November 30, 2022

Big Ass Money

MLB sold the last 15% of BAMTech (which grew from MLB Advanced Media) to Disney for $900 million.

The easy short-term takeaway here is that each team just gained $30 million. Obviously, we shouldn’t be shallow enough to believe teams are going to or should be required to turn around and increase their player payrolls by $30 million apiece. There are many costs to running a team other than payroll, of course. 

CBSSports.com

There might even be a hefty tax bill on the capital gain. One way to look at it, however, is that every team can afford a star free agent for a year!

I love the story of MLBAM, as it runs against the history of baseball broadcasts. Baseball failed to embrace both radio and television as ways to bring the games to people, thinking it would hurt ticket sales. If fact, delivering live action to people created more fans that eventually brought more people to the park.

MLB did not make the same mistake with the internet. The league wanted to deliver content over IP, but in order to do so they needed to improve streaming algorithms. That proved to be much more valuable, as most streaming services today are based on BAMTech software. It also provided the owners with an income stream independent of the game.

It’s one reason the owners had leverage over the players in the previous decade of labor negotiations. They could walk away from the game and still have a very nice income. That’s not quite true any more. We’ll see how much of this windfall gets invest back into the game and the players. It might be a very good year for teams competing for free agents.

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