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Nothing succeeds like success

On October 3 we began an inquiry into MLB’s finances, team valuations, etc. Today we’re going to continue our indagation. (FYI “indagation” means an inquiry of an intellectual nature into first causes or bases of a subject).

Now that the Post-season is here, what’s that mean for the teams that qualified? For one thing, it means money, and if they go far, it means big money. The players also prosper from playing in the post-season.

Prior to 1969, the World Series WAS the post-season in its entirety; by mid-October the off-season was well and truly begun, and football, hockey and basketball became the fan’s pursuits. Teams were referred to as being “First Division” or “Second Division” clubs; the First Division, teams 1-4 prior to 1961-62 and 1-5 up to 1969, shard in post-season revenues in percentages indicated by their finish, as did their players. Players only shared in income from the first four games of the World Series, of course, harkening back to the infamous “Black Sox” scandal of 1919; no one wanted players throwing games just to extend the World Series.

Today, with 30 teams, post-season loot is still divvied up to a very limited number of participants, to wit: the three division winners in each league, the wild card winners, plus the other two second-place finishers. In the middle of the last century, a post-season share could be a significant percentage of a player’s salary. In general, ballplayers in that era were middle-class in income. If you were a bench player or relief pitcher making, say $10,000 for the season, a $1,500 check for a third-place finish would be a nice bonus. For today’s players, a World Series winners’ check can still be substantial, but for the stars and superstars, it’s tip money: even $350,000 when you’re making $15,000,000 is nice but the ring and fame are worth far more.

Today MLB Properties with its team web-sites, sales of apparel and goods, MLB Network etc. provide a steady stream of income to all teams, not just the successful ones. There is no doubt, however, that frequent post-season appearances provide meaningful revenue as well as helping with future ticket sales and overall marketing of teams’ “brands” (some but not all MLB teams have what marketers consider brands; same in the NFL, NBA, NHL, NCAA, etc: to have a brand means you make more than just the sum of your in-season income).

The players get 60% of ticket income for the first three games of the LDS and the first four games of the LCS and World Series; ticket prices are set by MLB, not the teams. Obviously when the World Series is played in a high-capacity venue (e.g., Yankee Stadium) shares will be worth more than if played in lower-capacity venues.

The World Series winner gets 36% of the post-season loot, the Pennant Winner gets 24%, the LCS teams get 12%, the LDS teams 3% and the non-qualifying second-place finishers get 1%. Participating teams, of course, get all of the ancillary income from food, parking, programs, etc. depending on their arrangements with their localities, and localities benefit from increased hotel occupancies, sales (and perhaps wage) tax collections, etc.

http://en.wikipedia.org/wiki/Major_League_Baseball_postseason
http://www.bizofbaseball.com/index.php?option=com_content&view=article&id=2662:2008-mlb-postseason-shares-announced&catid=30:mlb-news&Itemid=42



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