League and Team
The irony is inescapable. The sport that is often scorned as too old-fashioned for modern times was the one that began streaming every one of its games way back in 2003. Streaming was so new that YouTube’s first video was still two years away.
And Bud Selig, the Major League Baseball commissioner who pushed MLB’s digital strategy, is a guy who’s about as comfortable around a laptop as an American League pitcher forced into the batter’s box.
“Commissioner Selig has a great sense of humor,” quips his successor, Rob Manfred. “The fact he made a set of decisions that pushed baseball into the digital age and to the forefront of digital platform in sports was a source of great amusement to him — given that he didn’t use any of it.” (Indeed, Manfred discloses that, after he took over the job in 2015, he sent the first text Selig said he had ever received.)
Major League Baseball’s digital prowess may be a source of amusement, but, today, it’s mostly a source of enormous financial gain for MLB.
The genesis of MLB Advanced Media (MLBAM) dates to 2000 and what would become an $80 million investment paid by MLB franchises over time.
By 2003, MLB.com offered fans a $79.95 full-season package and, that year, became cash-flow positive. By 2008, according to Sports Business Daily, the owners’ initial investment had been recouped. The line graph goes up, up, up from there. Today, MLBAM and the newer MLBAM Tech are each worth billions.
The MLB game streams and other offerings, such as the MLB At Bat app, have as many 3.5 million subscribers.
Like the success of Facebook and YouTube, MLBAM sounds like a fluke. Did Selig recognize how big the streaming operation would become? “Honesty impels me to tell you we had no idea,” Selig says, also crediting BAM’s recently departed top executive, Bob Bowman. “I know, the first five years, I held everything together, but it’s been legendary. Unbelievable.”
In real ways, baseball’s on-field changes are evidence of media’s influence. The replay challenge inaugurated under Selig makes video a part of the story, not only at stadiums but also in living rooms and on mobile devices. The playoff system, the wild card, and splitting the leagues into three divisions ended up creating a new batch of contenders and, arguably, some of the postseason’s most riveting and highly viewed games.
Selig had owned the Milwaukee Brewers prior to being named commissioner in 1992. He was ready for the fastballs.
“You knew things were changing and evolving,” he says. “In my 23 years, watching the drama and the growth, it’s a great story. I’m very proud.”
New efforts under Manfred are attempting to pick up the pace to satisfy in a fast-paced video age. Viewers accustomed to two-minute YouTube videos won’t wait for anything — even the next pitch — very long.
“One thing that Mr. Selig understood was how to balance the people who are interested in the history and tradition of the game with the need for the game to evolve and change,” he says. “I think replay is a great example. It got to the point that fans and viewers at home were ready for the change.”
Branching Out From Baseball
MLBAM’s massive streaming-infrastructure advantage caught the eye of content creators outside the sports world. In 2012, Forbes.com called it “The Biggest Media Company You’ve Never Heard Of.” Eventually, it was providing the service for WWE’s bouts, ESPN3.com, Turner Broadcasting’s portion of March Madness, and more. MLBAM actually purchased the right to stream NHL games.
HBO turned to MLBAM in 2015 when it saw how complicated and complex it would be to build its own system for the new HBO Now. And, this year, The Walt Disney Co., in separate transactions, agreed to buy a 75% interest in spinoff MLBAM Tech for a reported total of about $2.5 billion. It can use it for ESPN and the Disney competitor to Netflix that it’s planning.
According to estimates, each MLB team will reap a $50 million windfall from the Disney transaction, although MLB also keeps a small stake in MLBAM Tech.
Selig’s time as commissioner coincided with the apex of cable sports, when Fox Sports and regional networks created new intense competition with ESPN and broadcast networks for league contracts. At the same time, television networks and advertisers began to recognize that sports is an increasingly rare example of content that viewers choose to watch live.
“In 1970,” Selig recalls, “you had a simple little local contract, and I mean simple and I mean little. The national contracts were very small.” Now he marvels at “the evolution of sports contracts. Oh, my goodness. I’ve worked with great people: Dick Ebersol, Chase Carey, Ed Goren. I could go on and on.”
He then repeats a figure he likes to throw out there: “When I took over in 1992, our gross revenue was a billion two. When I left [in 2015], it was about $11 billion. And baseball’s popularity, as evinced by attendance and gross revenues, has grown to heights we could have never imagined. Never.”
What makes Selig different as a media mogul is that, first and foremost, he’s a baseball man, as he is quick to point out.
Here’s a snippet of the speech he gave when he was inducted into Baseball’s Hall of Fame in July:
In many ways, baseball has been my life. I got into baseball 53 years ago for the simplest reason of all: I wanted to bring Major League Baseball back to my hometown. I made it my mission, my quest, and I devoted five long years in a relentless effort.
We would try and we would fail; we would try and we would fail; we would try and we would fail. But we would never quit.
And that day when the Brewers arrived — March 31, 1970 — will forever be one of the proudest days of my life.
I was able to do something I loved every day with great passion. I loved the baseball life. I loved living and dying with each game. I loved watching players come in as nervous rookies and grow and mature, to become winners in all sorts of ways and to take their place on this stage.
I loved getting to know everybody: the field managers and the ticket managers, the players and the scouts, the sportswriters and the fans.
Selig has certainly had his low moments: the players’ strike in 1994 and baseball’s steroid crisis probably top the list. But he notes that baseball is better for it now. Baseball’s drug-test rules are now the toughest in sports, in his opinion, and the strike resolution led to subsequent agreements that have kept labor peace for more than two decades.
Those labor concerns must still be fresh in his mind. These days, the 83-year-old Selig is a traveling man. He teaches Legal Issues in Major League Baseball Since World War II at Arizona State University’s law school one day a week, Professional Sports Law at hometown Marquette University’s law school on another day, and Major League Baseball and American Society Since World War II at the University of Wisconsin on a third.
Baseball is his life, both on the field and off. “Everybody knows my passion. But I knew it was a business from day one. That didn’t affect me. Because I’ve also been a fan since day one.”