MLB eyes revenue boost from larger postseason
When the curtain rises this week on the most unique postseason in baseball history — starting with eight best-of-three series in empty ballparks — the expanded 16-team format promises high drama, unpredictability and a glimpse into what Major League Baseball hopes is a snapshot of its future business model.
While the 16-team tournament is a fitting bookend to a quirky 60-game season made necessary by the COVID-19 pandemic, the 2020 playoff structure is expected to be an anomaly. For 2021 and beyond, MLB Commissioner Rob Manfred told Sports Business Journal that MLB wants to expand the postseason beyond the 10-team format that has been in place since 2012, while preserving some facets of this year’s structure, adding additional ones — such as a televised selection show during which teams choose their opponents — and also considering a slight reduction in the number of games in the regular season. MLB believes a larger playoff construct will generate more revenue and attract the younger demographic the sport covets.
It will certainly do the former. A typical 10-team postseason would have MLB expecting roughly $780 million in television revenue. This year’s format will yield close to $1 billion.
A source familiar with ongoing discussions said that television partners have told MLB that they relish the opportunity to showcase more postseason inventory; some of the league’s largest sponsors that are currently in a renewal process have expressed that they are eager to invest in more creative ideas; and club owners are “generally supportive,” according to the same source, because they are optimistic that an expanded postseason can increase revenue opportunities beyond attendance. League executives believe more teams in contention late in the season will translate into heightened traffic for league-owned and operated media sites, from MLB Network to MLB.com to club sites, and boost regional sports network viewership.
MLB has long had the most exclusive postseason in sports, which Manfred called “an important principle to preserve.” That will not be the case this season, but a permanent change to a 12-team field would allow MLB to keep that distinction; a 14-team field would not without accompanying expansion. “I like the idea of more playoffs,” he said. “I like the idea of three-game series at the beginning. Whether it’s 12 or 14, whatever the number turns out to be, that’s TBD.”
Changes to the postseason for 2021 and beyond — the collective-bargaining agreement expires after next season — are subject to negotiations with the MLB Players Association. Significant concerns for the union are expected to include whether an expanded postseason would remove any incentive for offseason spending on players and the added grind on players tasked with competing in more postseason games. And the union would need to explore whether players would be penalized financially if the regular season is shortened.
Then there is this delicate balance: attracting a younger audience — a priority for Manfred — with changes that could be at odds with the desires of baseball purists, some of the sport’s most loyal consumers.
Nevertheless, change is afoot. Manfred likes 14 teams — an idea floated before the pandemic — because, to provide an incentive to win in the regular season, teams with the best records in both leagues receive first-round byes, while the next three best records in each league get home-field advantage in the first round and choose their opponent. He remains committed to staging the postseason in the month of October, but a small reduction in the number of regular-season games is possible.
“One sixty-two is one of those issues that probably will be revisited as part of the preparation for the negotiations with the MLBPA,” Manfred said. “It’s a long season when you start talking about additional playoffs. It kind of naturally raises the question: Can you go a little shorter in terms of your regular season? But that is going to be a discussion that will take place after we — knock on wood — finish up with our postseason of 2020 and start to look forward to ’21.”
The source familiar with discussions said “everything is sort of on the table,” adding that the possibility of reducing the length of the regular season is among many issues being discussed by the MLB competition committee.
MLB envisions creating a postseason selection show that will incorporate elements of the annual NCAA tournament bracket unveiling as well as the NFL draft with a countdown clock for, in this case, teams to choose their opponent. Nearly a year ago, MLB Network created a mock selection show for league executives, using on-air talent to analyze and debate the opponent teams should choose as teams considered options in real time.
“As you see it come to life, it just has to be the way to go,” said a source who watched the mock selection show. “It adds a layer to the postseason that I think would be embraced by the fans. Personally, I wasn’t sure what to expect when I first heard about [the concept], but when I saw it in action, to me it’s really a no-brainer. The ultimate reality TV.”
MLB and Turner Sports last week announced they have finalized a seven-year media rights deal that, sources say, will see the media company pay close to $535 million per year through 2028. Warner Media News & Sports Chairman Jeff Zucker told SBJ that he doesn’t think an expanded postseason would dilute the meaning of regular-season games, adding that, “Major League Baseball will determine what’s best for the game, but from our perspective, and for fans, some more teams with an opportunity to compete to get to the World Series would be exciting. We would certainly be supportive of that and would love to see Major League Baseball move that way.”
Hall of Fame pitcher John Smoltz, the lead analyst for Fox Sports’ MLB coverage, added: “This is a perfect snapshot to what, down the road, could be a change for the better. If you knew next year was going to be a duplicate of this year, you don’t think teams would put their eggs in a basket toward moving to compete? If not, good luck convincing your fan base of still trying to be patient. A lot of things out of this crazy baseball year and crazy time in our lives could end up showing us a way that might be a little unique, a little out of the box but, in the end, we’ll look back and go, ‘That was pretty good.’”