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We're in the Money
2007-03-24 19:05
by Mike Carminati

It seems like Major League Baseball (or one of its subsidiaries) has been signing a new broadcasting deal almost on a daily basis this offseason. The latest and the one that drew perhaps the most attention was iN Demand and DirecTV fighting over the cable rights to MLB's "Extra Innings", their package for out-of-market games. That netted MLB $100M a year for seven seasons starting in 2009.

MLB International sold the international rights for the next three seasons to ESPN Star Sports (ESS) and Formosa Television (FTV). The terms were not released.

Baseball also signed a deal with Interactive Television Networks (ITVN) to broadcast condensed games and such. Again the terms were not released.

Under an agreement signed last summer, TBS will expand their coverage beyond the Braves to include the major-league playoffs as well as Sunday games during the season. This is part of a new seven-year, $3B agreement that also includes FOX and FOS Sports Net (FSN).

MLB.tv, baseball's broadband solution, also increased their base price from $79.95 to $89.95, which starts to get big when you realize that the service had 1.3 M subscribers in 2005 (the last published numbers).

It's no wonder we saw so many long-term, big-money contracts signed this offseason. Over the past decade starting position players have gotten older and aside from a minor speed bump in 2004-05, are making more and more money.

Witness this comparison between starting position players and players overall:

Yr Avg Salary Starting Pos Player Avg Age Starting Pos Player Avg Salary Avg Age
1997 $ 2,319,707 28.87 $ 1,228,920 28.68
1998 $ 2,344,540 28.85 $ 1,307,382 28.80
1999 $ 2,639,128 29.11 $ 1,499,823 28.76
2000 $ 3,184,919 29.25 $ 2,022,579 29.43
2001 $ 3,733,320 29.26 $ 2,278,131 29.49
2002 $ 3,971,637 29.62 $ 2,445,319 29.54
2003 $ 4,195,587 29.39 $ 2,577,109 29.49
2004 $ 3,997,719 29.68 $ 2,489,999 29.69
2005 $ 3,985,363 29.38 $ 2,690,104 29.82
2006 $ 4,392,251 29.53 $ 2,843,173 29.66

So I put together the total revenue and payroll per season from 1960 through 2006. I also projected the values for each through 2010 based on the growth witnessed in the last five seasons. I think the projections for each are rather conservative especially since a number of the more recent broadcasting deals have been without terms announced. But I think it gets the point across.

Note that I expressed the payroll as a percentage of total revenue and revenue above total payroll. Note that as the last CBA took effect in 2003, revenues started to grow more quickly than payroll:

YrTot Revenue Tot Payroll Payroll as % of RevenueRev above Payroll
1960 $ 82,252,247 $ 6,400,000 7.78% $ 75,852,247
1961 $ 83,228,116 $ 6,657,875 8.00% $ 76,570,241
1962 $ 97,759,323 $ 6,915,750 7.07% $ 90,843,573
1963 $ 95,377,983 $ 7,173,625 7.52% $ 88,204,358
1964 $ 100,913,452 $ 7,431,500 7.36% $ 93,481,952
1965 $ 108,313,618 $ 7,170,500 6.62% $ 101,143,118
1966 $ 124,723,890 $ 8,832,000 7.08% $ 115,891,890
1967 $ 121,420,451 $ 9,500,000 7.82% $ 111,920,451
1968 $ 118,806,820 $ 10,316,000 8.68% $ 108,490,820
1969 $ 149,785,848 $ 14,945,400 9.98% $ 134,840,448
1970 $ 164,798,944 $ 17,581,800 10.67% $ 147,217,144
1971 $ 179,046,518 $ 18,925,800 10.57% $ 160,120,718
1972 $ 167,672,960 $ 20,455,200 12.20% $ 147,217,760
1973 $ 189,103,466 $ 21,939,600 11.60% $ 167,163,866
1974 $ 196,174,007 $ 24,503,400 12.49% $ 171,670,607
1975 $ 207,191,118 $ 26,805,600 12.94% $ 180,385,518
1976 $ 227,722,354 $ 31,380,000 13.78% $ 196,342,354
1977 $ 301,047,495 $ 48,100,000 15.98% $ 252,947,495
1978 $ 340,872,097 $ 63,570,000 18.65% $ 277,302,097
1979 $ 378,161,493 $ 79,235,000 20.95% $ 298,926,493
1980 $ 403,421,625 $ 95,225,000 23.60% $ 308,196,625
1981 $ 275,808,343 $ 127,725,000 46.31% $ 148,083,343
1982 $ 485,842,237 $ 159,250,000 32.78% $ 326,592,237
1983 $ 566,130,556 $ 187,850,000 33.18% $ 378,280,556
1984 $ 673,883,047 $ 211,835,000 31.43% $ 462,048,047
1985 $ 736,017,014 $ 261,878,332 35.58% $ 474,138,682
1986 $ 800,817,294 $ 307,887,851 38.45% $ 492,929,443
1987 $ 949,297,683 $ 265,730,823 27.99% $ 683,566,860
1988 $1,036,040,279 $ 300,352,424 28.99% $ 735,687,855
1989 $1,175,215,974 $ 359,383,711 30.58% $ 815,832,263
1990 $1,415,666,400 $ 443,731,193 31.34% $ 971,935,207
1991 $1,546,395,170 $ 610,048,418 39.45% $ 936,346,752
1992 $1,629,771,703 $ 805,543,323 49.43% $ 824,228,380
1993 $2,023,542,594 $ 901,740,134 44.56% $1,121,802,460
1994 $1,297,283,077 $ 927,836,287 71.52% $ 369,446,790
1995 $1,322,735,160 $ 951,469,367 71.93% $ 371,265,793
1996 $1,880,975,932 $ 957,093,050 50.88% $ 923,882,882
1997 $2,069,285,062 $ 1,127,176,385 54.47% $ 942,108,677
1998 $2,406,258,660 $ 1,278,282,871 53.12% $1,127,975,789
1999 $2,510,459,394 $ 1,494,228,750 59.52% $1,016,230,644
2000 $3,363,005,077 $ 1,666,135,102 49.54% $1,696,869,975
2001 $3,158,236,725 $ 1,960,663,313 62.08% $1,197,573,412
2002 $3,692,017,848 $ 2,024,077,522 54.82% $1,667,940,326
2003 $3,131,707,307 $ 2,128,262,128 67.96% $1,003,445,179
2004 $3,469,359,243 $ 2,070,665,943 59.68% $1,398,693,300
2005 $3,801,405,288 $ 2,188,713,398 57.58% $1,612,691,890
2006 $4,135,313,738 $ 2,322,299,617 56.16% $1,813,014,121
2007 $4,429,049,647 $ 2,542,295,054 57.40% $1,886,754,593
2008 $4,692,888,799 $ 2,783,131,036 59.31% $1,909,757,763
2009 $5,074,317,064 $ 3,046,781,826 60.04% $2,027,535,238
2010 $5,374,581,437 $ 3,335,408,708 62.06% $2,039,172,729

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