MLB Insider

December 18, 2008

Financial Crisis – Not in The Bronx… MLB Network and the Hot Stove

Bud Selig has been overseeing Major League Baseball as it’s commissioner since 1992 albeit for the first six years under the terms as “acting.”  He oversaw baseball through the strike of 1994, the introduction of the wild card, interleague play and the merging of the National and American Leagues under the Office of the Commissioner.  Selig was also instrumental in organizing the World Baseball Classic in 2006 and the introduction of revenue sharing.  He is credited for the financial turnaround of baseball during his tenure with a 400 percent increase in the revenue of MLB and annual record breaking attendance.

There are other things that Selig has accomplished during his tenure as Commissioner, some good some and some bad – but the one thing that he’s not been able to accomplish is a salary cap.  With revenues at an all-time high, the second highest attendance level on record, and as of late, the most parity, it seems a hard sell to say MLB needs a salary cap – although many will dispute this.

With today’s economy being such as it is, the only words out of the Commissioner’s mouth during last week’s Winter Meetings to his owners was to watch their spending and keep things realistic and in-line. 

The Commissioner even brought in former Federal Reserve Chairman Paul Volcker to warn the sport’s 30 owners about the extent of the decline. The Boston Red Sox aren’t raising ticket prices for the first time in 14 years, while the Washington Nationals are lowering the cost of some seats.  The Arizona Diamondbacks and Toronto Blue Jays fired a combined 55 front-office workers, according to the Arizona Republic and Toronto Star, and MLB’s headquarters in New York isn’t increasing spending for the first time in four seasons.

But the Yankees capped their spending without a second thought in regards to the economy crisis we’re all in.  Despite signing free agent C.C. Sabathia to the largest contract ever granted a pitcher (7-years, $161-million) and free agent pitcher A.J. Burnett (5-years, $82.5-million). 

You see, the Yankees can afford it…  The Yankees are not blind to the economic conditions.  They know their fans demand a winner and a repeat of not finishing in first place in the AL East or making the post-season in 2009 could result in fewer fans and less revenue from luxury suite sales.  As well, fewer fans results in lesser concession revenue.

The Yankees have what the other 29 major league teams don’t have.  They’re in a partnership with the Dallas Cowboys and Goldman Sachs Group in a food and retail company that was formed in October.  They have the Yankees Entertainment & Sports Network (YES).  They own 38 percent of the regional sports network, which pays them about $70-million dollars annually – and they also get some of the channel’s profits.

The New York Yankees are on a different playing field than everyone else.  Providing a winner translates into millions in advertising revenue, which they always get because they’re “The Yankees” and they always have plenty of cash flowing around – thanks to their ownership interest in the YES Network, which gives them more value than the stream of payments the other teams receive through their cable affiliate.

The Yankees can afford to spend because the franchise is moving into a new $1.3 billion ballpark that charges as much as $850,000 for one of its 47 luxury boxes and $2,500 for a seat behind home plate, which is likely to add an extra $200-million in revenue and almost $80-million coming off its league-leading payroll of $209-million from expiring contracts.  The stadium will include a steakhouse and Hard Rock Cafe and a conference center that will be open year round.

General Motors Putters Out         

Needing to cut its marketing and promotional budget by 20 percent, GM has called it quits and is letting its sponsorship of the Yankees lapse.  General Motors was a Yankees sponsor from 2006-08 and had already given the Pirates the heave ho and ended its $7-million per year relationship with Tiger Woods.

However, GM will continue to honor existing contracts with the Chicago Cubs and White Sox, Houston Astros, Milwaukee Brewers, Texas Rangers and Philadelphia Phillies, but these contracts expire at the end of this year, and those deals are being reviewed as well.  All advertising during the 2009 Super Bowl, Emmy Awards and the Academy Awards are off.  

General Motors is negotiating a new contract with the New York Mets as the three-year automotive sponsorship contract with that team, which covers signage at the stadium, ends this year also.  GMs Northeast region spokeswoman Andrea Canabal told Bloomberg.com that the company can’t afford to do both New York teams but they “still want a presence in New York.”

GM is being replaced by Toyota and Audi as the Yankees new sponsors. 

Meanwhile in Motor City, GM may be trying to exit or renegotiate the lease for its luxury suite at Comerica Park, home of the Tigers.  GMs suite runs through 2009 and is also a Tigers sponsor.  Comerica Park supports a Chevy sign and Chevy vehicles adorning the center field fountain.

Tigers spokesman Ron Colangelo said, “We’re sensitive to their situation, and we’re trying to be as flexible with them as possible.”

Tigers’ suites rent for $120,000 to $130,000 a year.   Amenities include seating for 18 people, free parking, a private restroom, interior and exterior television sets, a computer with Internet access, pre-game batting practice sessions with ex-Tigers pitchers, and a full catering menu (highlights: market fresh crudités, chilled king prawns, and black pepper and garlic-crusted beef tenderloin).

MLB Network

The long awaited debut of the MLB Network is just two weeks away (Jan. 1st, 6:00 p.m. EST) and for all of us baseball junkies in dire need of a baseball fix, it probably couldn’t come soon enough.  With a plethora of on-air studio personalities (see below), the MLB Network will be the largest in cable channel history; reaching 50-billion homes on the basic tier.

The network has rights to games on Thursday nights and will run 26 games throughout the season.  The network will focus on what it thinks are good games and rivalries early in the season, with a focus on more important games later on.

As for the post-season, MLB Network president and CEO Tony Pettiti said that the network will consider throwing its hat into the ring once playoff packages become available, but for now as baseball gets to the backend of the season, the network will follow the playoff chase.

MLB Network will select its games about 10 days before they air, as well as alternate games that will be telecast in the local markets so there are no blackouts.

