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It doesn’t seem all that long ago that the World Series was canceled as a result of the MLB Players Association being on strike. In reality, its been fifteen years since that terrible, terrible day. What is the state of professional baseball in America today? What does the future hold?

MLB’s Annual Revenue

The business of baseball has rebounded from the strike. The home run chase between Mark McGwire and Sammy Sosa was the syringe of financial Winstrol that the game needed.

MLB had record revenue of $6.5 billion in 2008. The league has a CBA with its Player’s Association which runs through the 2011 season. There is little talk of a strike or lockout on the horizon.

Last year’s baseball season was mostly over before the financial crisis hit however. This year, the league is predicting a six-percent attendance drop.

Unlike the NFL, attendance matters for MLB franchises. Paid tickets are MLB’s largest single revenue source.

Tickets are so important because they generate more than half a team’s revenue, with about 25 percent coming from direct ticket sales and a similar amount from concessions, souvenirs, parking and other related areas, team officials said. (More…)

Baseball remains an especially local form of entertainment. Baseball teams are heavily dependant upon revenue earned at the ballparks and from local broadcasts. The NFL generates more than two-thirds of its revenue from its national television contracts. Baseball’s national broadcasts generated only $935 million in 2006, about 15 percent of overall sales.

In 2006, 19 [MLB] teams sold their local broadcast rights for an average of $13.5 million each, Forbes reports. But teams with stakes in their own cable networks did much better:
• $67 million to the Yankees from their YES network
• $47 million to the Mets from their SportsNet New York Channel
• $21 million to the Red Sox from the New England Sports Network (More…)

MLB’s internet ventures generated revenues of $380 million in 2007. Baseball has worked hard to monetize its intellectual property over the internet. Maybe as importantly, they’ve socialized the economics of the league by sharing internet revenues the way the NFL shares its national TV deals.

Baseball’s Demographic Problems

The short-term future of baseball appears to be the strongest of the Big Four leagues. A somewhat surprising situation given everything that has surrounded the sport over the last two decades.

The long-term future of baseball is more interesting however. While baseball has long been the national past time, under the surface lurk demographic stats which cast shadows over the size of the game’s future place in the sporting landscape.

Baseball is the General Motors of professional sports. Baseball dominated the sporting landscape for decades, garnering a market-share which far exceeded that of its competitors. In more recent times however, competition and changing tastes have resulted in significantly reduced market share. Like cars, people tend to stick with the sports they know.

Unfortunately for MLB, its core fan base is getting older and the league is finding it difficult to connect with younger viewers.

Americans don’t play or follow baseball the way they used to. For decades now, soccer fans have pointed to youth soccer participation as evidence that soccer was the wave of the future. Obviously, it hasn’t quite worked out that way.

But has baseball participation rates by America’s youth had a negative impact on the game? Maybe. The game is certainly employing more players from overseas. The question is, are these players from overseas flooding the majors because they’re so good or because of a talent drain created by American’s choosing other sports? If game continues to become more “international,” will Americans continue to fill ball park seats summer after summer?

You Can’t Walk Your Way Off the Island

In 2008, of the 855 players on MLB rosters at the start of the season, 239 (or 28 percent) were born outside the 50 states. Eighty eight of those players were from the Dominican Republic and 52 were Venezuelan. Players from Puerto Rico (29), Japan (16), Canada (14), Mexico (11) round out the top 6.

More incredibly, 3,356 of the 7,021 minor leaguers, or 47.8 percent, were born outside the 50 states.

Its tempting for baseball fans to think that Dominicans are making major league rosters because they’re just that good. But is that true?

There are 10.1 million people in the Dominican Republic, slightly less than the population of Michigan. A country that is 3% the size of the United States supplies 10% of all major leaguers and about 1,500 of the 6,900 (22%) minor leaguers.

Maybe as important, those players trying the hardest to “make it off the island” are those most likely to be using PEDs. Or, at least, to be caught using PEDs.

In 2005, under baseball’s minor league testing program, 97 of 894 (11 percent) players tested at the league’s Dominican-based farm clubs tested positive for steroids or related substances. (More)

The D.R.’s minor league numbers are certainly skewed due to the fact that nearly every MLB team has a farm club on the island. It would be interesting to see what the numbers look like at only the AA or AAA level.

