RealGM

Major League Baseball is projecting gross revenues of $7 billion for 2010, continuing a run of record-breaking year, and bucking the chilly economy. Attendance for the league was ostensibly flat in 2010 (down 0.42 percent), with the Mets seeing steep declines, and the Yankees lowering premium ticket prices from “ultra-expensive” to just “expensive” this season, if projections hold true, MLB will see a jump of $400 million from this year to last. In 2009, final revenues were $6.6 billion up from $6.5 billion in 2008. The increase from 2009 to the projected 2010 figure is a remarkable 6.06 percent increase, an incredible jump in an economy that continues to run chilly.

How were the increases reached? Sources at Major League Baseball say one big component is local television deals that have annual escalators. The other is for expiring TV deals in the very competitive market where regional sports networks (RSNs) are clamoring for more live content, there are significant increases.

One would expect firm numbers by the beginning of next year, but it’s very clear that projections of a “glum” year were far off the mark. Even if the projections were off by a large sum, the league will see one of the largest increases in total revenues, ever. And, reaching the once unfathomable $7 billion mark is now in reach.

LittleOzzy wrote:Could it also be with more channels more games are being shown from teams that don't normally have every game covered?

The Jays for example next season will have every game available plus spring training games, so that should add up too.

The biggest story LWIB was the report in USA Today that the Texas Rangers and Fox Sports Southwest (FSSW) had reached agreement on a 20 year extension of their current deal which would pay the baseball franchise $3 billion. Maury Brown of the Biz of Baseball was very quick to question the reported dollar figure, he wrote that …some have said that the figures could be off – possibly wildly. As the day progressed, reporters received confirmation from Fox that a 20 year extension had been agreed upon but the $3 billion figure was “wildly inflated”. Nobody from either side would go on the record but numerous reports pegged the value of the deal at $1.6 billion. Reportedly, the extension takes effect after the 2014 season while the Rangers will receive an upfront payment - again reportedly, of approximately $80 million - before next season.

The Rangers current deal with FSSW was concluded in 2000. That deal pays the Rangers $17-$20 million annually (some reports cite $300 million over 15 years, others $250 million over the same) for their local cable TV rights. Only 10 years later Fox has agreed to QUADRUPLE (or more) their rights fee for Rangers baseball. This enormous and rapid increase in the value of the Rangers local TV rights is the most recent example of the critical importance of Regional Sports Networks (RSNs) to the biz of baseball. In 06, the Angels agreed to a 10 year/$500 million deal with FSN West. In 07, it was the Mariners and FSN Northwest agreeing to 12 years/$500 million. In 08, it was the Tigers turn when FSN Detroit agreed to pay a reported $400 million for 10 years.