Despite concerns about declining viewership, Major League Baseball (MLB) has been setting new records in terms of revenue. In 2021, the league generated an impressive $9.56 billion, with an average revenue of $319 million per team. This upward trend continued into 2022, with the league making nearly $11 billion during the season, setting a new record.
Factors Contributing to Revenue Growth
The MLB's revenue growth can be attributed to several sources such as broadcast rights, merchandise sales, ticket sales, and sponsorships. Despite the decline in game attendance, the league has managed to increase its gross revenues significantly. This is largely due to lucrative TV deals with media partners like FOX, ESPN, and Turner. These long-term broadcast deals have become the most important source of income for the league.
The Impact of Revenue Sharing
One of the key aspects of MLB's financial structure is revenue sharing. Currently, teams contribute 48 percent of all local revenues, which are then divided equally among all 30 teams. This system aims to level the playing field between larger and smaller market teams. However, this has also led to some controversy, with players arguing that revenue sharing encourages teams to not invest in player salaries or field competitive teams.
The Decline in Viewership
While the MLB's revenue continues to grow, the league has been grappling with a decline in viewership. The MLB All-Star Game viewership has hit a low in five of the past seven years. Analysts attribute this decline to the sport's struggle to appeal to younger viewers, with the average age of a baseball fan in North America being 57.
The Future of MLB Revenue
Despite the current financial success, there are concerns about the sustainability of MLB's revenue growth. Critics argue that the league is increasingly relying on sources of income that have little connection to the actual playing of baseball games. If the league continues to prioritize non-baseball sources of income over fielding winning and entertaining teams, it could potentially alienate fans and impact future revenues.