Major League Baseball hit a home run financially in 2022, propelling itself to a new record for … [+]
Major League Baseball hit a home run financially in 2022, propelling itself to a new record for revenues.
After two years of revenues being adversely impacted by the pandemic, the business of baseball rebounded out of the pandemic faster than a ball off the Green Monster at Fenway Park.
Before any expenses, MLB saw revenues of between $10.8-$10.9 billion, a new record that has been confirmed by the league. The increase surpasses the previous record set in 2019 of $10.7 billion.
As of publication, net revenues – the more significant metric for showing available revenues after expenses – were not made available. The gross revenue figure was provided by sources that spoke on condition of anonymity due to the sensitive nature of the financial information within MLB that is privately held.
The figure is significant in that it shows MLB exiting the pandemic faster than anticipated, work by the business arm of the league to grow existing and new revenue streams, all while doing so in a year in which the season was cut short by one month due to a 99-day lockout by the owners as part of a labor dispute with the players over a new collective bargaining agreement.
After Game 3 of the 2022 World Series was rained out, commissioner Rob Manfred met with the media and as part of it said that league gross revenues would be just shy of $11 billion. With the final numbers, Manfred’s comments proved true.
The league’s ability to grow revenues two years after the start of the pandemic is in part due to timing around national media rights ending in 2021, opening the door to renewals from their three broadcast partners.
The 2022 season saw the first year of national media rights renewals with FOX, TBS, and ESPN. All told, the three account for $1.76 billion annually, a jump of nearly $250 million a season from the previous agreements.
While revenues from ESPN dropped $150 million annually with the new agreement, the league was able to plug the gap through new streaming deals. On top of the national media rights for television, MLB inked deals with Apple
AAPL
While media rights continue to be the largest sector for MLB revenues, sponsorship agreements played a critical role in the financial health of Major League Baseball in 2022. According to a report by IEG, the league had sponsorship gross revenues of $1.19 billion in 2022, marking a 5.6% increase over 2021 when the league started playing the season with capacity-limited ballparks due to the effects of the pandemic. The largest business sectors that partnered with the league included beer, insurance, technology, automotive, telecom, apparel, betting/lottery/gaming, non-alcoholic beverages, mortgage and brokerage, and wine and spirits.
The increase in gross revenues is striking as it comes at a time when game attendance continues to decline. While attendance jumped 42.3% compared to 2021 when the start of the season saw most ballparks at no more than 20% capacity, the 2022 regular season was down nearly 6% compared to 2019, the last season before the pandemic. Major League Baseball has seen attendance drop nine straight seasons when taking 2020 out of the mix. Since the last increase (+1.97% from 2011 to 2012) league attendance has dropped -14%.
While gross revenues are a barometer as to how much money is flowing into the league, for the purposes of how it relates to MLB player salaries, it is an invalid measure. Expenses are not factored in.
While I have been unable to obtain data for 2019-2022, the financial information provided by MLB and confirmed by the MLBPA for 2006-2018, shows industry revenues ahead of player salaries at the MLB, Minor League, and amateur levels and the percentage of those salaries to industry revenues for a given year.
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