While researching the topic for Major League Baseball use for digital media, I came across this interview from Bloomberg.com
But underneath it, I saw a Forbes.com article that said: “MLB approves New Digital Media Company Spin-off That will create Billions in New Revenues”.
So CEO and President of MLB Advanced Media (a company I didn’t know existed) mentions how the MLB “At Bat” app is the number one downloaded sports app out there today. Then I see MLB Owners are going to make billions, with a b, off a new digital media spin-off…My head almost exploded because being a Mets fan, all I’ve been hearing for years is the ownership of the team crying from the ridiculous amount of money (that will never be accurately disclosed) they lost in the Bernie Madoff Ponzi scheme. Making this team unable to sign major contracts.
So I did some digging. And what I found was that the sport that was: “Too slow”, “too boring”, “dying due to lack of youth participants” and “only old people watch it”, was the King of Streaming Media! With revenues totaling $800 milllion with targeted revenues reaching $1 billion in 2016! Key brands in corporate America hire them for content infrastructure, and are a data analytics firm that rivals Bloomberg. Their mobile technology makes them one of Apples key partners and has been used at keynotes for their product launches!
MLB Adavanced Media or MLBAM was launched in 2000 and was funded by the 30 clubs for what was supposed to be $1 million a year each for 4 years, totaling $120 million. But MLB’s web presence generated excess revenue in by 2003 only mdaking the cost $75 million before they started seeing a return on their investment. They were on to something.
By 2014, the clubs were making $7-$8 million annually each.
Bowman, saw that he had something that no other professional sports league had, a massive amount of inventory. 162 games, 30 teams, there was a market for in-house streaming that could become a critical revenue stream for baseball. And that is how MLB.TV was created.
Launched in August of 2002, the first game pulled in 30,000 viewers. The continued on with only 9 games that were pennant races during that September. In 2003 they were able to offer a full season of games, but for only one device, PC’s.
In 2009 though, they released an update to their app, the aforementioned “At Bat” to iPhone and streaming video took off. In 2014, this app is on over 400 devices, and will pass over 2 billion live games streamed in 720p live HD. That is 125 million streaming live games per year.
People started drinking their Kool-Aid.
In April 2015, MLBAM enabled 100 million streams to unique viewers of these services to third-parties that are all part of a big media strategy that includes, among other things, a sizable direct to consumer offering: March Madness for Turner, Wrestlemania as part of the WWE Network, and The Blaze 24/7 linear news stream. Not to mention prize fighting pay per views, and also backend infrastructure to WatchESPN, the ESPN Mobile app for streaming live sporting events. Including the 1 million concurrent viewers during the last two Team USA World Cup matches!
But two other major things happened on top of all this and more:
Did you hear about the unprecedented, historic event this past August? It was one of the most unfathomable things to ever happen in professional sports. Groundbreaking even! You would think something like this would have had a major press conference and been the number one story on all of sports and regular news…
Well, instead it happened via conference call.
On August 4th, 2015 the National Hockey League (NHL) sold their media rights over to MLBAM. That’s right, a competing sports league sold their entire media rights to another sports league. Think about that for a second…
For $600 million, NHL would receive 7-10% equity in BAM Tech. (I will get to that in a minute) In return, MLBAM would have the rights to distribute live out of market games, including through the NHL Game CenterLIVE and NHL Center Ice Subscription services in the US and certain international markets. MLBAM will operate NHL.com, including the seven native language sites, and each teams websites! (Teams will still have editorial control)
Forbes.com put it best when it said: “It’s here that the evolution of a media company begins to move into a larger phase. Yes, the deal with the NHL is at its core, a pure media rights deal, bit it is the fact that MLBAM is purchasing content that is critical to understanding what is about to unfold”.
And what unfolded was approved a week later.
MLBAM’s Board of Directors, which is comprised of owners of the franchises, approved the earlier mentioned spin-off that will create billions in new revenues for MLBAM: Bam Tech.
Unlike MLBAM, Bam Tech will not focus on baseball content at all. How MLBAM already provided “white label” solutions to HBO for HBO Now, the OTT services of the network, as well as the earlier mentioned sporting events such as March Madness and WWE.
Bam Tech seeks to be a massive content outlet that may eventually partner with the likes of Apple, or even head out on their own to negotiate with other distribution channels.
What does this mean? A whole lotta money for the owners of MLB. And not one dime is generated through baseball itself…
What does this mean to me? Just another reason for me to bitch about the Mets not spending money this off-season.