But the facts remain. Dominican’s are overly represented relative to population and the reasons for it aren’t quite clear. Possibly its simply the fact that its a good career choice for a teenage boy in the D.R. and it causes them to work harder at the skill than American teenagers do. Possibly, it has to do with PEDs.

But are they also benefitting from declining competition from American youths?

Overall Sports Participation in the United States

Fewer people are playing baseball in the United States. Look at how the number of people over age 6 who have participated in selected sports at least once in the last 12 months has changed over the last twenty years (in millions):

Team	1987	2001	% Change
Softball (Fast)	n.a.	4.1	n.a.
Soccer	15.4	19.0	24%
Football (Touch)	20.3	16.7	-18%
Softball (Total)	31.0	20.1	-35%
Baseball	15.1	11.4	-25%
Basketball	35.7	38.7	8%
Volleyball	36.0	24.1	-33%

Combined, the number of people who have played either baseball or softball at least once over the last year has declined by 32%.

I’m combining the baseball and softball participants because, in my mind, softball is the “adult” form of baseball. At some point in their life, people will find the hardball too dangerous and will gravitate towards the safer, slower pace of softball.

Less people playing baseball as a youth, means less people playing softball as an adult. Baseball is a game of skill and people don’t like to play team sports they aren’t good at. Unlike tennis or golf (or maybe even basketball) if you didn’t play baseball when you were young, you’re unlikely to pick it up as an adult.

Of course, just because baseball participation rates are declining among the fringe players, doesn’t mean that the hard-core baseball players aren’t still playing. How has youth participation held up? Are America’s youth’s playing less baseball?

Increased High School Baseball Participation

The casual sports participation numbers don’t jive with what the high school sports associations are saying however. Since 1970, thirty-three percent more high school students are reported to be playing high school baseball even though the total high school aged population has stayed relatively steady, at about 14.5 million.

Year	# Schools	# Baseball Participants	Players per School
1971	13,002	360,157	27.7
1980	14,027	422,310	30.1
1990	13,608	419,015	30.8
2000	14,791	450,513	30.4
2008	15,720	478,000	30.4

Baseball’s growth rate is not nearly as great as that experienced by high school soccer, which has grown nearly 400%.

Year	# Schools	# Soccer Participants	Players per School
1971-72	2,290	78,510	34.3
1980-81	4,555	149,376	32.8
1990-91	6,785	228,380	33.7
2000-01	9,846	332,850	33.8
2008	11,122	383,600	34.5

But baseball participation has held up far better than basketball which has seen a 16% drop in participation rates.

Year	# Schools	# Basketball Participants	Players per School
1971-72	19,647	645,670	32.9
1980-81	18,041	553,702	30.69
1990-91	16,462	515,644	31.3
2000-01	17,135	539,849	31.5

(Source)

One possibility of course is that these numbers for high school don’t accurately reflect the participation rates for all high school aged children. Today, the AAU circuit in basketball and the club soccer are often viewed as superior competitive programs to their high school counter-parts.

Conversely, I wonder if throughout much of the last century the club form of baseball (Legion Ball?) for high school aged players wasn’t the dominate form of teenage baseball. Why else would so many schools be adding baseball teams? Shouldn’t these schools already have teams?

I suspect that the growth of high school baseball has come at the expense of other baseball leagues designed for high school aged players. Unfortunately, I couldn’t find any historical numbers for Legion Ball participation.

I could find Little League participation numbers however. Little League has experienced 13 percent decline in the number of children playing baseball since 1997. Worldwide Little League participation declined from about 2.6 million to about 2.2 million in 2008. All of that decline has occurred within the United States.

Baseball is a Game of Skill

Given the contradicting numbers, for arguments sake, let’s just say that youth baseball participation is flat, even though it probably isn’t. That approximately the same percentage of youths are playing some baseball.

Other changes in the youth sporting landscape are likely having a negative impact on the quality of the game however.

Many years ago I saw an interview with Deion Sanders in which he discussed the differences between football and baseball. His thesis, in essence, was that while football was a game of “talent” baseball was a game of “skill.” Baseball required day in and day out honing of one’s craft in order to compete at the highest stage. Deion’s natural talents essentially allowed him to walk onto the football field and play cornerback. He had to work at acquiring the skills necessary to play baseball however.

If true, I see this as a possibly significant contributor to the relative decline of baseball at all levels. Unlike football, or to a lesser extent basketball, baseball is not a game that you can just walk into and be good at. Its not a game that you can give up at an early age and then expect to pick up again later and still play at a high level.

