Sports Business: BASEBALL
BASEBALL'S SLUMP IS FAR FROM OVER
The numbers are better than in 1995, but they're still grim
The Babe and the Mick would be proud. More home runs have gone flying out of ballparks this season than ever before. Attendance is up noticeably from last year. Two of the most emotion-inducing teams in the country--the New York Yankees and Atlanta Braves--struggled through thrilling playoffs to lock horns in the World Series. And by the time you read this, owners and players could have a labor deal.
It's almost enough to make Aug. 12, 1994--the day the players began a seven-month strike --seem very long ago. Almost. Even before you factor in the lack of a commissioner and incidents such as the Roberto Alomar spit fit, a look at the economics of baseball shows that the sport has actually recovered little since the strike.
Attendance and merchandise sales, while better than last year, remain far off their 1993 level. Ratings for Fox Television Stations Inc.'s Saturday afternoon game of the week were below those for CBS Inc.'s sporadic telecasts in 1993. This year's All-Star Game drew its smallest prime-time TV audience ever. And although baseball officials still say they're under the impression that Fox will begin televising games in April, Fox says it will hold off until June 1--as it did this year. No wonder: While NBC has nearly sold out next June's pro basketball finals, a good chunk of World Series ad time was still looking for buyers the week before the first pitch. "Baseball has simply not returned to its heyday," says John T. Lazarus, a senior partner at the ad firm BJK&E Media who headed ABC Sports' ad sales department for 15 years.
FIGHTING OWNERS. Eventually, ratings and attendance should improve, albeit slowly. More troublesome, though, are the deeper problems--like the lack of a coherent marketing plan--that existed well before the strike and have since become worse. Says Richard E. White, a merchandising executive who ran the league's licensing arm from 1986 to 1993: "Baseball has reached the nadir. It can only get better from here."
But that won't happen by itself. The sport remains miles behind rivals such as the National Football League and National Basketball Assn. in terms of TV agreements and an international blueprint. Baseball owners have even fought among themselves over how to pitch the game, sometimes refusing to use the league's "What a Game" campaign.
"No one at Major League Baseball is sitting home saying we have done what the NBA or NFL has done," says Gregory B. Murphy, who this summer became the game's first marketing guru when he took over as chief executive of the newly created Major League Baseball Enterprises. "We aren't in the ballpark." In fact, as Murphy starts a campaign to restore the game's image, his honest appraisal of its situation may be one of the few positive signs for the sport, say advertising and broadcast executives (page 84).
The passion that millions still feel for the game is the biggest reason for optimism. The sport drew 60 million fans to the ballpark this year--more than twice the attendance of any other sport. And new stadiums in Arlington, Tex., and elsewhere have fired up fans. Still, the success stories stand in stark contrast to baseball's overall condition.
In 1992, even before the strike, baseball had fallen well behind football and was barely ahead of hoops in terms of fan interest, according to Roper Starch Worldwide Inc., a research firm. Meanwhile, pre-strike sales of hats, T-shirts, and video games already trailed those for the other two sports badly. Last year, the $1.6 billion in retail sales of baseball goods was a little more than half those of the NFL or NBA, according to the Licensing Letter, a licensing newsletter.
The league's relationship with Corporate America has a lot to do with that. While basketball and football stars get huge positive exposure from endorsements, many of baseball's stars are seen as pouting millionaires. The NBA boasts national sponsorship agreements with 20 companies, including IBM, McDonald's, AT&T, and American Express. That doesn't include the partnerships with shoe companies that are arguably more important. Baseball, meanwhile, has just 10 national sponsors and doesn't get anywhere near the support from Nike and Adidas. "Major League Baseball is not cool. Kids are not emotionally connected," Murphy says.
TAME CARDS? Perhaps the worst news is that baseball's efforts to shore up its position as the national pastime have largely failed. Borrowing a page from minor-league baseball, which has been enormously successful over the past decade, the majors have tried to turn a trip to the ballpark into a night of total entertainment. The Chicago White Sox, for example, this season devoted one night to giving away used cars between innings and another to a couples' kissing contest. White Sox attendance was still off a ghastly 37% from '93.
Or consider the highly touted new playoff system. Beginning last year, the league doubled the number of teams that qualified for the postseason, to eight, arguing that it would keep fans in more cities interested well into August. This year's wild card races were nail-biters--but you wouldn't have known it from attendance in Chicago, Boston, Montreal, or Houston. While all four of those teams remained contenders through September, turnout in the final month was hardly affected. Only in San Diego and St. Louis did teams see a big attendance boost thanks to the wild card. "The people who know the most about baseball are the most disillusioned," says Jonathan Bond, co-chairman of New York ad agency Kirshenbaum Bond & Partners. Even in 1981, when a strike disrupted baseball for 50 days, attendance returned to previous levels almost immediately.
The failed bounceback this time has Murphy and his new team taking a long, hard look at the sport's underlying problems. It's still early in the game, but the right moves on their part could lead to some sweet irony: Imagine if the strike that almost crippled baseball turns out to be the spark that brings the fire back.By David Leonhardt in New YorkReturn to top