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Volume 26 No. 50
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Manfred Reiterates MLB's Desire For Integrity Fee, Backs Off 1% Stance

MLB Commissioner Rob Manfred reiterated his call for an integrity fee for the league amid the newly opened sports gambling landscape in the U.S., though he indicated the fee would be below 1% of the total amount wagered. Manfred, speaking today at the Leaders Sport Business Summit in N.Y., added it would be a negotiable fee and could vary from state to state due the likely lack of a uniform federal framework for American sports betting. He said, “We think the integrity fee, a negotiable figure below 1% at this point, is an appropriate recognition of the fact that the gaming industry is riding our intellectual property, our content and presenting a threat to our competition from an integrity perspective that we’re going to have expend money to prevent that threat from becoming a reality.” He added he does not see a strong likelihood of a uniform federal framework for legalized sports betting, but still would prefer some consistency in the state-level integrity fees. “It’s hard to stay you’re going to get all the states on exactly the same number. But we’d like to get to a pattern that flows through the states so that there’s uniformity,” he said. Manfred did acknowledge the enhanced fan engagement possibilities that the Supreme Court decision brings. “Fan engagement is the big upside in this. I don’t see our sport being a direct participant in gambling at any point. But everybody recognizes that sports betting can be a source of fan engagement, and we’re going to capitalize on that opportunity.” MLB’s equity stake in DraftKings, which would like to be an active player in U.S. sports betting, remains a subject of internal discussion between the two entities. “We still have a DraftKings interest and we have had some conversations about the circumstances under which we would need to step away from that investment,” Manfred said.

STILL OPTIMISTIC ON ATTENDANCE: MLB is down in attendance about 7% thus far in ’18 amid a spate of horrible weather in the Northeast and Midwest. However, as the league has passed the quarter mark in its schedule, Manfred still has not abandoned hope of at least breaking even with ’17. “I’m optimistic we’re going to continue to dig out of the hole,” he said. “You need to have some appreciation for how horrific April was from a weather perspective. Not only did we set a record for the number of games that were postponed, in 2017 we played two games the whole season where the game time temperature was 40 degrees or below. We’ve played 35 such games already this season. It is a hole. But I don’t think it’s a hole indicative of a problem with our product. We’ve seen progress recently against the percentage that we were down.”

PLEASED WITH FACEBOOK: Manfred praised the league’s expanding relationship with Facebook, which now includes a weekly exclusive game streamed on the platform on weekday afternoons, and said the audiences for the games there thus far have skewed much younger than typical broadcast viewership. “This is going to be a year to year decision, but I would expect we will move forward with Facebook, and continue to refine the offering,” he said.

LOOKING INTO ESPORTS: Several individual MLB team owners have been active in the burgeoning esports space, but the league itself has been a quieter player compared to many other properties. Manfred said the efficacy of simulation sports games in esports compared to first-person shooter titles was not a settled issue for him. “It’s an open question in my mind,” he said. “We’re working on refining a game that could be productive in that space. But it is an open question.”

NO MANDATE ON BAMTECH MONEY: Manfred said the recent distribution of proceeds to clubs from the sale of BAMTech equity to Disney, estimated at about $50M per team, was made without any specific conditions or attachments. He said the most common use of the money was for the reduction of debt.