Inside Baseball’s $12 Billion Business With MLB Commissioner Rob Manfred

Key Concepts

• MLB's business health and momentum
• International baseball market (Asia, Mexico, developing countries like India)
• Media rights deals (ESPN, Roku, potential MLB FAST channel)
• Rule changes and their impact on the game
• Black players in MLB and diversity initiatives
• Stadium issues (Oakland A's, Tampa Bay Rays)
• MLB Commissioner's role, challenges, and future plans
• Negotiation strategies and preparation
• Leadership and change management

MLB's Current State and Momentum

• Overall Health: MLB is experiencing significant "momentum" with an upward trend in business.
• Attendance: Total attendance in 2023 was over 71 million, up from 70 million in 2022, indicating a positive trend. While still below pre-pandemic levels (2017), the upward trajectory is encouraging.
• Revenue: MLB's revenue is approximately $12 billion.
• Demographics: The 18-34 demographic is up double digits across all platforms, showing improved engagement with younger audiences.
• Youth Participation: Increased youth participation is a crucial long-term indicator of the sport's health.

International Business of Baseball

• Three-Bucket Approach:
  • Asia (Japan, Taiwan, Korea): Developed professional leagues, strong economies, and established baseball culture. The Japanese professional league set an attendance record last year with 56 million people.
  • Mexico: Established baseball culture with opportunities to develop more players and drive broadcast interest.
  • Developing Countries (India): Focus on countries like India, leveraging the cricket bat and ball familiarity. The success of an Indian-born player drafted by Toronto could significantly boost baseball's development in India.
• Tokyo Series: The Dodgers-Cubs series in Tokyo had high viewership (25 million watched game one) and strong merchandise sales, demonstrating the international appeal of MLB.

Media Rights and Future of Broadcasting

• ESPN Deal: The relationship with ESPN is ending due to disagreements over promotion and content. Baseball Tonight was cut back, and MLB created "Around the Playoffs" to secure the last deal.
• Sunday Night Baseball: MLB aims to move Sunday Night Baseball to broadcast television for wider reach.
• New Media Interest: Strong interest from broadcast entities and New Media companies like Roku.
• Roku Deal: The Roku deal was pursued for its reach, as the cable universe shrinks.
• MLB FAST Channel: Envisioning an MLB FAST Channel across platforms to experiment with content distribution and audience engagement.
• Experimentation: The importance of experimenting with different media partners and content formats to understand potential returns.

Rule Changes and Their Impact

• Initial Criticism: Initial resistance to rule changes is expected, particularly from traditionalists.
• Pitch Clock: The pitch clock has improved the pace and action of the game, leading to increased acceptance and enjoyment.
• Overall Effect: The goal is to bring baseball back to its original appeal, making it more fun and engaging.

Black Players in MLB and Diversity Initiatives

• Decline in Black Players: Acknowledgment of the decline in the percentage of black players in MLB (down from 18% in 1991 to 6.3% currently).
• Investment: The key to reversing the trend is "investment" in playing opportunities in underserved communities.
• Draft Makeup: Progress is being made, with approximately 20% of top draft choices in the last five years being people of color.
• Minor League Development: Focus on ensuring these players progress through the minor league system and excel at the major league level.
• Player Promotion: MLB is working to promote its black players through social media programs and partnerships.
• Diversity Initiatives: Commitment to diversity initiatives, despite recent controversies.
• DEI Controversy: The removal of the word "diversity" from MLB's website was a strategic decision to avoid becoming a target of legal challenges, given the evolving legal landscape and guidance from the EEOC.
• Jackie Robinson Day: Jackie Robinson Day will continue to be celebrated as a symbol of progress and overcoming segregation.

Stadium Issues and Expansion

• Oakland A's: The A's situation is considered resolved, with the team moving to Las Vegas and a new stadium expected to open in 2028.
• Tampa Bay Rays: The Tampa Bay situation is more challenging, with the deal for a new stadium falling apart after a hurricane damaged the existing stadium. The immediate focus is on repairing the Tropicana Field.
• Expansion to 32 Teams: MLB aims to expand to 32 teams once stadium issues are resolved.
• Potential Expansion Cities: Nashville and Portland are potential expansion cities, with Portland needing to be in the Western time zone.

MLB Commissioner's Role and Future Plans

• Love for the Job: Manfred expresses his love for the job and his commitment to the sport.
• Retirement Plans: Manfred plans to retire at the end of his current term (in four years), believing that institutions benefit from fresh perspectives every 10-15 years.
• Advice to Successor: "Fasten your seat belt."

Negotiation Strategies and Preparation

• Preparation is Key: 75% of negotiation success is attributed to preparation.
• Understanding the Other Side: The biggest mistake in negotiations is focusing solely on one's own needs. Creative, win-win solutions are possible by understanding the other party's interests.
• Managing Momentum: Good communication creates flexibility, but it's important to manage momentum to avoid overcommitting.
• Pace: Pace is crucial; moving too slowly loses momentum, while moving too fast leads to mistakes.
• Analytical Data: Using analytical data to validate assumptions and avoid overpaying.

Leadership and Change Management

• Technical Competence: Leaders need in-depth knowledge of the areas they lead.
• Willingness to Undertake Change: The difference between a good and a great commissioner is the willingness to challenge the status quo and implement change.
• Risk Management: Change involves risk, and it's important to research fan sentiment and ensure that proposed changes are beneficial.

Notable Quotes

• Rob Manfred on MLB's current state: "I think that the single biggest word is momentum."
• Rob Manfred on the key to reversing the decline in black players: "If I had to give you one word it would be investment."
• Rob Manfred on his advice to the next commissioner: "Fasten your seat belt."
• Rob Manfred on the difference between a good and great commissioner: "I think the the difference between a good commissioner and a great commissioner is the willingness to undertake change"

Technical Terms and Concepts

• FAST Channel: Free Ad-Supported Streaming Television channel.
• DEI: Diversity, Equity, and Inclusion.
• EEOC: Equal Employment Opportunity Commission.
• WBC: World Baseball Classic.

Synthesis/Conclusion

The interview with MLB Commissioner Rob Manfred provides a comprehensive overview of the current state of baseball, its challenges, and its future direction. Key takeaways include the sport's positive momentum, the importance of international markets, the evolving media landscape, the need to address diversity issues, and the significance of strategic leadership and change management. Manfred emphasizes the importance of preparation, understanding the other side in negotiations, and being willing to take calculated risks to drive progress and ensure the long-term health of the game.