Often referred to as America's national pastime, professional baseball has existed in the United States since the mid-1800s. By 1903, two major leagues had formed, the National League (NL) and the American League (AL). Each contained eight teams, and in 1903, the two leagues held the first postseason championship series, which is now referred to as the World Series. Today, both leagues are still in existence and together they make up Major League Baseball (MLB).
The AL consists of the following 14 teams: Baltimore Orioles, Boston Red Sox, Chicago White Sox, Cleveland Indians, Detroit Tigers, Kansas City Royals, Los Angeles Angels, Minnesota Twins, New York Yankees, Oakland Athletics, Seattle Mariners, Tampa Bay Rays, Texas Rangers, and Toronto Blue Jays. (The Blue Jays, based in Canada, are the only MLB team that is housed in a country outside the United States.)
The NL consists of 16 teams: Arizona Diamondbacks, Atlanta Braves, Chicago Cubs, Cincinnati Reds, Colorado Rockies, Florida Marlins, Houston Astros, Los Angeles Dodgers, Milwaukee Brewers, New York Mets, Philadelphia Phillies, Pittsburgh Pirates, San Diego Padres, San Francisco Giants, St. Louis Cardinals, and Washington Nationals.
One of the unique aspects of MLB is that it is the only professional sport league in the United States that is exempt from the country's antitrust laws. In 1922, the Supreme Court ruled that baseball was not a sport engaged in interstate commerce, thus the reason for the league's antitrust exemption. This exemption has meant many things to baseball over the years. For instance, MLB has never faced a strong rival baseball league, while other professional sport leagues such as the National Football League, National Basketball Association, and National Hockey League have all faced competitor leagues throughout the years.
Additionally, the antitrust exemption has allowed the league to maintain its own minor league system. When players are drafted and signed to their first professional contract, they are limited to the rules of MLB, and their only alternative is to play for an independent league, which does not generally lead to a career in the major leagues. Because MLB has created a monopoly of sorts over young talent, it is extremely difficult for any rival leagues to emerge. Another benefit of the antitrust exemption is the historical stability of the league's franchises. The exemption prevents owners from moving their teams to other cities without the league's approval.
Since the late 1800s, baseball has shared a special relationship with the mass media, which have provided the sport with a vast amount of coverage and promotion. Between 1878 and 1898, the sports pages underwent a sevenfold increase in newspapers. Baseball received the majority of the coverage, thus spreading the game's popularity. Both baseball and the media benefited from this relationship, as the increase in coverage resulted in an increase in both game attendance and the number of newspapers sold.
Following the boom of coverage in newspapers, baseball helped introduce the American public to the radio in the 1920s. Radio stations located in cities with MLB teams began broadcasting games live, and by 1924, some teams began providing regular game programming with multiple local radio stations. For example, the Chicago Cubs provided access for five local radio stations to broadcast their games live in the late 1920s. Radio broadcasts helped bring the game into homes of people who didn't live close enough to a ballpark to regularly attend games, thus increasing the popularity of the sport.
Baseball shared a similar mutually beneficial relationship with early television in the 1940s. By the 1950s, television stations were able to offer live broadcasts of games, once again increasing the reach and popularity of the sport. Ultimately, mass media played a major role in the global popularity of MLB.
Although the league is made up of teams in different cities, the league headquarters are located in New York City. MLB has been run by a commissioner since 1921, the first of whom was Kenesaw Mountain Landis, a U.S. District Judge from Illinois. The commissioner position was developed with the understanding that the individual in this post would be empowered to investigate any situations thought to be detrimental to the game of baseball, as well as take any actions deemed appropriate to remedy such situations. The commissioner's decisions were to be final and could not be challenged in court by the MLB teams.
Within the commissioner's office are six additional leadership positions, including president and chief operating officer, and five executive vice presidents, one each for baseball operations, business, labor relations and human resources, finance, and administration (the latter is also chief information officer).
Since Landis's 23-year reign as commissioner, there have been eight more individuals serving in this position, including: A.B. “Happy” Chandler (1945-51), Ford Christopher Frick (1951-65), General William D. Eckert (1965-68), Bowie Kent Kuhn (1969-84), Peter Victor Ueberroth (1984-88), A. Bartlett Giamatti (1988-89), Francis T. Vincent, Jr. (1989-92), and current commissioner Allan H. “Bud” Selig, who has officially served in the position since 1998, and has announced that he will step down from the role following the 2012 season. From 1992 to 1998, he served as the chairman of the Major League Executive Council, which has the authority to govern the MLB in the absence of a commissioner. At the time of his appointment as head of the Executive Council, Selig was also the president of the Milwaukee Brewers.
