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A Walk In The (Ball) Park: Major League Baseball’s Growing Revenues

A Walk in the (Ball) Park: Major League Baseball’s growing Revenues

By Maddie Haulenbeek

Maddie Haulenbeek is an undergraduate student majoring in Finance in the Eli Broad School of Business at Michigan State University

Sports are a big deal in the United States. Professional leagues have teams located all over the country, and viewership for championships and other important games is huge. Considered America’ s pastime, baseball has long been one of the most popular American sports. By considering MLB’ s (Major League Baseball) financials and comparing franchises, it is clear that baseball is still an important part of today’ s culture.

Annual Revenues

In recent years, the league has seen consistent growth in annual revenue. According to Statista, total league revenue has grown from 3.58 billion dollars in 2001 to 5.9 billion dollars in 2009. Growth has continued since 2009. In 2016, the league saw total revenue of 9.03 billion dollars.

Although the revenue growth is consistent for the league, it is interesting to see how these numbers compare to the statistics of individual franchises. According to Statista, the New York Yankees had the highest annual revenue in 2017 at 526 million dollars. This is up from 441 million dollars in 2009, and 215 million dollars in 2001. Although the annual revenue has grown considerably, there have been a few dips where revenue decreased from the previous year. This happened in 2010 and well as 2013.

Compared to the Detroit Tigers, the New York Yankees have a much higher annual revenue. In 2016, Statista reported the Tigers franchise revenue at 275 million dollars, up from 188 million dollars in 2009 and 114 million dollars in 2001. Although annual revenue varies based on the franchise, these statistics demonstrate how large the sports industry is in the United States today.

Below is a chart comparing the annual revenue growth of five MLB teams. The revenue was found on Statista and measured in 2009 compared to 2016.

 

Sponsorships

Annual revenue is a good measure of how well the league has performed, but there is much more to a successful business than revenue. One of these measures of success is through sponsorships. Sponsorships are common in professional sports because sponsors gain access to large numbers of viewers, especially with televised games.

Per their website, MLB has 36 official sponsors. Some of the largest names include Apple, Budweiser, Coca-Cola, and Papa John’ s. These partnerships are mutually beneficial, as each partner benefits in different ways. They also bring in high amounts of revenue. Last year alone, the league received $892 million in sponsorship revenue according to Statista. These statistics show that sponsorships and positive relationships with other industries and companies are a vital part of the league’ s success.

Viewership

As expected, baseball’s World Series games had the highest numbers of viewers throughout the season. According to Statista, these championship games had an average of 18.9 million viewers in 2017. This was followed by the All-Star Game, which had 9.3 million viewers. Finally, 2017 Opening Day brought in viewers of 3.6 million.

Although these numbers seem high, they are much lower than that of the National Football League. The 2018 Super Bowl had 103.4 million viewers alone (Statista). Regular season games saw numbers more comparable to those of MLB games, but on average, the NFL has a broader audience.

A Home Run

Baseball has remained a key player in the United States sports culture for decades. The league is made up of franchises all over the country, giving it a presence in every different region. This, combined with a lot of successful partnerships, has helped grow the league’ s presence.

The sports industry as a whole is an important part of today’ s popular culture. Athletes have become celebrities, and sports create a sort of comradery between fans. Even though baseball has experienced a lower number of viewers than football, it still has a consistent fan base that has helped the sport remain relevant throughout its history.

Sources

“Average US TV Viewership Selected MLB Games 2017.” Statista, Statista,

www.statista.com/statistics/251536/average-tv-viewership-of-selected-major-league-baseball-games/.

“Chicago Cubs Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/196641/revenue-of-the-chicago-cubs-since-2006/.

“Detroit Tigers Revenue 2001-2016.” Statista,

www.statista.com/statistics/196658/revenue-of-the-detroit-tigers-since-2006/.

“Houston Astros Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/196660/revenue-of-the-houston-astros-since-2006/.

“Los Angeles Dodgers Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/196665/revenue-of-the-los-angeles-dodgers/.

“Major League Baseball Sponsorship Revenue 2010-2017.” Statista, Statista,

www.statista.com/statistics/380197/mlb-sponsorship-revenue/.

“MLB League Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/193466/total-league-revenue-of-the-mlb-since-2005/.

“New York Mets Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/196671/revenue-of-the-new-york-mets/.

“New York Yankees Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/196673/revenue-of-the-new-york-yankees-since-2006/.

“NFL Viewership Figures 2017-18.” Statista, Statista,

www.statista.com/statistics/749140/nfl-viewership-figures-ratings/.

“Official Sponsors.” Major League Baseball, Major League Baseball,

mlb.mlb.com/mlb/official_info/official_sponsors.jsp.

“Philadelphia Phillies Revenue 2001-2016.” Statista, Statista,

www.statista.com/statistics/196677/revenue-of-the-philadelphia-phillies-since-2006/.