MLB Pwns the Interwebs
Say what you want about Bud Selig and Major League Baseball. It’s easy to criticize. MLB’s Web site is absolutely top-notch and, frankly, is far and away the best of any of the four leagues because of all the digital media it offers — from the growing archives to almost every single game live during the season.
As far as I understand it, the NHL is the only league that’s starting to come around with its Web site in terms of digital media. MLB.com is light years ahead of the NFL in offering its fans a lot of options both on the Web and on TV — no example is better than the much-publicized and griped about NFL Network, which only 33% of U.S. viewers even have access to. Anyway, I knew MLB.tv was raking in the money, but, as I learned today, the success of baseball’s internet portal is far beyond even my wildest estimates.
It’s also a highly lucrative venture. MLBAM, commonly referred to as “BAM,” packs an increasingly potent financial wallop. The company, created in 2000 to operate baseball’s digital assets, became profitable just three years after its founding and boosted its revenues by more than 60% the last two years, from $236 million in 2005 to at least $380 million this year.
MLBAM’s growth has put some money into the pockets of all 30 clubs, which split profits evenly and have already been paid back the start-up cost of $80 million, or nearly $2.7 million each. More significantly, the company has become a huge asset, not just as a marketing tool but also as a bona fide investment.
When team owners considered taking MLBAM public two years ago, initial public offering estimates by investment bankers ranged around $2 billion-$2.5 billion. Now that number approaches $5 billion — which would translate into more than $150 million per team — and only figures to continue growing.
Within the same USA Today article, business of baseball guru Maury Brown pretty much nails it with his assessment of MLB’s success. “It’s baseball’s biggest success story that just doesn’t get enough play. And it’s something they have major bragging rights on.” Indeed. Consider that the revenue MLB.com generated in 2007 — around $380 million — is equal to Forbes’ valuation of the Chicago White Sox and is greater than exactly half of baseball’s franchises. Impressive.
Fist Pound: PostmanE at the MLB FanHouse
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