Take Me Online to the Ball Game
Is there anyone in baseball feeling more pressure to perform this season than the latest salary record-breaker, Texas Rangers shortstop Alex Rodriguez? Just maybe. Meet Robert A. Bowman, a 45-year-old rookie to Major League Baseball who confesses he has "bad butterflies" heading into Opening Day on Apr. 1.
Bowman isn't spending the last days of spring training shagging fly balls or working on his swing. He's toiling away in the ramshackle office of a converted factory near Manhattan's meatpacking district. Bowman was hired by MLB in November to help bring America's pastime into the future by overhauling its Internet operations. The final touches are being put on features that the league hopes will attract scores of new users to its six-year-old Web site, MLB.com.
SURPRISE MOVE. But the league, which has been slow to exploit the Internet compared with other sports leagues, wants the site to do more than just build brand--it wants it to make lots of money. That's why MLB has spun off the Net unit as a for-profit limited partnership. The league's 30 team owners have committed $60 million to the site over the next two years--an interesting strategy at a time when costly Internet units set up as separate operations are being folded into big media companies and lots of question marks still linger over how best to make money online. "This is not necessarily a smart move in this environment," warns Christopher Todd, a Jupiter Media Metrix Inc. analyst. "The self-sufficient model is not going to be viable."
But MLB.com execs are predicting that the obsessive devotion of baseball fans and the ubiquitous nature of the Internet will combine to make the site profitable. "There's never a good time to [launch a business]. But any dot-com now that has this kind of brand-name funding has a great chance to succeed," says Bowman, who has worked in both the Old and New Economies. The high-energy Bowman, who grew up a Milwaukee Brewers fan, is a former president of conglomerate ITT Corp. and was most recently CEO of online consumer electronics retailer Cyberian Outpost.
Back in January, 2000, baseball's 30 team owners voted to hand over control of their teams' Web sites--including editorial content--to the league in an effort to be more economical. Bowman and his staff, including two writers based in each team's home city, now run all those sites. Major League Baseball Commissioner Bud Selig compares the move to turn over the Web sites to the landmark decision in 1961 by National Football League teams to share television revenues. "Sharing Internet revenues equally will change the internal economics of the game," says Selig. "It helps us to solve our disparity problem" between large- and small-market teams.
But how does MLB.com plan to drum up money? Through sponsorships, advertising, subscriptions, and e-commerce, say executives. Bowman predicts the site will turn a profit in the 2003 season. It will at first rely heavily on sponsorships, such as the current $2 million online sweepstakes being offered by Marriott International Inc. But increasingly, execs says, e-commerce, especially auctions of memorabilia and subscriptions, will be the largest revenue generators.
CUSTOM REPLAYS. About 80% of the content on the MLB site will be free. The remainder will be accessible for a fee--including radio broadcasts of all games from Anaheim to Atlanta, live and archived--for $9.95 for the season. That spells the end of listening to games on local radio station Web sites, since MLB's rights supersede those of the local broadcasters that already pay fees to the league. MLB.com, which offered the games for free last year, now becomes the gatekeeper for all Internet broadcasts of games. As part of the deal, though, fans get a $10 gift certificate to the MLB.com store. By contrast, NBA.com charges $30 a season for audio downloads of games, while on NFL.com, game broadcasts are free. Baseball broadcasts will also be available through Real Networks' $4.95-a-month RealPlayer Gold Pass. For another MLB.com fee, probably $20 for the season, fans get to edit video highlights.
Bowman says that he and his 120 employees will need to make team sites as "local" and hard-hitting as possible to lure new users. "There won't be any Major League Baseball pablum here," he says. But with such established competition as CBS.sportsline.com, CNNSI.com, and ESPN.com--to say nothing of the waning economy--Bowman just might need A-Rod's advice on how to score big in the clutch.
By Tom Lowry in New York