MLBAM has been running multiple commercials during inning breaks for the last month or so (it used to be one ad per break). I’m still not sure why this took so long, considering Yahoo has been selling these spots for two years now.
Their average CPM rate is about $20. That’s not horrible, but it’s also not even close to the $50+ that Hulu charges.
There are still no local ads, meaning you’re still going to see the same few commercials over and over again. This is the problem with having one centralized ad seller; while each of the thirty teams would obviously try to sell to their existing sponsors, it’s simply not worth Yahoo or BAM’s time to expand its sales staff to the point where they can have a real presence in local markets.
This also means little or no targeting, which helps explain the relatively low CPM rate.
In the end, how much money will BAM make off of this? Not all that much. Let’s say they make anywhere from $100 million to $150 million from MLB.tv. In order to gross even $50 million off of ads, they would have to produce 2.5 billion ad impressions, or about 1,800 per subscriber. Assuming each game has about 70 video ads (four per commercial), that means the average MLB.tv subscriber would need to watch twenty-five full games per year, and I’m going to bet the under on that one. We also don’t know what percentage Yahoo gets, but it’s likely very substantial.
Long story short, this isn’t a huge business for BAM yet — but it could be. They definitely need more distribution of MLB.tv (cough…embeds), and could also use a more dispersed sales team.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
posted by Shawn Hoffman, on September 29th, 2009 at 11:52 am, in category 1
Probably. And before the Greinke mob comes to bite my head off, hear me out.
First, Greinke is not “leading the league in everything,” as everyone seems to be saying lately. He’s leading the league in ERA, FIP, and HR/9 — all of which are pretty intertwined, of course. But Halladay is leading the AL in innings pitched, BB%, K/BB, and, most importantly, xFIP.
The difference between the two, on a raw level, is HR/FB. According to THT’s numbers, Greinke is at 5.6%, while Halladay is at 11.4%. Does Greinke deserve credit for that? Sure, I guess. But Halladay’s HR/FB has been better than Greinke’s every single year of Greinke’s career until now. So if we regressed enough to find their “real” skill levels, does anyone think we’d see such a massive difference (or any difference at all, for that matter)? If we’re going to disregard fluky BABIP numbers, shouldn’t we be doing the same for HR/FB?
There’s also another issue in play here, and I brought it up last year when I picked Halladay over Cliff Lee: Halladay has to face the toughest competition of any starter in baseball. Here are the standings, for pitchers with >150 innings. There’s no mystery here: the top six are all from the AL East. Greinke is number 23 (or at least was last night, when I wrote this), which is still very respectable — he’s ahead of C.C. Sabathia, for one. But Halladay still has a pretty significant edge.
So it really just depends on how you look at it. I don’t think it’s wrong to say that Zack Greinke has been the best pitcher in the American League this year. But I also don’t necessarily think it’s wrong to say Roy Halladay has been the best pitcher in the American League this year. It’s really just a matter of taste.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
posted by Shawn Hoffman, on September 28th, 2009 at 11:52 am, in category 1
I wrote a lot about the A’s last winter, and not just out of stathead Billy-bias — they were legitimately one of the more interesting teams, apparently trying to win just a year after Beane had talked endlessly about their rebuilding process. They spent a lot of money (in their terms) to bring in Jason Giambi, Matt Holliday, Orlando Cabrera, Nomar Garciaparra, Russ Springer, et al, none of whom seemed to fit with a tear-down-build-up strategy.
By now, you know how this story ends — the team is once again just a few games under .500, equally far from the playoffs and a top five draft pick. Giambi, Holliday, and Springer are gone, with only Holliday generating a significant return.
So on the surface, things went horribly wrong. But take another look: the A’s have actually outscored their opponents by 16 runs, meaning they should probably be around 80-76 instead of 75-81 (BP’s third-order standings concur). That, of course, is still in mediocre-no-man’s land. But what if Giambi and Holliday had produced as expected?
Using the simplest measure possible, Giambi was projected for 12.8 VORP this year; A’s first basemen have actually produced -9.6. Holliday was projected 34.7 VORP; A’s left fielders have actually produced 20.1. Altogether, that’s a 37 run shortfall, or about four wins. Tack four wins on to their Pythag record, and project it out over 162 games, and you have an 87-win team.
Now, that still wouldn’t be enough to make the playoffs. But based on the third-order standings, that puts them in first place. And remember, coming into the season, everyone figured high-eighties could win the AL West.
So maybe this is grasping at straws. But we’re not making any outlandish assumptions; Giambi fell apart, but Holliday has crushed his projection just as much as Giambi fell short of his. Had the A’s simply matched their Pythag record, and kept Holliday, they’d at least be in the thick of the race. Had the Angels also been near their third-order record, the A’s could actually be in first place.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
posted by Shawn Hoffman, on September 23rd, 2009 at 08:20 am, in category 1
I’m a big fan of SB Nation, as I’ve said time and time again. Off the top of my head, I probably have around eight or nine SBN blogs in my Google Reader, and I read most of them religiously. I’m also on record as saying ESPN should try to buy them, which I’ve had thrown back in my face recently now that ESPN is spending a lot of money on its local sites in Chicago, Boston, Dallas, L.A., New York, and who knows how many others down the road.
This is obviously a huge threat to SB Nation, considering that their primary value right now is their local analysis (they’ve started angling more toward national coverage, particularly with their new homepage design, but that is a massive uphill climb, and I’m not sure they’ll ever really win with that). But ESPN’s new local focus may also be the greatest opportunity they’ll ever have.
