October 2009 Michael Buteau Bloomberg Sports News -- Above Interstate 85 in downtown Atlanta, Derek Jeter peers down from a 3,500 square-foot electronic billboard erected near the headquarters of Turner Broadcasting Systems, signaling the start of Major League Baseball’s postseason. The New York Yankees’ captain first appeared on the billboard Sept. 11, even though Atlanta’s hometown Braves were still in the playoff hunt.
While the Braves failed to make the postseason, Jeter and the Yankees did, a year after not qualifying for the first time in 14 seasons. Their return is good news for television networks and the team’s revenue. Their continuing success also may pay off for baseball in the long term after current sponsorship and television contracts expire.
“They are probably one of the most recognized sports brands in the world,” TBS President David Levy said in a telephone interview in New York, hours before the Yankees opened their series against the Minnesota Twins with 7-2 victory. “The Yankees have a lot of fans in a lot of places.”
While Levy, 47, said the network doesn’t play favorites, there’s no denying the importance of the Yankees, who have won a record 26 championships. First-round playoff ratings fell 24 percent without them in 2008.
2008 Baseball Playoff had Fewer Viewers - Last year was the first since the players strike in 1994 that the Yankees didn’t reach the playoffs. First-round games drew 4.3 million viewers, compared with 5.7 million in 2007, according to Nielsen Media Research.
The Yankees’ opener against the Twins two days ago drew 19 percent higher ratings than the Los Angeles Dodgers-Chicago Cubs game did in the same time slot in 2008.
None of last season’s first-round matchups extended to a decisive fifth game.
“If you get a Game 5 in the first round, I don’t care who it is, people will tune in,” said Levy, who has been in his current job since 2003. “But as the games go on and the storylines develop, the hope is that even casual fans will watch. And it was proven last year.”
Game 7 of last year’s American League Championship Series between the Red Sox and Tampa Bay Rays on Time Warner Inc.’s TBS was watched by almost 13.4 million people in the U.S., the largest cable audience ever for a baseball playoff game, according to Nielsen.
TBS and News Corp.’s Fox share television rights for Major League Baseball games through 2013 in contracts that are worth more than $3 billion. TBS will air all first-round games and the National League Championship Series. Fox will carry the American League Championship Series and the World Series. The Yankees play in the American League.
Later Years - Because advertising prices are set in advance of the playoffs, the likely higher ratings generated by the Yankees won’t have an immediate impact on revenue for the networks. Baseball and the team’s revenue wouldn’t get an immediate effect either, since sponsorship agreements typically are multiyear. Rather, the payoff will come in future years, said Marc Ganis, president of SportsCorp. Ltd., a Chicago-based sports consulting firm who has done work for the Yankees.
“Everything sold in the future is based on prior results,” Ganis said. “So if the Yankees do well now, and the interest in them is up, it might not affect this year’s revenues, but the next year and the year after, when sponsorship opens up and TV contracts come up, it will have an affect on the value of those agreements.”
2009 Baseball Playoffs Ad Rates - Turner is seeking between $70,000 to $80,000 for a 30- second spot in the first round of the playoffs, and between $120,000 and $150,000 for second-round games, Mediaweek reported on its Web site, citing media buyers it didn’t identify.
TBS doesn’t disclose what it charges, network spokesman Jeff Pomeroy said in an e-mail, citing company policy.
The Yankees averaged $1.93 million in additional revenue for each of 42 home playoff games from 1999-2008, according to an estimate from Bizofbaseball.com, the Web site that focuses on baseball business news. In contrast, the Twins averaged $1.53 million for 10 in that time span. MLB itself generated $6.5 billion of revenue during the 2008 regular season, up from $6.1 billion the prior year.
The Yankees’ return to the postseason will have an affect on New York businesses. The city’s Economic Development Corporation released a report this week that said every postseason game at Yankee Stadium generates $6.7 million in direct spending by fans, players and media on hotels, retail transportation and dining. The team could have as many as 11 home games during the postseason.
Dominating Jeter - Of the seven billboards around Atlanta promoting the start of the playoffs, Jeter, the All-Star shortstop who has been with the Yankees since 1995, is on five of them. Around the country, TBS has similar billboards featuring St. Louis Cardinals first baseman Albert Pujols and Los Angeles Dodgers catcher Russell Martin. Jeter is on 60 percent of them.
The Yankees are crucial to getting casual viewers to tune into playoff games in the early rounds, Levy said.
There are few teams in professional sports as synonymous with money as the Yankees. Their $210 million opening-day payroll was the biggest in baseball in 2009, the 11th straight year the team spent the most on players among the sport’s 30 teams. Before this season, their second with Joe Girardi as manager, the Yankees lured free-agent pitchers CC Sabathia and A.J. Burnett with multiyear contracts worth $243.5 million. New York also gave first baseman Mark Teixeira an eight-year, $180 million deal.
Best in Baseball - the changes resulted in a 103-59 record this season, the best in baseball. Teixeira tied for the AL lead with 39 home runs and Sabathia’s 19 wins were tied for the most in baseball. At age 34, Jeter hit .334, his best since 2006, with 18 home runs and 30 stolen bases.
This is the first season for the team’s new $1.5 billion stadium in the Bronx, built across the street from its former home. While TBS airs 26 Sunday games throughout the regular season, the division series and the National League Championship Series as part of its agreement with baseball, Fox mostly relies on the All-Star Game and the playoffs for revenue.
“It’s essential for them to get higher ratings at those events to get the viewership and advertising revenue they want,” Ganis said. “And no team generates the interest and the eyeballs, particularly in the playoffs, that the Yankees do.”
To contact the reporter on this story: Michael Buteau in Atlanta at
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