ByDavid Perricone, Centenary University, Published by NJBiz, May 19, 2017 at 10:49 AM
Major League Baseball is big business. The industry’s revenues are projected to reach $10 billion this year, with 75 million fans expected to attend major league games this year. Team valuations are at record highs. Forbes estimates the average MLB team is worth over $1.5 billion, 19 percent higher than a year ago. The average baseball player earns $3.5 million a year. The Miami Marlins, currently up for sale, are expected to fetch well over $1 billion. And the MLB’s rich contracts with Fox, TBS and ESPN, which run until 2021, will generate $12.4 billion for the teams. By economic measures, this is the Golden Age for America’s national pastime.
But below the surface, troubling trends are evident.
According to Nielsen, the average age of baseball fans is 53 — the highest in all pro sports — compared with 47 for the NFL and 37 for the NBA. And half of that audience is over 55. Baseball is having trouble attracting the next generation of fans, especially among the millennials who gravitate to faster-moving sports like football and basketball — or televised e-sports competitions that draw millions of viewers. The time commitment required to watch a three-hour, nine inning game is tough to make, whether you’re watching at the ballpark or at home. And the average cost of $220 for a family of four to attend a Major League game (before paying for parking, food and souvenirs) makes it a special occasion, not a regular habit, for all but the most dedicated fans.
Declining participation in youth baseball is another worry. Between 2002 and 2013, the number of kids between ages 7 and 17 playing baseball dropped by 41 percent — the biggest decline in all youth sports. Less youngsters involved in the sport — as players or spectators — means less baseball fans in the future.
Major League Baseball is well aware of these trends. It is reaching out to support youth leagues and get more kids into the sport. It is revising the rulebook to speed up the pace of play, eliminating the need to throw four pitches for an intentional walk and pushing additional changes like pitch clocks, limiting managers’ visits to the mound and tightening up the strike zone.
All good ideas, but will they be enough to protect baseball from a long-term decline? There are a few more tactics MLB could apply that have worked to build customer traffic and loyalty in other industries.
First, how about dynamic pricing for ballgames, where ticket prices vary game to game based on projected demand? Higher prices for hot matchups that sell out the stadium with the true blue fans, lower prices for average games to attract the casual audience, fill seats that would otherwise go empty and, just perhaps, convert casual fans to repeat customers.
Concerned about how season ticket holders will react? Give them the added perks like “meet and greets” with the players.
Baseball also needs to maximize the value of the live game experience. For hardcore fans, the energy and excitement of being at the stadium is enough, but casual fans and newcomers are looking for more. Most venues have focused on upgraded food options and family-friendly promotions like “Star Wars” nights. Technology can help personalize the live game experience — for example, by enabling fans to control replay views on their mobile devices. Why not appeal to millennials with e-gaming lounges where they can try out the latest version of “MLB: The Show” or step up to the plate against their favorite pitcher in a virtual batting cage?
To survive in the long term, baseball — and all pro sports — must evolve to meet the wants and needs of a new generation in a rapidly changing, digital world. Engaging fans with technology and amenities and making sensible adjustments to the rules to keep games moving are common sense steps and overdue.
David Perricone is an assistant professor of sports management at Centenary University. Prior to joining Centenary University in 2011, Perricone was with the New Jersey Devils hockey club for two decades. He started as an intern and worked his way up to senior director of merchandising. He holds an MBA from Fairleigh Dickinson University and a Bachelor of Science in business administration with a concentration in sports management from Robert Morris University.