Changes expected at MLB
Major League Baseball is conducting a full-scale review of its headquarters and MLB Advanced Media operations with the aid of management consulting firm McKinsey & Co., a study likely to produce major changes to the league structure and personnel.
The study, initiated in August, precedes last week’s announcement that Bob Bowman, MLB president of business and media, will depart at year’s end. But the review now dovetails directly into MLB Commissioner Rob Manfred’s task to determine how the sport’s commercial business will be run without Bowman, a visionary who worked with MLB since 2000 and redefined how fans consume digital media and forge connections with baseball.
Manfred said the McKinsey work was prompted in large part by the deal last summer with Walt Disney Co. to acquire a majority stake in BAMTech, the MLBAM subsidiary that provides digital video support for entities such as the WWE, NHL and PGA Tour, among many others. Disney had acquired a smaller stake of BAMTech earlier.
|Bob Bowman announced last week that he’ll leave MLB at the end of the year.
“After the second Disney transaction [with BAMTech], I felt it was appropriate as a large organization to take a comprehensive look at the entire operation, who stayed, who left, and what the entire organization should look like going forward, and make the necessary adjustments,” Manfred said. “I consider that sort of Management 101.”
Bowman began with MLB as president and chief executive of MLBAM, coming into baseball following a diverse political and business career that included state and federal government, corporate leadership and e-commerce. He was elevated to his current title in late 2014 as part of the commissioner transition from Bud Selig to Manfred, tasked with overseeing all of baseball’s revenue-generating activities including media, sponsorship and licensing.
“Rob will need to take a step back, take stock of where we are, and create a structure that will allow us to move forward with Bob gone, and I have confidence he will do that,” said San Francisco Giants President and Chief Executive Larry Baer. “We have a lot of assets and a lot of talent left in the building.”
Executives likely to play a key role in MLB business operations in the new structure include Chief Operating Officer Tony Petitti and Noah Garden, executive vice president of business. There is no timetable for the McKinsey work to conclude or the post-Bowman plan to be determined. Bowman’s contract ends Dec. 31.
Both the McKinsey work and the forthcoming post-Bowman reorganization also tie into the One Baseball philosophy Manfred has sought to develop since becoming commissioner in early 2015. Among Manfred’s early moves was to unify baseball’s business functions and more closely align his office with lower levels of the game such as Little League. And MLB is scheduled to move into a new midtown Manhattan headquarters in 2019 that will house the currently split MLB and MLBAM.
First Look podcast, with Bowman discussion beginning at the 17:40 mark:
“We’ve made some progress on this front so far, and I continue to believe strongly in the notion of one Major League Baseball,” Manfred said.
NASCAR in 2012-13 went through a somewhat similar review of its competition division with New York-based McKinsey, a study that produced several rules changes and accelerated its adoption of new technology.
As for Bowman, he leaves a legacy that helped catapult baseball from a rather staid organization to a restless innovator that created a series of products that fundamentally altered the fan experience for fans at home, on the go, and in the ballpark.
In addition to creating successful digital products for baseball (see below), Bowman was the driving force behind the creation of BAMTech. After being formally spun off in 2015, BAMTech is now majority owned by Disney, following two separate transactions collectively worth $2.58 billion. Disney now holds 75 percent of BAMTech, with MLBAM at slightly more than 15 percent, and the NHL at just under 10 percent.
“There are very few people who have created multiple billions of value like this in such a short period of time, and Bob is on that list,” said sports industry consultant Marc Ganis.
Bowman, 62, said those two BAMTech equity sales helped accelerate internal considerations of leaving MLB, though he has not detailed what his next career move will be, saying he was “focused on the transition.” He credited the executive team under him, many of whom are now around the same age of 45 he was when he first took the MLBAM role.
“These folks are really smart and they are ready to run the company,” Bowman said. “The time is right.”