Selig's term has been marked with both highs and lows. He represented the league during the players strike of 1994, resulting in the first cancelled World Series since 1904. Critics are also quick to point to the MLB's mixed performance during the enhancing drug and steroid crisis of the 2000s—while Selig's supporters counter that the commissioner has brought about positive changes in the league. One such change is the inclusion of interleague play between the AL and NL, allowing teams to play against teams outside of their league that they would otherwise only have the opportunity to face in the postseason. Interleague play brings many revenue-generating opportunities to the league.
For example, inner-city rivals such as the NL Chicago Cubs and AL Chicago White Sox play a sold-out interleague series every year, enriching a cross-town rivalry that both teams can capitalize on in their sales and marketing efforts. In other cities where only one team exists, it allows hometown fans the chance to see a team play live that they would otherwise never see without traveling to that particular city.
Other changes brought about during Selig's term include revenue-sharing measures among baseball clubs, a three-division format in both leagues, an extra tier of postseason playoffs with the creation of the Wild Card, merging the AL and NL administrative functions into the commissioner's office, and granting World Series home field advantage to the team representing the winning league in the annual All-Star Game.
As noted, critics cite Selig's time as commissioner as one in which he allowed performance-enhancing drugs and steroid use among MLB players to run rampant in the league. The years 2000 and beyond are commonly referred to as baseball's “steroid era.”
Following the discovery that single-season home run record holder Mark McGwire of the St. Louis Cardinals used the steroid androstenedione during the 1998 season when he hit a record 70 home runs, MLB implemented a random drug-testing program for its minor league clubs in 2001, with the penalty of a 15-game suspension upon the first positive test, 30 games for the second positive test, 60 games for the third, a one-year suspension for the fourth offense, and a lifetime ban for the fifth offense.
In 2002, MLB and the players union agreed on MLB's Joint Drug Prevention and Treatment Program, and at the beginning of the 2003 season, a supposedly anonymous test was given to every player on each team's 40-man roster to determine the extent of the steroid problem in baseball. The results showed that approximately 5 to 7 percent of the tests were positive, and then the league set forth mandatory testing with consequences for those testing positive, a first in MLB history. The following years brought forth more allegations of steroid use among many of the league's best players, including Barry Bonds and Roger Clemens.
The U.S. government also became involved in the situation, with the House Government Reform Committee calling a hearing in Washington for MLB executives and players to testify on the topic of steroid use in the league, and former U.S. Senator George J. Mitchell conducting a 21-month investigation into the use of performance-enhancing drugs in baseball. The resulting 311-page Mitchell Report contained the names of 89 players who were believed to have used performance-enhancing drugs, as well as 19 recommendations for moving forward and strengthening the MLB drug policy.
While the amount of players testing positive for steroids has gone down slightly since the results of the report were made public, it remains to be seen what long-term effects the report will have on MLB in terms of player drug use as well as public perceptions of the league as a whole. One good sign for the league came with Street & Smith's SportsBusiness Journal's 2009 Reader Survey, in which nearly 40 percent of respondents indicated that they felt MLB is a stronger property now than it was five years ago. An additional 10 percent of readers rated it as a “much” stronger property. Only about 22 percent of respondents felt it was a weaker property. In the same report, however, 25 percent of respondents indicated that the biggest challenge for the league in the future will be steroids and drug testing.
Throughout the 2000s, MLB attendance figures hit all-time highs. The 2007 season marked the league's highest attendance figures ever, with a total of 79.5 million fans visiting ballparks across the country. The following year marked the second-highest attendance total in league history, with 78.6 million fans. The next season fell prey to the U.S. recession; MLB attendance fell by 6.65 percent in 2009, reaching the lowest league attendance since 2004. Only eight of the league's 30 teams posted increases in attendance in 2009: the Red Sox, Marlins, Royals, Dodgers, Twins, Phillies, Rays, and Rangers.
In order to deal with the recession, many MLB teams revised their promotional strategies in an attempt to maximize revenues in the tough economic climate. Some teams cut back on the amount of promotional giveaways (i.e., bobblehead dolls, towels, hats, magnets, etc.), while other teams attempted to use the opposite strategy by increasing the amount of giveaways. Still others cut back on the number of promotional giveaways but increased the quality of the products that were given away. In addition to increasing ticket sales, giveaways are used to enhance the ballpark experience for fans in cities such as Chicago, where the Cubs sell out almost every game regardless of whether a giveaway is offered.
