

"I think Bud has turned baseball into a very strong business," Werner said. "He was focusing on raising the quality of play and we have now achieved the kind of competitive balance and revenue sharing that was unimaginable when I bought into the (San Diego) Padres (in the 1990s.) Bud was the architect of the wild card. He was the architect of so many innovations … BAM, the MLB Network."

Werner also talked about MLB’s plans to build a headquarters in Harlem for the MLB Network. "Baseball has been justifiably concerned about making sure there is a major presence not just on the field, but off the field, of African-Americans,” he said. “The number of African-Americans who play baseball has diminished in recent years."

On the issue of steroids and performance-enhancing drugs in baseball, Werner said the MLB Players Association and the media could have done a better job in helping to prevent the problem. "I certainly was unaware of the kind of goings-on, off the field, that were happening," Werner said. "It's easy for the media to go after this now, but, after
all, the media could have gone after it in the '90s, and where were they? At the same time, I would have — and I will probably be criticized for this — I would point a little bit of a finger at the players’ union, because I do remember conversations with them where we really did try to get them to be a partner in having stricter testing. And Don Fehr and the players’ union, we all know what their counter-argument was, it was about the First Amendment and privacy. But it did take longer than it should have."

Werner also revealed that, when the amount of money that teams spend on minor league affiliates and other development costs is included, the percentage of MLB revenue going to player costs is about 60 percent, among the highest in sports. SportsBusiness Journal recently reported that the percentage of revenue going to MLB players had fallen from a
high of 63 percent in 2003 to between 51 percent and 55 percent in the last four seasons.

"Every major league club spends about $20 million a year on growing their talent," Werner said. "We have a minor league system and coaches and trainers and all kinds of personnel that just aren't equivalent in football or in basketball, where you have the college system as a way of being their minor league."