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The cost of baseball's broadcast rights in 1961

Since OOTP allows us to configure media revenue in historical leagues, I figured some of you would be interested in this fascinating look at television and radio broadcast fees and sponsors back in 1961. To say that things have changed a great deal in 52 years would be a grand understatement, as this chart attests:

http://assets.sbnation.com/assets/31...-chart-big.jpg

Consider that the majority of these broadcast rights are at or below the current league minimum player salary! Some things don't change, however. Beer companies are still the largest advertisers, although most were single-market operations, not the mega global breweries of today. What has changed is that tobacco companies used to be big advertisers, too. Legal regulations have confined Big Tobacco to the dustbin of advertising history. And while it's no surprise to see a fair share of automobile manufacturer sponsors, modern viewers/listeners would be plenty surprised if an ad for an oil company popped up on their broadcast - something that would have been perfectly normal in 1961.

It's interesting to see that advertisers had similar fears about the future marketability of the game as they do today. Ticket prices were rising while ratings were declining. That's not true of all markets today, but it's certainly true in some markets (Houston, I'm looking at you). Production costs were rising, as was competition with other sports. (Humorously, the article from Sponsor magazine that forms the basis of this story lists bowling and jai-alai as sports whose rise in popularity threatens baseball.)

But the most prescient concern expressed is probably this one: "Both the daytime and nighttime viewer have more programing from other channels from which to choose." Consider that this was written in an era when most viewers were lucky to have three channels (NBC, ABC, and CBS) on their dial. Fast forward to today, when my AT&T U-verse guide runs from channels 1 through 9999. That's to say nothing of the preponderance of other available forms of entertainment: PCs, consoles, tablets, smart phones, on-demand television and movies, iPods capable of holding an almost unlimited number of songs, etc., etc. And this is just a partial listing of entertainment options that don't require people to leave the comfort of their own homes.

Given this, it's interesting to see how broadcast rights fees have skyrocketed in recent years (highlighted by the Dodgers' massive deal with TWC). Some speculate that the growth is unsustainable, yet RSNs show no let-up in their willingness to pony up for broadcast rights. Clearly, advertisers still believe they can make money through live sports programming, and baseball remains a focal point of their spending. Indeed, TWC believes it so much that they are willing to bet 23,333x the amount that was spent on broadcasting Washington Senators games back in 1961. Time will tell if they bet wisely. In the meantime, this is a really neat window back into an under-examined component of baseball's history.

I sent the link to that whole article to LGO earlier today. It's interesting.

While I haven't seen this particular article before, I am familiar with the numbers. When I said some years back I spent a fair amount of time digging up various baseball financial data, I wasn't kidding. ;)

The industry publication Broadcasting (later Broadcasting & Cable) used to do an annual estimate of the broadcast rights fees of MLB clubs. These were reprinted in The Sporting News from about 1956 through to about 1980. In the March 14, 1962, issue of TSN, for example, it printed the 1962 rights fees estimates, along with the figures for 1961 and 1952 for comparison. (Broadcasting itself would publish its estimates up until 2003 or so.)

If you're interested in a few more figures for comparison, here's a table showing the local and national broadcasting amounts from 1962-91, as given in the book Pay Dirt: The Business of Professional Team Sports by James Quirk and Rodney D. Fort.

Code:

RADIO AND TELEVISION INCOME

(in thousands of dollars)



       Total               Grand

Year   Local   National    Total

--------------------------------

1962   12,775    4,000    16,775

1963   13,000    5,200    18,200

1964   14,325    7,000    21,325

1965   15,970    9,700    25,670

1966   17,335    9,750    27,085

1967   17,125   11,800    28,925

1968   18,340   12,700    31,040

1969   21,690   15,500    37,190

1970   21,850   16,240    38,090

1971   22,450   18,000    40,450

1972   23,085   18,000    41,085

1973   24,405   18,000    42,405

1974   25,245   18,000    42,245

1975   26,200   18,000    44,200

1976   26,700   23,000    49,700

1977   28,900   23,000    51,900

1978   29,300   23,000    52,300

1979   31,500   23,000    54,500

1980   39,000   41,000    80,000

1981   48,100   41,000    89,100

1982   64,600   53,000   117,600

1983   94,700   59,000   153,700

1984  105,400  163,000   268,400

1985  115,800  161,500   277,300

1986  140,100  181,500   321,600

1987  154,400  196,500   350,900

1988  157,600  206,500   364,100

1989  232,000  246,500   478,500

1990  250,000  362,500   612,500

1991  252,500  367,500   615,000

The early national broadcasting revenue consisted of one package for the All-Star Game and World Series rights, which was divided equally between the clubs, and another for the CBS and NBC "Game of the Week" telecasts, which, while nationally broadcast, the money from which only went to the home club in each particular telecast. This situation persisted until 1965, after which the monies were divided equally between all the clubs involved in the telecasts. The first truly comprehensive national broadcasting—consisting of the All-Star Game, World Series, and regular season games together in the same package—was in 1969.

Note that the figures in the above table are only estimates, and appear to understate the revenue in some cases. Here are the local and national broadcasting revenues according to MLB's own figures for certain years:

Code:

(in thousands of dollars)



       Total               Grand

Year   Local   National    Total

---------------------------------

1988  213,200  210,500    423,700

1991  307,427  350,991    658,418

1992  313,749  376,627    690,376

And for comparison's sake, the figures for 1994—the strike season and the ill-fated launch of TBN—and 2006.

Code:

(in thousands of dollars)



       Total               Grand

Year   Local   National    Total

---------------------------------

1994  248,000   52,000    300,000

2006  837,000  935,000  1,772,000

In the April 11, 1996, issue of The New York Times there was a interesting little table published. It was the operating revenue, expense, and profit (loss) for MLB from 1976 to 1995. Would anyone like to know the figures? :)