Everything You Need To Know About The 2023 MLB Season
Huddle Up is a 3x weekly newsletter that breaks down the business and money behind sports. If you are not already a subscriber, sign up and join 97,000+ others who receive it directly in their inbox each week. Today At A Glance:Major League Baseball has seen a significant decline in interest over the last two decades and is now trying to draw fans back in by implementing the most extensive rules changes we’ve ever seen. Today’s newsletter breaks down everything you need to know, including how these changes impact the money and business behind the sport. You also can listen to this newsletter via Apple Podcasts or Spotify. Enjoy! Today’s Newsletter Is Brought To You By Goldin!
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This is obviously a problem — an entire generation of sports fans suddenly didn’t care about a sport that has been synonymous with America for the past 100+ years. But rather than sit back and watch the destruction continue, MLB executives have implemented a variety of changes this year in an attempt to stop the bleeding and jumpstart growth. This includes everything from how the game is played to the way fans consume it. So here’s everything you need to know about the 2023 MLB season. MLB: An Overview Of The $11 Billion Business
Despite the decline in interest over the last two decades, Major League Baseball is still one of the world’s largest and most profitable sports leagues. For example, MLB brought in a record $10.8 billion in revenue last year. That is second to the NFL ($18 billion) but ahead of the NBA ($10 billion). MLB Revenue By Year
This revenue was primarily driven by new national media deals with FOX, TBS, ESPN, Apple, and Peacock that kicked in at the start of the 2022 season.
MLB also saw a 5.6% increase in gross sponsorship revenues last year. This resulted in nearly $1.2 billion in sponsorship revenue, with the most popular categories being beer, insurance, tech, automotive, telecom, apparel, and gambling. But that’s the good news. The bad news is that MLB attendance has declined by an average of 2% yearly since 2007. And since gate receipts typically make up nearly 30% of all MLB revenue, declining attendance could spell trouble for MLB owners. This is where the rule changes come into play. Major League Baseball Is Going To Be Much Faster
The biggest problem with Major League Baseball over the last two decades is that the game has moved in the opposite direction of societal trends. Attention spans are getting shorter. It’s why TikTok has more than 1 billion users worldwide, and short-form highlight-style sports accounts like House of Highlights and Overtime have built an audience of more than 100 million people. Yet baseball has ignored this shift. The average nine-inning MLB game last year lasted more than 3 hours. MLB games haven’t been under 2 hours and 30 minutes since 1985, and most of this time is wasted (batters walking around, pitchers taking time before a pitch, etc.). Average Length of 9-Inning MLB Game
And the pace of play isn’t the only problem. Like the 3-point revolution in basketball, MLB teams and players have spent the last few years optimizing bat speed, exit velocity, and launch angle to hit more home runs. This has resulted in more home runs — a record 6,776 home runs were hit in 2019 — but it has also reduced overall action and made the games more boring. So MLB has spent the last few years testing a variety of rules across the minor leagues, and they have decided to implement several of them this year. The most significant rule change is the introduction of a pitch clock. Pitchers now have 15 seconds to start pitching the ball when the bases are empty and 20 seconds to begin pitching the ball when runners are on. Hitters have to be looking at the pitcher and in the batter’s box with 8 seconds remaining on the clock, the pitcher can only step off the rubber twice per batter, and the hitter now only gets one timeout per plate appearance. Think of it like a shot clock in basketball — but instead of turning the ball over to the other team, the pitcher is awarded a strike when the batter takes too long, and the batter is awarded a ball when the pitcher takes too long. And this is going to drastically change the game. Sure, there were still a few 3-hour games on Opening Day, but some games also finished within 2 hours and 30 minutes. 
The Yankees-Giants game just wrapped up in 2 hours and 33 minutes. There was just one pitch clock violation, and that would be the fastest average MLB game in 43 years. This is going to make baseball so much better.
Now, some baseball purists don’t like this rule. They say baseball isn’t meant to be rushed, and shorter games could potentially lead to lower revenue and player salaries, as fans have less time to buy concessions and merchandise. But this is about bringing *new* fans into the sport. MLB isn’t trying to make games as fast as possible — they want to eliminate the downtime. And there have also been several studies showing that fans enjoy it, too, with the average fan now staying later in the game and spending an equivalent amount of time & money at the ballpark.
And the pitch clock isn’t the only rule change. MLB has also increased the size of the bases from 15 inches to 18 inches, reducing the distance between bases by 4.5 inches and encouraging more stealing (the SB success rate jumped 10% in Triple-A last year). The defensive shift has also been banned, and pitchers are now only allowed three pickoff attempts when a runner is on base. And when you combine all these rule changes, baseball is undergoing its most significant change in a generation. The Continued Demise of Regional Sports Networks (RSNs)
So you’ve probably heard that regional sports networks (RSNs) are crumbling. The simplest way to explain it is that these cable channels pay a lot of money to broadcast local sporting events, and cord-cutting has made the business unprofitable. One company (Diamond Sports Group) has already filed for bankruptcy, and another (Warner Bros. Discovery) says it will leave the RSN business entirely. This impacts teams across the NBA, MLB, and NHL — NFL isn’t affected because their TV rights are national — and it specifically has an outsized impact on MLB. Take a look at this chart from Sportico. Local media rights represent MLB’s third-largest revenue stream, behind tickets (31%) and national revenue (26%) but ahead of sponsorships (11%) and concessions (10%). And more than 20% of MLB’s $10.8 billion in annual revenue currently comes from local media rights — compared to 13% for the NBA and 12% for the NHL.
