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Tue, March 19

Column: Baseball surpassing NFL as revenue leader

The Associated Press/<br>David J. Phillip<br>When Bud Selig, left, was named interim commissioner in 1992, MLB grossed $1.2 billion annually. In 2007, the league will surpass the $6 billion mark.

The Associated Press/<br>David J. Phillip<br>When Bud Selig, left, was named interim commissioner in 1992, MLB grossed $1.2 billion annually. In 2007, the league will surpass the $6 billion mark.

It's being referred to as the "new" NFL, a comparison intended as a compliment. But Major League Baseball might be willing to settle for this: The revenue leader among major league team sports.During the World Series, Commissioner Bud Selig announced that total baseball revenue in 2007 will surpass $6 billion. The NFL is expected to generate $6.3 billion in 2007-08 (numbers are calculated for the season, with the football season overlapping calendar years). But baseball's figures do not include revenue that clubs aren't required to report to MLB. Included in those unreported figures is revenue from regional sports networks, such as the Yankees' YES and the Red Sox' NESN. If those figures were included in the total revenue figures, MLB would be the clear leader in revenue.That's right. MLB generates more revenue than the NFL. Who would have thunk it a mere five years ago, when baseball was crying poverty, allegedly awash in red ink, and championing the contraction of two franchises as a means of "saving" the game.How did MLB reinvent itself? The first thing to remember is that the gloom and doom broadcast in the past wasn't as bad as presented. MLB had reasons for painting the finances red: It was fighting with the players' union over how to distribute revenue, with Congress over the anti-trust exemption and drug testing, and internally over how to foster "competitive balance," what the NFL calls "parity."Labor peace has been a strong contributor to MLB's financial success. Baseball is facing 16 continuous years of labor peace (through 2011), a far cry from the work stoppages - eight in 30 years - that once dominated the headlines. Competitive balance is a reality, thanks to revenue sharing that approaches $2 billion. Seven of this year's eight playoff teams were playing golf last October. Only the Yankees repeated and they couldn't make it out of the first round.Good business decisions also contributed to MLB's financial health. CNN/Money's Chris Isadore reported that, baseball's internet arm which was created in 2001, generated half a billion dollars this year. And maybe, just maybe, a smug and satisfied attitude by the NFL, which in recent years has been battling its players union, retired players, and among itself over revenue sharing, contributed to baseball's rebirth.For MLB, the future seems even brighter than the past. The two New York stadiums will open in 2009, generating hundreds of millions of dollars in additional revenue. Internet revenue will continue to increase. The tentatively named Baseball Network will debut in 2009 with an expected subscription base of 50 million homes - 15 million more than the NFL Network - netting MLB a projected $100 million in the first year of operation.Revenue from international operations is certain to rise exponentially as MLB prepares to open the regular season next year in Japan, play exhibition games in China, and conduct the second World Baseball Classic in 2009. And attendance, which fell 500,000 short of 80 million this year, is expected to rise as more franchises field competitive teams.These are heady times indeed for the once and perhaps future national pastime. But there are a number of storm clouds on baseball's horizon. The performance-enhancing drug issue - soon to take center stage with the expected release of Special Investigator George Mitchell's report - might yet diminish fan and sponsor support. Bloated contracts, like A-Rod's expected 10-year, $300-400 million deal, could lead to a wave of over-spending that would negate the revenue gains. And baseball could emulate the NFL and become enamored of its own success.In the meantime, Selig, who draws few accolades in this space, is entitled to crow. When he was named interim commissioner in 1992, MLB grossed $1.2 billion in revenue and was quickly losing its grip on the nation's sports fans. No one is suggesting that Selig is solely responsible for the 500 percent increase in revenue in 15 years. But as the man at the top, he's taken his share of the hits for baseball's missteps over the years. Today, Selig can take a well-deserved bow.(Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University and teaches the Business of Sports at the University of Wyoming. Jordan can be reached at

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