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It’s not as lucrative as I had expected, or at least not yet. Here’s the key number: MLB is charging cable providers about 24 cents per month per subscriber, as compared to 88 cents for the NFL Network (apples-to-apples), and $3.65 for ESPN (apples-to-bowling-balls, but still relevant for perspective’s sake). That means MLBN will bring in about $150 million in subscriber fees next year, which is about half of what I thought they could get.

Let’s compare that to the NFL Network, which by all accounts is reeling financially and has been universally deemed a failure to this point. The network is available in 42 million homes, but is not on Comcast’s basic tier. This means that customers can choose to pay for it on their own, but are not automatically saddled with it when they sign up for Comcast cable (MLB Network will be on the basic tier for all 50 million homes it reaches).

Let’s say that two-thirds of those 42 million homes are Comcast (probably a high-end guess). That means that the NFL Network is on the basic tier in 14 million homes, collecting $0.88 per subscriber per month. This adds up to about $148 million annually, or almost equal to MLB Network before a single Comcast customer has purchased it.

This doesn’t necessarily mean MLB Network is doomed to fail. Having a larger audience means greater advertising potential (SNL Kagan estimates $50 million in 2009). And the NFL may have a cost structure that is completely out of line with revenues, given that they probably expected greater penetration by this point.

But this also isn’t a ringing endorsement of MLB Network’s business model, at least not for 2009. $200 million is significant, but it’s not even half of what MLB Advanced Media will bring in this year. Find another cable network that is making more online than it is through their traditional revenue streams.

The future picture is a bit mixed, as well. Keep in mind, the cable providers are all major equity holders in the network; they have every incentive to pass on an extra 25 cents per month to subscribers, if it will mean big profits (and possibly even dividends) from MLBN. But how much longer can networks keep charging monthly fees, when more and more content is available for free online? As much as cable is viewed as the last stronghold of old world media, it too might be in its final days.

If done right, MLB Network could be a tremendous growth engine for baseball. But it could have been an extremely profitable venture from day one, and now it seems like it won’t be.

Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com

4 Existing Comments

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  1. on January 1st at 04:54 pm
    toad said:

    Doesn’t MLB figure to have more viewers than NFL? A 162 game schedule generates more news, more highlights, etc., than a 16-game schedule.

  2. on January 2nd at 02:10 pm
    El Guapo's Ghost said:

    “MLB Network will be on the basic tier for all 50 million homes it reaches.”

    I had to pay an extra $13.95 to get MLBn on Comcast. It was a part of the I think “expanded digital basic”, but I’m also on an odd Comcast system since I was an Adelphia customer so my circumstances may be somewhat unique. If not, this could be a big win for the cable companies.


    Once MLB got in bed with the cable operators, they were only going to make $ from ads. The NFLn getting pushed from the basic tier even with regular season games must have scared MLB and I can’t blame them.

    My timeline might be off, but I’m suprised MLB didn’t set up a partnership with only Cox and Comcast. They could have used the Braves sale, as they did with the new TV deal, to still get MLBn on Time Warner’s basic tier.

  3. on January 2nd at 02:40 pm
    Shawn said:

    El Guapo,

    You might be right on this. I’ve heard from a couple of Comcast subscribers that are saying the same thing. I’ll try to figure out what the story is, but regardless, the rest of the financial numbers I posted have been corroborated by multiple sources (This might mean the Comcast subscribers aren’t counted in the 50 million? Tough to say.).

  4. on January 10th at 02:27 am
    kyle said:

    i was just googling my way around the internet to find an answer to this question, because i too do not have mlbn on comcast (for free at least). i’m a new comcast subscriber, less than a year now, so i think it’s possible we may all be in the same boat. perhaps if it also had an hd version i’d consider paying for whatever the hell tier it’s in, but as is, i can’t see that happening. at least i know it’s not just me/my area getting jobbed, if only i actually knew why.

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