Friday, November 28, 2008

Professor Panel Series - Professor Reibstein - Nov. 18th

As part of the Professor Panel Series, Professor David Reibstein hosted a session entitled “Exploring Ways to Increase Interest in Major League Baseball”. He discussed his time working on a panel with MLB commissioner Bud Selig and fielded questions and comments from the audience on the state of the game.

Professor Reibstein recalled a day several years ago when he fielded a call from a man claiming to be “Bud Selig”. Convinced that it was one of his friends masquerading as the Commissioner of Baseball, it took Professor Reibstein several minutes to finally realize that he was, in fact, talking to the top man in Major League Baseball. Selig asked to join a panel comprised of those with a vested interested in baseball’s welfare. The panel included executive from ESPN, Pepsi, and TBS, pitchers Tom Glavine and Al Leiter, two team owners, MLB union (“MLBPA”) chief Donald Fehr, Bud Selig and Washington Post writer George Will. Bud Selig brought them together at least once a month to consider all aspects of the game that could be addressed to make the game more marketable to a dwindling and aging fan base. Professor Reibstein proceeded to discuss a litany of ideas, some of which were eventually implemented.

Shortened season. The panel considered shortening the season, which currently runs 162 games. One proposal would shorten the regular season to 154 games, and introduce another round of the playoffs and a 2nd Wild Card team for each league, thereby expanding the playoff field from 8 teams to 10. Professor Reibstein ran scenario analyses in order to determine how much longer each team would be “in contention” due to the addition of a 2nd Wild Card slot in each league. Revenues would benefit from the addition of an extra round of playoff revenues. Regular season revenues would also improve as teams remain in contention for a greater percentage of the regular season. However, there are drawbacks to shortening a season given the game’s statistical legacy. Hallowed milestones like 300 strikeouts, 200 hits and 20 wins – all of which are anchored around a 162 game season – would become more scarce. Furthermore, a contemporary performance over 154 games would become more difficult to compare against great historical season in the 162 game era. While the jury is still out, it sounds as though this is a proposal still being considered by Major League Baseball.

Player privacy. Another proposal involved making players more accessible, either by “miking” a player on the field or through more extensive interviews during and after the game. Who wouldn’t want to know what a team’s star pitcher though about being pulled in the middle of the 6th inning with the bases loaded and two outs? Unfortunately, this seems to be at best a remote possibility as the MLBPA is very protective of player privacy. Donald Fehr, who heads the powerful players’ union, was opposed to miking more than one player per game, and both he and player representatives Glavine and Leiter had sincere misgivings about in-game interviews.

Competitive imbalance. No discussion of America’s Pastime would be complete without addressing the league’s perceived competitive imbalance. No doubt the shoestring budget AL Champion Tampa Bay Rays would beg to differ, but most fans believe that MLB competitive balance is hopelessly skewed towards the big market, big money teams in major cities like New York and Boston. Professor Reibstein went into the panel with this as his number one issue, but learned that this is a conversation that has been rehashed “a million times” with very little to show for it. The case against revenue redistribution is that TV ratings are highest when two big-market teams square off in the playoffs. However, there are several reasons to consider revenue redistribution – one need only look at the NFL to recognize the value of the resultant competitive balance. First, it would introduce an element of fairness that appeals to every true sports fan. Second, it could result in a positive revenue impact to help offset (and potentially outweigh, as evidenced by the NFL’s success) the “big city” benefits under the current system. Many NFL fans will watch games that don’t even involve their home team because they are fans of the competitive product the NFL puts on the field. At the start of any given season, virtually every team thinks they have a chance to win a title and that boosts interest in the league as a whole. So while it’s true that the NFL would rather have two big market teams square off in the Super Bowl, they seem content to risk having two small market teams play because of the attendant benefits of competitive balance. While many in baseball recognize the potential benefits of revenue redistribution, the gating factor has been existing big-market owners. Owners of big market teams feel justifiably threatened, since they paid far more for their asset than they would have for, say, the Florida Marlins. Revenue sharing would reduce big market team valuations and be a boon for small market team owners. With these very real financial considerations in mind, it will take creative solutions to pave the path to more comprehensive revenue sharing in Major League Baseball.