It requires patience and practice. As youth sports become more of a year-round endeavor all sports are creaping into each other’s turf and forcing teenagers to concentrate on fewer sports.

The specific skills which baseball requires, fielding, hitting a curve ball, etc., don’t lend itself to allowing baseball to be an off-season sport which can be excelled at. As a result, some players stop playing after Little League. A few more stop a year or two later. Once they stop, they’re done.

It is this reason more than any other I think, that baseball participation by African-Americans has declined over the past decades. African-Americans are strangely absent from MLB. In 1975, 27 percent of MLB players were African-American. In 1995, 19 percent were. On Opening Day 2007, African-Americans comprised only 8.2 percent of big leaguers.

Baseball’s Competitive Imbalance

In no sport more than baseball is the past compared to the present. The nature of the game and its easy statistical categorization provide ample means to compare the players of the past to those playing the game today. The importance of these statistical comparisons is apparent from the angst sown by the steroid era.

We want to believe that Barry Bonds was so good because, well, he was that talented. That his complete domination of the game for three years was natural. Ultimately of course we must conclude that PEDs played a role. But what if there was more to it than simply drugs?

What if it wasn’t just an unusual combination of talent and PEDs? What if Bond’s dominance was partially the result of decline in the quality of competition arising out of baseball’s demographic decline?

Some great athletes continue to play baseball. But many more have chosen other sports. Many good athletes continue to play baseball. But many more have chosen other sports.

A decline in the overall relative quality of player does not mean that the best players will become worse. It means that the best players will have an easier time against the rest of the league.

Isn’t it conceivable that a combination of league expansion and talent pool dilution resulted in more players employed in Major League Baseball who would not have made The Show in a previous era? Wouldn’t this result in the best players being even more dominant? Ancedotally, it certainly seems possible.

Ten of the top 35 pitchers of all time, using Adjusted ERA Plus, are active or recently retired. That means that even as the overall league ERA’s bloomed from 3.58 in 1981 to 4.77 in 2000, the ERA’s of the best pitchers didn’t follow.

Baseball’s Attendance Problems

Dwindling participation hurts more than just on the field. The Baby Boomers who grew up with baseball and worship baseball have more disposable income now than they ever had. They are shelling out for season tickets. They are taking road trips to see their team. They are supporting the game financially.

But what happens when the Baby Boomers stop going? Will the next generation of Americans, who already have a more tenuous connection to the game than their predecessors, continue to embrace a league that is comprised primarily foreigners who aren’t as good at the game as American’s used to be?

Of course we will. Just not to the extent that our parents and grandparents did.

Among my generation, the love of baseball just isn’t there. Even here in Chicago, the love of the Cubs among the twenty-something population can probably be attributed in large part to social culture and drinking. Wrigley is a beer garden that happens to surround a baseball field.

Baseball is not the national past time to the younger generation. There are simply too many diversions and teams for any one sport to dominate the landscape. Football, baseball, hockey, basketball, soccer. Not to mention competition from increasingly pervasive college sporting events.

And that’s just the white suburban population. The demographic makeup of the United States will continue to change over the next couple of decades, with increasing numbers of soccer following Hispanics. And what about those cricket mad Pakistani’s?

Baseball is not going to go by the wayside. Population growth in the United States will make it ever easier for teams to fill their 40,000 seat stadiums. Its simply a matter of math. Perhaps more people will each go to fewer games. More “unique” visitors per season if you will.

It simply seems as if outside of Boston, New York, L.A., Chicago, and St. Louis, baseball’s economic health is likely to lie in the performance of the team on the field and not the consistent fan support which it enjoys among the older set today.

Baseball seems destined to continue its slow slide towards the back of the sporting landscape.

Related Reading:

NHL Faces Tough But Manageable Economic Situation

Will There Be An NFL Lockout in 2011?

Will There Be An NBA Lockout in 2011?

MLS: The Future is Bright

Are MLS Teams Profitable?

Where Do MLS Teams Get Their Revenue From?

How Much Money Does MLS Make From Its Television Deals?

MLS: A Quality Product on a Shoestring Budget?

Explaining European Football to the American Sports Fan

Will European Futbol Clubs Create a Super League?

Major League Baseball’s Demographic Demise