This RSN issue is the single biggest threat to the profitability of MLB and its teams over the next few years. The ratings are still good — baseball RSNs were the No. 1 program in primetime on cable in 22 of 29 markets last year — but cord-cutting has threatened the business model and jeopardized millions of dollars in rights fees. Now, MLB isn’t just sitting back and watching this implode. They have created a new local media department with three RSN veterans in the event they need to take control of any team’s media rights — but that would be much less profitable for teams. MLB Valuations Keep Getting Higher
Perhaps the most interesting part of MLB’s business over the last few years is that team valuations have continued to rise in the face of increasing business challenges. But it looks like that tide is finally turning because of the RSN issues. The average MLB team is now worth $2.36 billion, and all 30 teams are collectively worth more than $70 billion, according to Sportico. However, that’s only a 2% increase over the last year, compared to an 18% increase for the NFL and a 16% increase for the NBA, and ten MLB teams saw their overall valuation drop year over year. Those ten teams held an equity stake in the Diamond Sports Group regional sports network, which Sportico reduced to zero because of their uncertain future. 2023 Most Valuable MLB Teams (with value increase from 2022)
The strongest brands in baseball are still performing quite well, though. For example, the New York Yankees, Los Angeles Dodgers, and Boston Red Sox are still three of the top ten most valuable sports franchises in the United States.
And MLB owners aren’t the only ones making more money — the players are too. Shohei Ohtani Sets An MLB Annual Earnings Record
The top 10 highest-paid MLB players will make nearly half a billion dollars combined this year. That includes more than $400 million in salary alone, and the list consists of multiple players from the Angels, Mets, and Yankees.
Of course, the elephant in the room here is that MLB players make significantly less in endorsements than their sports counterparts. Take basketball, for instance. The top 15 highest-paid NBA players earn 35% of their total income from endorsements, compared to just 17% for the top 15 highest-paid MLB players.
Most of this disparity is driven by MLB’s inability to market its product and superstars appropriately — but that doesn’t seem to matter for Shohei Ohtani. The Japanese-born player is a two-way star. He won an MVP award in 2021 and was named an All-Star as both a pitcher and hitter. And this high level of success has made him the most financially successful MLB player in history, off the field, at least. Ohtani will earn $70 million this year, including $30 million via salary and $40 million through endorsements. That’s $35 million more in endorsement income than any other MLB player, and Ohtani’s $70 million in earnings is an MLB record.
And Ohtani might just be getting started. He recently became the first MLB player to cross 5 million Instagram followers, and most of America still doesn’t know who he is. “[Ohtani has a] 17% awareness level in this country, according to Q Scores,” says Kurt Badenhausen of Sportico. “That severely lags the biggest athlete celebrities like Tiger Woods (81%), Tom Brady (77%), and LeBron James (75%), and is only half the level of recently retired NFL All-Pro J.J. Watt.” So while many people have already crowned Shohei Ohtani as the global face of baseball, he has a $500 million contract coming his way and plenty of room to grow. Minor League Players Make History With Their First CBA
Even with so much going on with MLB this year — rule changes, RSNs falling apart, etc. — the biggest news in baseball might have come from the minor leagues. Major League Baseball recently struck a deal with minor league baseball players to establish the first Collective Bargaining Agreement (CBA) between the two sides. The first minor league-MLB CBA in history includes updated drug and domestic violence policies. It reduced team control years for players 19 years and older who sign with a team from seven to six years, and it provides NIL rights to MiLB players. But most importantly, it significantly increases player compensation and benefits. Minor league players will now be paid year-round — players were previously not paid during the offseason or spring training — and everyone’s salary will more than double. Minor League Annual Salary Increases
In addition to increased pay, the CBA also emphasized housing and transportation. Starting in 2024, Triple-A and Double-A players will receive their own bedrooms, and players with spouses and children will receive special accommodation. This has been a long time coming, and there is still a lot of work left to do. But establishing the first CBA in history is undoubtedly a step in the right direction. So there you have it — that’s everything you need to know about the 2023 Major League Baseball season. If you enjoyed this breakdown, please consider sharing it with your friends. My team and I work very hard to deliver high-quality content consistently, and every new subscriber helps. I hope everyone has a great weekend. We’ll talk on Monday. Interested in advertising with Huddle Up? Email me. Your feedback helps me improve Huddle Up. How did you like today’s post? Loved | Great | Good | Meh | Bad Want More Detailed Sports Business Breakdowns? Subscribe To JPS.The Joe Pomp Show is a 3x weekly podcast where I break down the business and money behind sports. Think of it as the same high-quality work you read here, just deeper. There are exclusive interviews with people like Dana White, Lance Armstrong, and Troy Aikman, and you are guaranteed to learn something new. Extra Credit: The Clubhouse At Fenway Park Gets An UpgradeFenway Park opened its gates in 1912 and is one of only two MLB stadiums still in use more than 100 years later (Wrigley Field is the other). But the clubhouse was due for an update — and the Boston Red Sox certainly delivered for its players.
The Boston Red Sox have a new clubhouse. It includes custom maple lockers, new lighting and sound systems, food and beverage stations, and 16 TV displays that create two 360-degree jumbotrons. That’s pretty damn cool 🔥
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