Another strategy for coping with the tough economic conditions has been to sell tickets for the following season earlier than normal. In 2009, teams began selling tickets for the 2010 season as early as August. Sales focused on renewing current season ticket holders, as well as allowing those customers purchasing season tickets or ticket packages to pay in increments over time. For example, the Royals allowed payment options with eight installments, and the Diamondbacks offered not just a 10-payment, no interest plan, but also linked its sales efforts with daily giveaways for high-end prizes and one-of-a-kind fan experiences.
While all MLB clubs may choose their own marketing strategies, the league engages in its own marketing efforts as well. Past marketing campaigns have included taglines such as “I Live for This” and “What a Game.” In 2009, the league launched a new campaign for the first time in six seasons, titled “This Is Beyond Baseball.” The campaign featured messages celebrating the common thread of baseball in the lives of fans of different cultural backgrounds, shifting the league's focus to the fans and community instead of strictly on-field aspects of the game. The campaign kicked off with a 30-minute, documentary-style television special on the MLB Network featuring current and former MLB players. The marketing campaign used themes of family, ballparks, community, and culture to deliver its messages via online content and television commercials. This campaign reached out to all demographic segments of MLB's fans, including an increasing Hispanic fan base. According to a report on Hispanic sport fans published in 2007, 59 percent of Hispanic sport fans identified themselves as MLB fans.
Major League Baseball has enjoyed several long-term relationships with its sponsors, such as Anheuser-Busch, a league sponsor since 1980, and PepsiCo., a sponsor since 1989. The league offers official sponsorships in three arenas—official sponsors of http://MLB.com, official online team sponsors, and official sponsors of MLB. The latter category has 18 official sponsors, including Anheuser-Busch, Bank of America, Bayer, FIA Card Service NA, Frito Lay, Gatorade, Gillette, General Motors, Inter-Continental Hotels Group, KPMG, MasterCard International, Nike, Pepsi-Cola, Quaker Oats, Sharp, State Farm, Taco Bell, and XM Satellite Radio.
Sponsors continually work with the league to develop innovative and creative programs to leverage the sponsorship. An example of a successful program in 2009 was PepsiCo's launch of a new logo for its soft drink Pepsi, featuring legendary baseball player Babe Ruth and Sports Illustrated's 2009 Sportsman of the Year Derek Jeter of the Yankees in an ad campaign. Pepsi aired three spots during the broadcast of the All-Star Game, where the brand had on-site presence, and had Pepsi-themed giveaways at 56 regular-season games for the eight MLB teams it sponsors. As a result, the number of fans who correctly identified Pepsi as the official soft drink sponsor of MLB in a survey increased by 10.3 percentage points from 2008 to 2009.
MLB sponsors also have a history of developing collaborative marketing programs. For example in 2009, MLB sponsors MasterCard and Bank of America teamed up to offer MasterCard affinity cards to all of the teams in the league. MasterCard experienced an increase of 5.5 percentage points in the survey asking fans to identify the official credit card of MLB.
In 2009, Major League Baseball took yet another step in promoting its sport and bringing baseball to households around the world with the launch of its own cable television station, the MLB Network. Available in over 50 million homes, the network had the largest channel debut in cable television history. The channel features live game broadcasts, original MLB programming, classic MLB games, and coverage of other baseball events.
In addition to its own cable system, MLB has several lucrative media contracts to broadcast its games worldwide. On network television, MLB has a $1.8 billion, seven-year deal through 2012 with Fox, while on cable television the league has two deals: an eight-year contract with ESPN for $2.37 billion through 2013, and a seven-year deal through 2013 with TBS worth $700 million. In terms of radio, MLB has a $55 million, five-year contract with ESPN Radio through 2010, and an 11-year deal through 2015 with Sirius/XM satellite radio for $650 million.
In terms of Web media, MLB owns a subsidiary company, MLB Advanced Media (MLBAM), which runs the league's Website, as well as the Websites for the 30 teams. Both the league and team sites follow a common format, making it easy for fans to navigate any of the 31 sites they visit. Each Website offers features such as the latest team news, video clips, player biographies, the option to purchase tickets or merchandise, and fan forums.
Major League Baseball is very active in the communities in which teams are located, as well as communities that are not located near a ballpark. MLB has a historic relationship with the Boys and Girls Clubs of America, the official MLB charity since 1997. The partnership has created over 100 Reviving Baseball in Inner Cities (RBI) leagues and over 200 Rookie Leagues, which are instructional programs using a pitching machine.
MLB has several other community initiatives designed to achieve a wide range of objectives, from providing baseball equipment to youth leagues throughout the world to raising money for cancer research. MLB's annual charitable outreach exceeds $100 million regularly through its MLB Charities program, a foundation aimed at providing support to tax-exempt organizations of all sizes.
Drug Testing, Expansion, Leagues, Major, Sponsorship, TV Rights/Contracts
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