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MLB.com emerges as Internet powerhouse
by Alan Schwarz
In only a few years, mlb.com has gone from a somewhat haphazard league portal to one of sports' most potent websites, leading baseball fans into the era of streaming highlights, print-at-home ticketing and other 21st-century goodies. And did we mention it'll bring in more than $200 million this year, giving hope to the notion of revenue balance?
This leaves Bob Bowman, CEO of Major League Baseball Advanced Media, one of the most influential behind-the-scenes executives in sports. Yet matters aren't all rosy: MLBAM has butted heads with Fox executives, is suing a fantasy site over rights to players' names and statistics, and more. I spoke with Bowman recently about the ups and downs of an Internet powerhouse.
ALAN SCHWARZ: You've always had lots of ideas about how mlb.com can bring baseball to fans in new ways. What should fans look forward to later this year, maybe next year, that's different from the past?
BB: We're making the site a little bit more personalizable. When you go to yankees.com you want to know what we think is important, but we'd like to add what's important for you--which could be stocks, weather, news, fantasy team stats, anything that's relevant. It's an entirely personalizable experience. You'll see that come September.
The other thing more commerce-oriented is ticketing. One thing that we're testing right now is sending someone in New York text a message on their cell phone at 1 o'clock: "Four great seats in row 2 available for Yankees/Tampa Bay tonight, hit 1 for yes, 2 for no." It may be a better way to sell tickets than just by the site. You're going to see that in September as well.
AS: Will fans then get a barcode sent to their cell phone and scan it at the turnstile, with no paper ticket at all?
BB: Some have scanners that won't work with the phone, so they'd have to get it at will call. Some have scanners that can scan it right there.
AS: We're going to get to a point with streaming video where our PDA's can become de facto televisions. How close are we to watching games on our handheld devices?
BB: There are really three issues that intersect there. The first is just basically screen capability--resolution, depth, things like that. It's the same with the barcode--you just need resolution to do that. The second thing is that you need a wireless connection that lets you stream more than 10 frames a second--10 frames a second is nothing more than a very tough slideshow. Sprint has a service on their Samsung phone that can stream live events and it looks OK.
The third issue is the rights issue. Online, we cannot stream games in the local market--in New York, you can't watch the Mets or Yankees. The locating that is done by cell phones is nothing like the broadband locating that we have in place today, where we know pretty specifically where you are.
AS: Since 1999, I've always been fascinated by how revenue from MLBAM--which is shared equally among all 30 clubs--can grow so large as to be a method to significantly level the economic playing field. Your revenue was $135 million last year and is projected to be $235 million this year. That's not all profit of course, but what kind of impact can this have on payroll disparity?
BB: So far, the (MLBAM) board chose not to make a distribution to the clubs. But your thesis is right--we can level the playing field as best we can and distribute it evenly, not unlike national TV deals. That was the goal, it still is the goal. As to when the distribution is made, that's above my pay grade.
AS: In that same vein, everyone likes to speculate that MLBAM will some day go public and be a windfall for every club.
BB: We discussed this a year or so ago, and for a number of reasons it was put on the shelf. But I'll tell you, one of the reasons that it has been put on the shelf is that we need to be a good company, not a good stock. We still need to be smarter and run better. A four-year-old company, even in its heyday? That's early. Google was seven when they went public. I think there's something to be learned from that. Seven years is pretty fast, but it's hard to argue with anything that Google did.
AS: Your $650 million deal with XM has frustrated some local rightsholders who once had more exclusivity in their markets. And recently a Fox executive complained about your webcasting their feeds, saying, "We have a fight every day about something" with MLBAM and "It is ugly." What's your approach to navigating these competing worlds?
BB: Whether it's satellite radio, satellite TV, cable TV, streaming games, whatever, the fan is going to tell us where and when he or she wants to and can enjoy the game of baseball. You minimize impacts that you might have on a rightsholder, like the local radio or the TV folks, and then eventually show that it doesn't affect it. We have history to show that our streaming games (on the Internet) did not adversely affect ratings. You've got to take it as a given that if there is a device, cell phone, PDA, satellite radio, whatever it might be, baseball has got to be on it.
AS: MLBAM is now in litigation with a fantasy league website, claiming that the service needs a license to use players' names with their statistics. Why are you pursuing this?
BB: I would argue that the statistics are in the public domain. On the other hand, when you start using a player's likeness or name, attach it to something that is a commercial endeavor, you have moved to a different plane. I don't view that any differently than taking someone's likeness and putting it next to a Coca-Cola can.
AS: But they're not using likenesses or logos. They're simply using names and statistics, which are merely facts.
BB: I believe the name is a likeness. My view is that when you're using a name for a commercial endeavor, that is a different effort. If all these services were just saying, "Here are the stats," and they weren't selling a service, that is fine. But when (customers) pay money for a game or (a company) advertises for a game, you are now utilizing aspects of baseball in a commercial endeavor in an unlicensed manner. That's what the lawsuit is about.
AS: What's interesting is that a few years ago, some retired baseball players came together and sued MLB to say, "You can't use our names and stats in your programs and marketing materials," and MLB argued against that and won!
BB: I think the republication of stats is a totally different activity than running a game. Without box scores, USA Today still exists. Without the players' names and stats linked together, there is no purpose in a commercial enterprise.
AS: Several years ago, you and I discussed your grand plan to outfit every stadium with a multicamera system that would capture pitch and hit speeds and trajectories, allowing for all sorts of new data on which to rate players. What is the status of that?
BB: We tested the program, it works great. I anticipate that we will embark on starting to install devices in parks this year, even this baseball season. Our only hope is that the cameras that we put in there will be able to capture and distribute the data in real time. I would anticipate that we would have an announcement on what we're going to do certainly by September. The technology is there, it's just a question to make sure the clubs are on board.
AS: So is it possible that fans will be able to get this type of information in this year's postseason?
BB: That is our goal. We have to make an educated guess as to who would be in the playoffs, find a club that is a trendsetter. Wouldn't that be a nice little coda to this story?
You can reach Alan Schwarz by sending e-mail to firstname.lastname@example.org.