The cost of baseball's broadcast rights in 1961

Corsairs · 08-29-2013, 09:26 PM

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:

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.

The Wolf · 08-29-2013, 09:46 PM

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

Le Grande Orange · 08-30-2013, 01:40 AM

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?

08-29-2013, 09:26 PM	#1
Corsairs Hall Of Famer Join Date: Aug 2007 Posts: 2,360	The cost of baseball's broadcast rights in 1961 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: 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. __________________ Founder of the Planetary Extreme Baseball Alliance (PEBA) Premiere OOTP fictional league where creativity counts and imagination is your only limitation Check for openings - contact us today! Join the PEBA

08-30-2013, 01:40 AM	#3
Le Grande Orange Hall Of Famer Join Date: Feb 2002 Location: Up There Posts: 15,644	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? Last edited by Le Grande Orange; 08-30-2013 at 01:42 AM.