Sports And Money: MLB Wild Card Means Big Revenue

by August 26, 2015
(Via Flickr.com user Stròlic Furlàn)

(Via Flickr.com user Stròlic Furlàn)

Six weeks before the regular season ends, Major League Baseball’s postseason is fast approaching. American and National League teams are competing for five playoff spots.

Three years ago, just four teams in each league battled to reach the World Series. That changed in 2012, when MLB added a single elimination wild card game to spice up October.

After three years of the new playoff format, it’s clear that adding these games has been a huge win from a money perspective, for the league and its players.

From a television ratings standpoint, the wild card has been a boon to MLB.

Last year’s showdowns between the Kansas City Royals vs. Oakland Athletics and Pittsburgh Pirates vs. San Francisco Giants both garnered more than five million viewers.

The two showdowns’ TV numbers also represented a 12 percent increase from 2013’s viewership. The only postseason games with more viewers in 2014’s postseason came in the Championship Series and the World Series.

The Royals-Athletics showdown was especially exciting, as the game went to 12 innings before Kansas City finally edged Oakland.

But the wild card’s success goes far beyond television ratings. As Wendy Thurm first wrote for Fangraphs in 2012, the two games add more revenue for both the league and its players.

Here’s why.

Right now, all postseason ticket revenue — which doesn’t include merchandise or concession sales — is divvied up between teams, the MLB’s commissioner’s office and the players. Fifteen percent of that money goes to the commissioner.

Here’s Thurm on the remaining percentages:

• Fifty percent of the paid attendance receipts from the Wild Card games is contributed to the Players Pool. (This provision was added in the new collective bargaining agreement.)

• Sixty percent of the paid attendance receipts from the first three games of the Division Series is contributed to the Players Pool.

• Sixty percent of the paid attendance receipts from the first four games of the Championship Series and the World Series is contributed to the Players Pool.

• All paid attendance receipts not paid to the Commissioner’s Office or contributed to the Players Pool is shared equally between the two teams in each Series or Wild Card game.

According to Thurm, 2013’s postseason ticket sales contributed $62.68 million to the Players pool.

That’s a whole lot of cash, and it’s going into players’ pockets.

In 2013, each eligible member of the World Series champion Boston Red Sox received a $307,323 payout from the Players Pool, according to Forbes. The Giants, who won it all in 2012, got an even higher paycheck of $370,873.

Here’s where it helps to have a bigger stadium: the Giants can sell approximately 4,000 more seats per game than the Red Sox, and correspondingly, take in more revenue.

For story ideas, try to calculate how much your team profited from the 2014 postseason. Talk to players about how they’ve spent their extra October cash in the past. How have local merchants made out?

Then, if your team is poised to make the playoffs, investigate how much money it can make from the extra concession and merchandise sales if it goes all the way to the World Series.