Earlier start times. Baseball’s fan base between the ages of 12 and 30 is dwindling, and one of several culprits often cited is late start times. October baseball, laden with the sort of every-play-matters drama that can hook a new fan for the sport, often drags into the early hours of the morning on the East Coast. Most of the World Series games had scheduled first pitches after 8:30 PM EST, meaning that even an average game wouldn’t end until after 11:00PM EST. Young fans especially have a difficult time staying awake to catch the end of playoff games. However, TV executives argue that if MLB were to move the games earlier, MLB would lose “a billion dollars” in TV revenues. They pointedly ask if baseball is willing to make that kind of an investment in hopes of recapturing younger fans, and the question remains one open to debate.

Shortening games. Back in the era of Sandy Koufax, baseball games took on average 2 hours. By the time the panel met to discuss, that average had crept to over 3 hours. Part of this was driven by increased offensive production, which is generally seen as beneficial for attendance. However, another culprit was the increasing number of pitching changes in an era where terms like “pitch count” and “lefty specialist” were now part of baseball lexicon. Longer games during an age of compressing attention spans were viewed as a significant problem. A number of ideas were set forth to address the problem: managers could just announce an intentional walk rather than throwing four ceremonial pitches outside of the strike zone; MLB could limit the number of pitching changes per game; MLB could reduce the number of warm up pitches allowed each inning and for each relief pitcher; MLB could limit the number of times a pitcher throws over to 1st base to check a runner. Rather than tinker with the rules of the game, however, the committee decided to encourage the umpires responsible for managing game times to speed the game along. Professor Reibstein drew an analogy to the airline industry. Once airlines started publically reporting on time arrival rates among airlines, every airline realized this was a metric upon which they were judged and almost instantaneously improved. The committee took a similar approach by internally circulating the average game length for each umpire, and then proceeded to encourage those presiding over longer games to pick up the pace of their games. This simple measure, which didn’t entail any fundamental changes to the game, reduced average MLB-wide game times by 14 minutes.

Interactive in-game entertainment. Professor Reibstein suggested that if MLB can’t easily pull levers to shorten the game itself, they could at least shorten the perceived length of games with in game entertainment. For example, MLB could wire stadiums for hand held devices on which fans could “bet” on the outcome. Between pitches, fans could guess the outcome of the ensuing play. The stadium would post the highest scores after each inning and offer prizes for the best totals at the end of each inning or game. For a generation of children growing up playing video games, it is a way to make baseball more interactive. Fans of any age would be more engaged during “down time” between pitches rather than counting the minutes towards three hours in a ballpark.

Worldwide Rule 4 Draft. Professor Reibstein said in response to an audience question that the concept of a worldwide Rule 4 Draft was “never discussed”. Professor Scott Rosner, who is currently writing on the topic, was also in attendance and lent his expertise on the matter. The MLB and MLBPA reached an agreement in principal during the 2002 Collective Bargaining Agreement (“CBA”), but could never reduce it to writing. There are several implications of a Worldwide Draft to consider. Teams (particularly the smaller ones) that have invested in “baseball academies” would lose the benefit of their investment, because players who could have been developed and then signed through the academy would now be scouted and signed through a league-wide draft system. Second, baseball participation in the countries to be added to the draft could actually be adversely impacted. Puerto Rico was added to the Rule 4 Draft in 1989, and this winter the Puerto Rican Winter League was folded after 69 seasons because of financial problems. Professor Rosner postulated that the MLB Draft offered fewer opportunities for the large signing bonuses that used to offer young Puerto Rican players a shot a financial freedom. Finally, the MLB would like to incorporate the Japanese Major Leagues into a Worldwide Draft but is confounded by a player posting system. By the time the next CBA came up for negotiation in 2006, there were so many other issues swirling that the concept of a Worldwide Rule 4 Draft was pushed to the background.

Baseball’s global footprint. MLB is very focused on trying to grow the game globally. Baseball was dropped as Olympic sport for the London 2012 Summer Olympics. MLB is very concerned about the international implications of losing baseball in the Olympics, and are working to get back into the games in 2016. Baseball’s status as an Olympic sport and the attendant funding is important for the development of baseball in small countries.

Thanks again to Professor Reibstein for an enjoyable and informative hour.


Article Contributor: Robert Sebastian

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