Local TV Ratings Are Good But Also Can’t Get Better

In recent years, Major League Baseball has taken steps to make its product available by means of multiple platforms. A daily broadcast, for example, is offered both on ESPN+ and MLB.TV. A weekly one is carried by Facebook. MLB Network is accessible as part of basic packages available through streaming providers like DirecTVNow, Playstation Vue, and YoutubeTV, while the league broadcasts national games on its own network, at ESPN, FOX, FS1, and TBS. The game is out there for consumers who are interested.

That said, there is still a transition to be made before baseball can fully introduce itself to a younger generation of fans. The presence of Regional Sports Networks (RSNs), however, remains an impediment to evolution. RSNs generate massive revenues for MLB teams, either through contracts or ownership, but also require exclusivity. The reason for that arrangement is pretty clear when examining the viewership numbers and ratings (recently published at Forbes) for all teams except the Blue Jays. The graph below shows the average household numbers (HH) per team.

The numbers look how you might except, with New York, Boston, and Chicago (Cubs) drawing the most viewers, while smaller markets and bad teams occupy the lower ranks. The Dodgers’ audience should hypothetically be a lot larger, but the club still hasn’t been able to reach an agreement to get on DirecTV in Los Angeles. Despite that, more than two million people are watching baseball on an almost daily basis for six months out of the year. That’s incredibly valuable.

For networks, those loyal customers help RSNs secure large carriage deals with cable providers and to appear among standard cable packages, charging several dollars per subscriber. Advertising is nice, but RSNs make a vast majority of their money from per-subscriber fees. In turn, the networks dole out large guarantees to teams. The continued high ratings tend to justify these deals. The graph below shows the ratings, which are based on viewers within a market, as opposed to the total household figures.

Size of market isn’t the only factor that determines viewership. Cleveland, Kansas City, Milwaukee, Minnesota, Pittsburgh, and St. Louis are all holding their own. While Pirates fans might have been disappointed with the organization’s direction this past winter and stayed away from the park, there is still considerable interest in the team judging from the ratings. The A’s and White Sox feature lower ratings than one might assume relative to market, but both are forced to compete with considerably more popular teams. For both organizations, winning would help things considerably.

Overall, audience numbers are down slightly from where they were a year ago at this time, but that’s also true for much of television. Relative to other TV programming, the figures here are pretty comparable to last year’s.

More than one-third of clubs are the highest ranking program in their market, with more than two-thirds ranking in the top-three. When considering only cable channels, baseball does even better.

Baseball lost a little ground from last year, with Marlins’ and White Sox’ ratings falling a bit. While, overall, the numbers are pretty static relative to last year, that’s not true when looking team by team. Here are the percentage changes from around this time last season.

The teams on the left side of the graph either made some moves to contend in the offseason or are winning now. Either way, they’ve generated interest among viewers. The big losers on the right side of the graph are the teams that did little to help themselves in the offseason and created little to no expectations for a winner. Sometimes, these changes happen faster and in a bigger way than attendance because of the ease with which a fan can turn on or off the television. The graph below compares the change in ratings to the change in attendance from last season.

The numbers mimic each other pretty well, with the suffering teams finding considerably fewer suffering fans. Teams like the Royals and Tigers have historically had pretty good ratings, so they have a higher point from which to fall, but it isn’t hard to see why interest in either club is more subdued this season than it has been in the past. The Braves are in the second year of a new stadium so having an attendance increase is actually something of an anomaly, but interest in the team is clearly higher now that the club is winning.

For the most part, we see some positive signs here — namely, that more people watch and attend the games of those clubs expected to do well. That should provide teams with incentive to put good products on the field, particularly if they own part of the RSN or if they have a contract negotiation looming. Houston’s terrible team a half-decade ago probably didn’t help matters when they tried to start a new RSN — and might have pushed it closer to failure and, ultimately, bankruptcy.

As for the bad signs, most obvious is that the numbers here don’t represent an improvement over last year’s. They also don’t represent an improvement on those recorded the year before that. Barring an end to the carriage dispute in Los Angeles, it is hard to see a major recovery on that front in the near future. That’s due to factors outside of baseball’s control — mostly immediately that cable providers keep losing customers. Overall, those numbers are small, but the younger the demographic, the more likely they are to watch streaming services on their television as opposed to cable television. Getting local RSNs on skinnier bundles like DirecTV Now, Hulu, Sling, and YouTube is good for baseball as people transition from traditional cable to streaming.

Unfortunately, as viewing options become more segmented — and more and more relatively small streaming services targeted at niche populations are arriving — baseball’s most important audience for growing the game are the kids who have no choice regarding what subscriptions their parents might choose. Baseball teams have made billions of dollars off of exclusivity when it comes to television because nearly everyone had a cable subscription. To draw new, younger fans, the league will have to make sure it still has access to as many homes as possible. Games on Facebook and free MLB.tv games provide some of that access, but the sport will need to do a lot more to help make sure their fans get as excited about baseball as the generations that preceded them.