For Sale: The National Pastime

When baseball's risky little six-year, two-network, no-money-up-front, revenue-sharing, triple-joint-venture national TV deal was announced last Saturday, the perpetrators were ecstatic.

Bud Selig, owner of the Milwaukee Brewers and dc facto commissioner of baseball, raved about the new partnership with ABC and NBC: "I think this is the wave of the future. I think this is the way sports and TV are going to exist in the future. It's proactive. It's different."

Tom Werner, owner of the San Diego Padres and a member of baseball's TV committee, as well as a principal of Hollywood's Carsey-Werner Productions, echoed Selig, "We consider this arrangement to be a forerunner of what other sports might do."

Dick Ebersol, president of NBC Sports, told reporters, "I think your headline here is 'Baseball Goes Prime Time.' It's the first time that one sport's entire regular season and postseason will be seen exclusively on prime time."

Dennis Swanson, president of ABC Sports, crowed, "This is a package that's designed for the fans. It's as unique as an) arrangement ever created between a network and a major sport."

Despite such hurrahs, this is, in fact a sad and desperate piece of business for baseball. In 1990 baseball signed a contract yielding the richest rights fees in TV sports history—$1.06 billion from CBS over four years—only to see the deal sour into an embarrassment of low ratings, low public esteem and a high $500 million loss posted by CBS. So as the contract neared its conclusion, baseball was on the market, hat in hand, ready to sell itself to just about anyone who would buy in. "There'll be the automobile of Major League Baseball, the hotel chain of Major League Baseball, everything in baseball has to be client-friendly," says an executive from one of baseball's two new networks. The deal was so ill-conceived and remains so fraught with unknowns and so overwhelmingly loaded in favor of the networks that the possibility exists that baseball is in worse trouble than it was before. Consider these facts.

•For the first time baseball has made a national TV deal without a dime in up-front network money. Yet 1) the average team payroll has risen to $30 million, and players' salaries figure to keep climbing, at least for the moment; 2) CBS's $1.06 billion contract guaranteed 26 clubs (this year's expansion teams were excluded) a $14 million annual windfall in each of the last four years; and 3) all three networks did discuss some, but not much, money up front—about $120 million a year compared with the $265 million per annum that baseball now gets from CBS. "None of the numbers any of the three networks floated merited further negotiation," said Werner. Yet where will the money come from to cover those stratospheric payrolls?

•Baseball will now be forced to depend on a share of network advertising revenue to replace the huge guaranteed CBS contribution: It will get 85% of the first $140 million worth of commercial airtime sold, split the next $30 million with ABC and NBC, and keep 80% of all additional revenue. Yet 1) baseball's network TV ratings have fallen 15% since 1989; 2) over the past four years the U.S. advertising economy has been soft almost to the point of being rotten; and 3) many of baseball's brightest stars are widely perceived by the public to be greedy, surly louts—an image owners have helped to propagate by publicly denigrating their players. These negatives must be overcome for baseball to gain the revenue it needs to flourish.

•Baseball will not only share ad revenue but also will now be responsible for selling all the advertising time on its game broadcasts. It will attempt to do this through a separate corporate entity created as part of the new TV deal. This entity will have to compete with the far more established time-selling stall's at the networks, including those at ABC and NBC, which of course have other sports and events to sell to advertisers, often peddled in intricate, multievent packages. As Neal Pilson, president of CBS Sports, puts it, "The big piece of baseball advertising would be competing directly with the inventory of other sports and events a network has to sell." Can baseball really do better in the advertising business than advertising pros? Eddie Einhorn, vice-chairman of the Chicago White Sox, television producer and a member of baseball's TV committee, says, "We are down so far that we have to stop the slide. When you have to sell yourself cheap to a network, they're going to sell you cheap to an advertiser. We'll sell our inventory ourselves—no network guys included—and we'll get full value, believe me."

•To attract more network ad revenue, baseball has told ABC and NBC that it plans to create a round of wild-card playoffs, which would add some 20 postseason games. Such a radical schedule change will require approval of the Players Association, but the union was unaware of the new TV deal until it was made public. Donald Fehr, the president of the Players Association, was stunned by the owners' failure to tell him of the new deal in advance. "It's not disappointment," he said on Sunday, "it's sheer anger. It's obvious they value their relationship with the players less than they value their relationship with anyone. The players are right at the bottom." It is possible that the owners have pushed Fehr too far and that the players will strike over this issue in 1994, when their labor agreement expires.