Here’s the difference between ESPN and SB Nation: one is a “professional” site, with professional journalists and fact-checkers who are paid full-time salaries to do what they do. The other gets its content from part-time bloggers, most of whom make a couple hundred bucks a month or less, and do it because they’re extraordinarily passionate about their teams (or other subjects, in the case of BtB or Driveline). The content you get on Posting and Toasting is very different than anything you’ll ever see on ESPN New York, and to be honest, I prefer P&T to any “professional” analysis of the Knicks.
So while their goals might be the same, I still think they can be complementary. If I were running SBN, I’d be looking to create the same kind of distribution deals with ESPN’s local sites as they already have with Yahoo, USA Today, and others. ESPN might not be totally cool with users leaving their sites to go to SBN’s, but that’s just the thing: if people do prefer SBN content, then it’s a natural buy for ESPN anyway, and what better place to test it than ESPN’s own properties?
The other question is, will ESPN be comfortable with non-”professional” bloggers? I really don’t know the answer to that, but at some point in the future, they’ll have to be, especially if the sub-fee-gravy-train ever gets derailed.
In the end, SBN’s blogs have differentiated, high quality content, along with incredibly engaged user bases. If ESPN is smart, they’ll see the value in that, and start making the appropriate inquiries.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
posted by Shawn Hoffman, on September 22nd, 2009 at 11:47 am, in category 1
Seems that way, if you believe Sports Business Daily. SBD ran a piece last week estimating that advertisers spent about $2.6 billion on NFL TV advertising in 2008, which, as Maury points out, is about $500 million less than they’re paying for the rights to broadcast the games.
So what’s going on here? Some possibilities:
Advertising was way down. Given what was going on in the world last fall, we can be pretty certain that total ad dollars dropped from ‘07. Could it have dropped 16% (i.e. enough to make ‘07 breakeven for the networks)? Sure. Compared to other forms of media, that actually wouldn’t have been so bad. But there are a couple of reasons I’m not buying that: 1) sports broadcasts have generally been considered very resilient through this recession, and 2) most of the ad buying was likely done before the financial system exploded last September.
The networks are still using the NFL as a loss leader. This was a common strategy in the ’90s, but almost out of necessity, since the rights fees were simply growing faster than the resulting ad dollars. Sports have been considered far more robust properties in recent years, and you don’t hear TV execs complaining about the “winner’s curse” anymore. Maybe the value really is in promoting your other shows — the networks certainly do a lot of self-advertising during NFL games. But to the point where they’d be willing to run at a 15-20% deficit? That seems unlikely.
ESPN is throwing the numbers off. This is the one I’m betting on. Think about it. ESPN, by virtue of being on cable, gets the smallest audiences for its games, but pays far more, on a per game basis, than any other network. There’s almost no way they’re even coming close to making it back purely on TV advertising. But that’s not their goal anyway. Their business model is to make ESPN completely irreplaceable, and then charge cable carriers ridiculously high subscriber fees. Whatever they make on advertising, be it on TV or online, is gravy.
So blame it on ESPN. That doesn’t really answer our initial question, since we still don’t know how well the ad-only broadcast networks are doing with their deals. But I’d bet they’re coming out close to even in the recession, and a good bit ahead in normal years.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
First off, let me thank everyone who came out last night, particularly Neal Huntington and Dan Fox, who answered questions for nearly two hours — even going a bit past game time. The audience came well prepared, and there really were no limits on the Q&A — Neal, Dan, and farm director Kyle Stark were extremely candid with their responses, discussing trades they’ve made (have you heard about those?), how they evaluate players, and what their plans are going forward.
I also want to thank Will Carroll for emceeing. If you’ve never seen Will in action, it’s a lot of fun — at one point after the Q&A, Will had about two or three times as many people surrounding him as Neal and Dan did.
As for the game, I guess if you joke that Albert Pujols is going to come in and hit a game-winning pinch hit home run enough times, it will happen. And why not? In nine years at PNC Park, he’s yet to make a single out (or at least it sure as hell seems that way).
All in all, a really fun night, and I have a strange feeling that we’ll be back in the Burgh at some point in the not-too-distant future.
Or we’ll hardly notice a difference. Here’s the thing: two-thirds of the NFL’s revenues come from national sources (i.e. the broadcast deals, licensing, etc.). That compares to about one-fifth for Major League Baseball, where there are obviously large payroll disparities between the top and bottom teams.
Let’s assume that the NFL’s 32 teams bring in $7.5 billion in revenue (as Forbes contends), that means $5 billion, or $156 million per team, comes from shared sources. Even if the difference between top and bottom is as large as Forbes makes it out to be (the Lions and Vikings really only did $50m in net local revenue?), that’s still nothing, on a relative basis, compared to MLB.
On top of that, there is an enormous middle class: 29 teams within $50 million of each other, which, translated into payroll dollars, means about $25 million. That’s not so much larger than the current gap between the cap and the floor, meaning that aside from the Redskins, Patriots, and Cowboys, the spending gap really shouldn’t change that much.
There is, however, one significant thing that may change: the percentage of revenues spent on player salaries should actually go down, over time. Think about it; a team’s performance only impacts their local revenue, which is only 1/3 of the total pie. So if logic holds, in a truly free market for talent, the NFL would pay their players a far lower percentage than in MLB, where teams need to draw fans and sell their own local broadcast rights in order to survive. But right now, MLB is actually lower than any of the other major sports leagues, despite having the highest local revenue percentage, and being the only one that is uncapped.
So while there’s sure to be some outrage when the Cowboys and Redskins start bidding up every free agent they can find, the other seven divisions won’t see much of a change. Now if we can just bring everybody down from those ledges…
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com