As baseball grows in popularity in the U.S. and abroad, issues related to the sport are bound to arise. For additional insight into the challenges facing the sport, frugal advice for enjoying the ballgame and predictions on which teams will triumph, WalletHub asked a panel of leading sports experts, including Nathaniel Grow, assistant professor of legal studies at Terry, to weigh in.
What follows an excerpt from that interview.
WalletHub: What are the biggest issues facing MLB today? Where do the rise of regional sports networks and the emphasis being placed on modern stadiums rank?
Nathaniel Grow: One of the biggest issues facing MLB today is how it will handle the transition from its current television broadcasting model - one in which it relies heavily on lucrative cable broadcasting contracts signed with regional sports networks - to a future where streaming digital content over the Internet is king. While MLB is an industry leader in online streaming video, it still caters to the regional sports networks to a large degree. For instance, MLB currently prohibits fans from watching their local team(s) play over the Internet, instead forcing those fans to purchase cable packages to see their teams’ games.
Fans are increasingly pushing back against this model, however, and instead want to be able to watch MLB games wherever, and in whatever manner, they choose. MLB has been trying to figure out a solution to this problem for nearly a decade, but any attempts to allow fans to watch their local team play via the Internet have been met with strong push-back from the regional sports networks, who want to be the exclusive outlet for a home team’s games in its local market.
If MLB can’t find a suitable solution to this problem soon, it may find that its hand will be forced, as a class action lawsuit challenging these practices is currently working its way through the courts, with a trial likely sometime in the next couple years. It will be interesting to see how this issue plays out.
How do you think the Hall of Fame will treat steroid-era players? Who is more likely to be inducted: Pete Rose or Barry Bonds?
I think that the steroid-era players will eventually be inducted into the Hall of Fame, but it may not happen for a couple decades. In the short term, Pete Rose is probably the more likely inductee, as it appears that MLB Commissioner Rob Manfred may be more willing to reinstate Rose to baseball than was Manfred’s predecessor, Bud Selig.
What about gambling and fantasy sports? Is MLB embracing legalized gambling, at the very least in the form of daily fantasy sports sites like DraftKings and FanDuel?
All of the major U.S. professional sports leagues, including MLB, are currently reevaluating their stance on gambling. The leagues view league-sponsored gambling as a potentially lucrative new revenue source.
In fact, it recently came to light that MLB owns a share of the daily fantasy sports site DraftKings. It may be more difficult for MLB to fully embrace gambling given its history - including the Black Sox gambling scandal in which Chicago threw the 1919 World Series - but it certainly appears that the league is slowly moving in that direction.
What is your take on the time-based contract structure used by MLB, as well as the various other spending constraints imposed by the league?
The Major League Baseball Players Association has always worked very hard to protect the players’ financial interests, so MLB’s current contract system reflects a long-standing compromise between players and owners. Because teams control their players for the first six seasons of their careers, players initially have very little negotiating power and thus are paid relatively little compared to the more established stars in the game. But once a player has earned the right to free agency, he can then sign with whichever team he chooses, often for tens of millions of dollars.
Historically, this system worked pretty well, especially for the players. In recent years, though, the players have begun to receive a smaller share of MLB’s overall league revenues. While the players historically received 50% or more of league revenues, they are receiving less than 40% today. This decrease is the result of a variety of different factors, including increased revenue sharing between MLB teams (decreasing the incentive for larger market teams to sign free agent players to lucrative contracts).
The players’ share of revenue is likely to be a big issue in the next round of collective bargaining between players and owners scheduled for 2016. Recent history says that the two sides will likely resolve the issue without a work stoppage, but the possibility certainly exists that MLB could soon see its first labor stoppage since the infamous strike in 1994.
The full interview is available online.