MLB revenues continue to rise despite decline in popularity, while NPB lags behind
TOKYO — Overall attendance in MLB has suffered yet another decline. The MLB total of 64,556,636 in 2022 marks the lowest attended season since 1997 when paid attendance was 63,168,689 and was a drop from the all-time high of 79,502,424 in 2007. And this was in a year when Aaron Judge captivated baseball with his pursuit of Roger Maris’ single-season home run record of 61, and Albert Pujols drew nationwide attention while he went after his 700th career home run, reaching 702, to become the fourth in history after Babe Ruth who hit 714, Hank Aaron with 756, and Barry Bonds who has 762. Sadaharu Oh has 868.
Then of course there was Shohei Ohtani who in 2022 did indeed truly have the greatest MLB season of all time — in fact, the best season in any sport ever, given his pitching and hitting performance.
Baseball in Japan has been on a different trajectory. Attendance at NPB games reached an all-time high in fact in 2019, just before the pandemic hit, with a total of 26,536,962 paying spectators over 856 games, not including the post-season. (This compared to Major League Baseball which led all sports leagues in 2019 before the pandemic hit with over 68,494,895 million paying spectators over 2,430 games. NPB had a better attendance by game average: 29,300 vs 28,830. NPB attendance in 2022 was 21,071,180 in 858 games.)
The reason for this increase is that fans in Japan like the in-stadium experience with the energetic oendan, or cheering groups, going non-stop for nine innings. “It’s like being at a festival,” said Satoshi Gunji, 60, an executive who regularly attends games at Meiji Jingu Stadium, noted for its organized umbrella waving fans groups in the right field stands
American by contrast have grown weary of the recent version of the game with its focus on 100 mile-per-hour fastballs and steady stream of strikeouts. The hit-and-run has virtually disappeared from the game. Stolen bases are increasingly rare. Defensive shifts have resulted in the lowest batting averages since 1968, making games too predictable
Rising ticket prices are another concern.
On the other hand, MLB has become hugely more profitable than NPB.
Thirty years ago the two leagues were almost equal in terms of gross revenue at around $1.5 billion. But now the MLB is over $10 billion while NPB has yet to hit the $2 billion mark.
One reason for this, is that in the early 90’s major league teams embarked on a systematic plan to build new stadiums funded by local taxpayers, many of the MLB complexes resembling theme parks which the whole family can enjoy. Each MLB club keeps the revenue from ticket sales, parking, naming rights, advertising and merchandise sales.
This contrasts uncomfortably with the NPB where most teams must rent the use of the stadium and stadium owners pocket much of the revenue.
Moreover, MLB employed a number of different measures to monetize the game and maximize profits, including lucrative regional and cable TV deals and Internet streaming of games, which has further served to boost revenue.
MLB is designed to be a profit-making enterprise. MLB teams plow much of their profits back into improving the product so as to attract more fans.
NPB teams, by contrast, exist essentially as advertising vehicles for parent companies. The Yomiuri Giants for example feed their profits back to Yomiuri Shimbun, which uses them to prop up areas where newspaper sales are lagging, as in Nagoya.
TV ratings and revenue have declined considerably since the 60’s, 70’s and 80’s when 25 million people — nearly a quarter of the population — watched Yomiuri Giants games on nationwide TV every night. Now games are mostly telecast on cable with viewership in low hundreds of thousands. Younger people don’t have the patience to watch baseball on TV. Going to the park is one thing where the atmosphere can be electric, with the oendan, but on television, baseball is an old man’s pastime.
The average age of an MLB fan is in the late 50’s. Younger people like sports with more energy, a faster pace and require shorter attention spans. According to the Daily Trojan, just 7% of MLB viewers are under the age of 18.
However, MLB is monetized in so many different ways in contrast with NPB, that fan attendance can drop every year but overall revenue will keep rising, as will the value of the team. Selling advertising patches on MLB uniforms is just the latest new revenue stream. Perhaps you noticed the Motorola patches on the jerseys of Yu Darvish and that of other San Diego Padres players in the playoffs this year. It’s the wave of the future. And next year MLB will begin selling helmet decals to sponsors. Soon they will all look like NASCAR drivers.
To give you one example of how team value keeps rising, L.A. Angels owner Arte Moreno purchased the team in 2003 for $183.5 million. So if he sells it as he indicated he might, he would make a nice profit as the market value of the Angels two decades later is around $2.2 billion according to Statista — this despite the miserable performance of the team in recent years.
In case you are interested, the New York Yankees are the richest team in MLB valued at $6 billion, followed by the Dodgers at $3.4 billion. The Yomiuri Giants are valued at several hundred million.
MLB is also making changes to address declining stadium attendance.
Pitch clock: The idea is to cut down on lengthy three-hour games. Fifteen seconds for the pitcher to throw the ball with the bases empty and 20 with runners on base. This will not only make the game faster but will make it more difficult for the pitcher to get set and therefore aid the hitter. Experiments in the minor leagues have cut game times down by 20 minutes.
Eliminating defensive shifts: This is to give the batter more of an advantage: it turns out that most MLB batters can’t hit to the opposite field against a 100-mile-per-hour fastball when there are four infielders on one side of second base. (Batters could learn to bunt, one might say, but that would be asking too much of modern day big leaguers.)
Enlarging the bases from 15 square inches to 18 square inches. The idea is to encourage baserunners to think of stealing bases more, and making it less likely first basemen will be spiked by baserunners on infield ground balls This was tried in the minor leagues and stolen base attempts increased from 2.23 times per game and a 68% success rate to 2.83 and a 77% success rate, according to USA Today.
Coming soon. An automatic strike zone.
However, MLB failed to address one big reason why the sport has lost its appeal. Pitch counts. By the fifth or sixth inning the two best athletes on the field, the starting pitchers, are out of the game, and a succession of no-name relievers shuttled in from AAA pitch the rest of the game. Boring. Old line MLB fans long for the days of stud pitchers like Nolan Ryan, Tom Seaver, Steve Carlton, etc, who pitched the entire nine innings.
One thing is clear, however, whether these changes work or not.
MLB will continue to make money. Lots of it.
MLB once conducted a survey that revealed the average fan only watched a game for 20 minutes at a time on TV or Internet. Even so the deals keep coming in.
MLB struck streaming deals with Apple and NBCUniversal’s Peacock in 2022 which would bring in $115 million annually. Merchandise hit an all-time high. Gambling on MLB is also skyrocketing.
A major league executive once told me in in confidence, “We could play baseball to empty stands and still make money.”
The NPB has seen some of its own changes. Softbank owns its own stadium. Nippon Ham is building a new one. The Pacific League has established a joint venture —Pacific League Marketing — to provide video distribution service for mobile phones and PC’s — but has been unable to achieve collective management of terrestrial broadcasting rights. Individual team management continues.
For those who can read Japanese, Itaru Kobayashi, a former SoftBank Hawks executive, has just published a book “Yakyuu No Keisai Gaku” which explains these issues in detail. Itaru is a former pitcher for the Lotte, one of the very few individuals to graduate from Japan’s elite Tokyo University to have played professional baseball in Japan. He also has an MBA from Colunbia University,