MLB Networks’ signature show will be MLB Hot Stove during the off-season and MLB Tonight once the season gets underway.  MLB Tonight will start at 6 p.m. and run until the last game is over Monday through Saturday.  The show will feature live look-ins of games in progress, updates, highlights, reporting and analysis.  Hot Stove is the live, nightly off-season studio show and will feature news, reports, and analysis of the moves clubs are making and planning in preparation for the upcoming season.  Another show, Prime 9 is the countdown program which will air throughout each week.  Each program will breakdown the all-time top nine examples of its subject matter.

On-Air Talent

Studio Hosts: Matt Vasgersian, Victor Rojas

Analysts: Al Leiter, Joe Magrane, Harold Reynolds

Reporters: Trenni Kusnierek, Hazel Mae

MLB Network will go on the air at 6 p.m. ET on Jan. 1^st with a live, one hour Hot Stove studio show, immediately followed by Don Larsen’s perfect game in the 1956 World Series.

The game, which was televised on NBC, was thought to have been lost to history, but the network acquired the copy from a collector, and is running it intact, including the original commercials which feature some surprising athlete endorsements.  It will be the first time the contest has been televised since the day it happened 52 years ago. Yankees’ announcer Mel Allen and Brooklyn Dodgers’ announcer Vin Scully call the action. 

Here are some program offerings in January on the MLB Network:

Hall of Fame Election (Monday, Jan. 12, 2:00 p.m.)

The Hall of Fame Election Special will provide live coverage announcing the players who have been voted into the National Baseball Hall of Fame for the class of 2009 and a prime time special at 9:00 p.m. celebrating the careers of those elected.

Pride and Perseverance: The Story Of The Negro Leagues (Monday, Jan. 19, 9:00 p.m.)

On January 19, MLB Network will pay tribute to Martin Luther King, Jr. Day and air Pride and Perseverance: The Story of the Negro Leagues at 9:00 p.m. ET. This one hour documentary, never before aired, is narrated by Hall of Famer Dave Winfield.

Other MLB Network prime time programming includes (all times Eastern):

Prime 9 (Mondays, 8:00 and 8:30 p.m.):

This half-hour program breaks down the top nine all-time in a variety of areas in baseball history, such as players at different positions, great comebacks and unbreakable records. The show will premiere on January 5 with All-Time Centerfielders at 8:00 p.m., followed by All-Time Home Runs at 8:30 p.m.

Cathedrals of the Game (Mondays, 9:00 and 9:30 p.m.):

This half-hour show provides behind the scenes footage of the ballparks and spotlights historical moments in some of the cities throughout the nation. The show will premiere on January 5 with Busch Stadium in St. Louis at 9:00p.m., followed by Citizens Bank Park in Philadelphia at 9:30p.m.

Baseball Seasons (Wednesdays, 8:00 p.m.):

This series of one hour episodes showcases unforgettable years in baseball history within the context of the culture and society y of the time. The show will premiere on January 7 with a focus on 1995.

AL and NL Awards Shows (Wednesdays, 9:00 p.m.):

These new shows will feature spotlights on the 2008 American League and National League MVP, Cy Young, Rookie of the Year and Manager of the Year award winners, as chosen by the Baseball Writers Association of America. There will also be shows highlights the "Players of the Year" for both leagues.

In addition to these new shows, other weekly prime time programming will include Home Run Derby highlights on Thursdays at 8:00 p.m. ET and World Series highlights on Fridays at 8:00 p.m. ET. Weekend programming during the offseason will feature theme days, beginning in January with recent World Series games.

The complete program listings are available at www.MLBNetwork.com, where you can also find information about the entire network, their on-air personalities and much more.

Hot Stove Rumors

With the Winter Meetings behind us and for the most part left in Las Vegas, the Hot Stove is still very much hot as the likes of free agents Mark Teixeira, Manny Ramirez, Adam Dunn and a handful of others are still available.  Additionally, some teams’ notably the Padres are looking to lower payroll via trades.

As mentioned earlier, the Yankees cashed in with two free agent signings within 48-hours of one another, netting pitchers C.C. Sabathia and A. J. Burnett.  There is much speculation that an offer to Manny Ramirez is imminent, but until I hear about it, no sense talking about it.

Teixeira is being highly courted by the Red Sox, Angels and the Nationals.  Reports have the Red Sox offering an 8-year deal, the Angels at 8-years and at least $160-million and the Nationals 8-years worth $160-million.  Baltimore, hoping that Teixeira would enjoy playing near his hometown has brokered in with a 7-year deal between $140-150-million.

The Mets and Indians are among the interested clubs in pitcher Will Ohman.  Ohman is seeking a two-year deal.

The Minneapolis Star-Tribune reports the Twins are eying Ty Wigginton.  Wigginton is believed to be looking for a bigger contract than the 3-year, $17.5-million the Dodgers gave Casey Blake.

The proposed trade of Mike Cameron from the Brewers to the Yankees for Melky Cabrera apparently is off, the Milwaukee Journal Sentinel reported.

MLB.com reported that the Padres have interest in several free agents, particularly veteran middle infielders Omar Vizquel and David Eckstein among others, but likely won't make any moves until late January or early February.

Cardinals general manager John Mozeliak told the St. Louis Post Dispatch he would not allow the pursuit of free-agent closer Brian Fuentes to “create a paralysis” within the club’s search for pitching help.

The newspaper reported that the Cardinals have extended a two-year offer believed worth $16-million to $18-million for Fuentes, who earlier this week voiced a preference to pitch for the Los Angeles Angels. The Cardinals, according to the newspaper, may investigate the availability of former Los Angeles Dodgers closer Takashi Saito. The Dodgers failed to offer Saito a contract before last weekend’s deadline, making the former NL All-Star a free agent.