Total revenue for Major League Baseball in 2016 approached $10 billion dollars, and represented a half-billion dollar increase over 2015. That rate of growth should continue in 2017, putting MLB in position to eclipse the 11-figure revenue mark.
2017 MLB Season will be Remarkable
The pieces are already in place to maintain last season’s revenue. MLB’s attendance has remained stable. MLB’s digital streaming products produce dependable revenue thanks to new in-market streaming capabilities. Those in-market streaming privileges are only available for half of MLB’s 30 franchises, but the other half of the league will catch up eventually. Revenue from television broadcast rights contracts is at an all-time high.
There is one aspect of 2016 that will be hard for MLB to replicate, however. MLB’s postseason television ratings were higher than they have been in over a decade. Part of that has to be accredited to the Chicago Cubs conquest of their World Series championship drought. Unfortunately for baseball, that phenomenon is a one-time affair.
That’s the lone piece of minor evidence to suggest that 2016 was an outlier. Everything else points toward revenue continuing to climb.
How Revenue Will Continue Growing in 2017
As television revenue is MLB’s primary source of cash flow, it’s the best indicator of future returns. Local ratings for individual franchises during regular season games are more important than postseason national ratings. MLB’s individual franchises negotiate their broadcast contracts based on those local ratings.
To summarize the state of those ratings, it’s great. 16 of the 29 MLB franchises in the United States of America ranked in the top three of their local television markets across all networks last season. The ratings also represented a one percent growth from 2015. It’s that kind of growth and performance that will keep broadcasters paying a premium. It will also spur new corporate sponsorships.
Television is just one of the ways in which MLB will eclipse $10 billion in total revenue next year, however. There’s another component of MLB’s business that will be an even more substantial boon.
MLBAM and Bamtech Exploding
Bamtech and its parent company, MLB Advanced Media, are the newest way in which MLB has diversified its business to reap huge rewards. Bamtech is quickly becoming the dominant provider of streaming content services in the United States.
Bamtech’s success means rewards for MLB. New partnerships with the Walt Disney Corporation and Riot Games have brought an influx of cash to Bamtech. Bamtech and MLBAM are owned by MLB’s 30 franchises. Last season’s profit’s split evenly between the teams was half a million dollars. With the new investments, and any yet to come, that payout will be even larger in 2017 and beyond.
All of these aspects combine to create the expectation that total revenue for MLB in 2017 will surpass $10 billion. If the current trends continue, there’s no reason to expect the rate of growth MLB is seeing to decline anytime soon.