Sources of Revenue of Major League Baseball Teams

Sources of Revenue of Major League Baseball Teams

Major league baseball teams generate revenues from a variety of sources. Although revenues from television contracts generate the greatest contemporary interest, ticket sales continue to be an important source of revenue in major league baseball. The national television contracts negotiated in 1988 represented a 102 percent increase in national television revenues over the prior contracts (Staudohar 33). Local television contracts provide substantial additional revenues for major league baseball teams located in large markets, while teams in smaller market benefit much less from such revenues (Bernstein 40). Total revenues in major league baseball increased from $718 million in 1985 to approximately $1.4 billion in 1990 (Zimbalist xiii).

Revenue generation in baseball began in the 1860s, when a few teams began to enclose their playing fields and charge a small admission fee, typically a quarter, to watch the games (Goldstein 84). Between that time and the contemporary period, owners of major league baseball teams have not always demands that the teams be profitableat least not directly. AnheuserBusch, as example, used the St. Louis Cardinals as a marketing promotional vehicle for Budweiser beer (Zimbalist 32). AnheuserBusch profits stemmed from the sales of Budweiser, and a contending St. Louis Cardinals baseball team was a part of the promotion effort for the beer. While there may be some philosophical objections to such a use of a commercial sports franchise, there is little evidence to indicate that the quality of baseball in St. Louis suffered because of that use. It was, in fact, in the best interests of AnheuserBusch to maintain a high quality team in the Cardinals.

For the 19901993 period, each major league baseball team received approximately $14 million per year from national television contract revenues from total annual revenues of $365 million (Zimbalist 49). Total local broadcasting revenues were almo…

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