This year, Major League Baseball will see the game making just over $6 billion in revenue. This is a 50% increase from 2004 and in comparison, the more popular National Football League (NFL) has only seen sales growth at half the rate over the same time period.

I do not profess to be an expert in America’s favourite pastime. However, looking at the reasons for its pristine economic growth, there are many lessons one can learn in an effort to make money. Not just online but in any situation.

1. Aggressive marketing
The MLB, as with any other American sports, has multiple concurrent media advertising campaigns. You can read about the game everyday, and its online presence continues to grow.

While I believe the print media still provides the primary source of information for home fans, the Internet allows the game to reach beyond its source of origin. In countries where the only live games televised are often from the 2 most popular ballclubs (the New York Yankees and Boston Red Sox), the Internet serves as the best information source. The MLB also does its fair share of aggressive slogan marketing and brand awareness campaigns, pumping money into this channel and that of broadcast media. No general advertising slot goes by without at least one baseball commercial. As a result, fans like myself can keep up to date with the sport, while a subconscious seeding of the game grows mentally from repeated exposure.

If you work online, effort spent on marketing is just as important as other areas. The amount of effort and money spent doing it parallels with the results you obtain. The wider exposure you aim for, the more awareness created. Getting the right branding whether via taglines or slogans can also contribute to the success quotient. The higher your visibility, the more people will notice you.

2. Greater number of baseball games played
The MLB sees 162 regular season games played by each franchise per season, compared to the 16 games played by each NFL team. Critics have argued that this distorts the relative revenue potential of the MLB and the figures generated are often boosted as a result. However, having more games does not necessarily result in more money. There is a need for concerted effort to sustain fan interest due to repeated exposure. If the sport does not provide excitement in any case, interest would be low and revenue would be negatively impacted. The MLB must be applauded for putting the two together, as evidenced from the rising ticket sales and broadcast revenue.

The Internet is practically flooded with websites and blogs clamouring for attention. The massive numbers raise the game in the competition for the consumer’s dollar. You have to do just as much to make your site stand out. Even with that, there is an even greater effort to keep clients glued to your site for repeated returns. Quality content, visibility through networking - all these are required if you wish to parallel the MLB’s achievements in greater revenue returns. The large numbers on both sides of the divide - visitors and other sites - also present huge potential if you can stand out.

Image courtesy of Somewhat Frank

3. Entry into new markets
As mentioned above, the MLB has successfully created more exposure of the sport in other countries, especially in those where the sport already has some presence (e.g. Japan, China, Taiwan, South Korea). Not too many years ago, its brand in these places were not as strong commercially. Now you can find an official MLB store in Seoul, sitting opposite that other American (food) pastime of doughnuts (and coffee) - Krispy Kreme. Staging season openers in Japan (twice previously in 2000 and 2004) looks set to continue in 2008, with another two exhibition games in China at Beijing’s Olympic venue in the year of the global sporting event.

Baseball has a strong following with fans in these countries. With players (e.g. Chien-Ming Wang of the New York Yankees, Ichiro Suzuki of the Seattle Mariners, Daisuke Matsuzaka of the Boston Red Sox, etc) from these countries exporting their talent across the Pacific to a larger global stage both in terms of playing standards and media exposure, the situation is a win-win for both the MLB and the countries’ leagues. Millions of fans subscribe to cable to watch live televised games of their local heroes in action, often in the wee hours of early morning, and broadcast revenue such as from licensing rights increases many-folds. One only need to look at how soccer’s English Premier League has grown to a billion pound industry in itself, to realise the money potential in sports’ global evangelisation.

While the USA has always been the majority market on the Internet, there is huge potential in the still largely untapped international markets. The language medium will always be the stumbling block, but English is still the most commonly used business language world-wide, for example. The ideal of working from home and making money online is a universal one. Already, there are increasing reports of this practise in Singapore’s print media. Malaysia has a burgeoning network of aspiring online marketers. Admittedly I do not have figures of other continents’ participation in such ventures, but expansion into these markets can certainly be explored if you wish to extend your reach and earning potential.

4. Addition of other non-traditional revenue channels
Most sports often rely on the traditional routes of earning through ticket sales and broadcast rights. Following others, the MLB have also climbed on the online ticket resale market gravy train. While this has led to many fans gawking at the crazy prices listed (some in excess of 5 figures), they are often set by free market forces of basic demand and supply. In the past, the MLB and its teams have reacted negatively to secondary ticket markets, with knee-jerk reactions of pulling tickets back from season ticket holders to prevent reselling. They looked upon it as competition to their own revenue sources from ticket sales.

Today’s reaction is different - “Without question, the increasing knowledge that there is a vibrant, safe, legal liquid market for the tickets encourages our fans to buy season ticket packages, since they know they can recoup some of those costs.” - Bob Bowman, CEO, MLB Advance Media, courtesy of CNNMoney.com

The online money making niche provides a rich source of profit generating opportunities. The variety of methods can easily leave anyone confused as to which to use. The answer has always been to test each one out until you find the best fit individually. Relying on traditional sources of income can make you a living, but it can seldom make one rich given the competition. Researching and tinkering will lead to better understanding and knowledge - the decision to include them would be straightforward if they add to your portfolio. While protecting one’s own interest is integral, a model which transfers some benefits to consumers and partners can also prove to be even more beneficial.

Image courtesy of Conlawprof

5. Revenue sharing
The MLB has a revenue sharing model, where the teams generating more local revenue (i.e. New York Yankees) are bound to share certain percentages with the poorer franchises. While I will not go into the specifics, revenue sharing has resulted in the leveling of the playing field both on and off. This year saw more teams involved in the race for postseason spots till late in the season, and many were non-traditional franchises. With more competition, fan interest naturally increases. Operating income and team values also rose with revenue from the model pumped back into team improvements both in terms of player recruitment, payrolls and grassroots or youth development.

This may not extend in the most direct sense to the online world, as revenue sharing in a free market environment seems far fetched. But apply that to value sharing and helping other marketers and bloggers can reap similar dividends. It is oft-said that giving more value to your clients can bring returning business opportunities. Doing the same for your fellow online marketers and bloggers can result in the same benefits. Through sharing and nurturing, future partnerships and JVs can be established, leading to potential business expansion. Reinvestment of your own revenue can also contribute to that.

Image courtesy of Malingering

6. Competitive balance
Finally, a point that has been brought up continuously in this theme - the growth in the sport has seen a more competitive league overall. The richest franchises do not necessarily dominate the game (although it appears that the Boston Red Sox will sweep the Colorado Rockies with Game 4 tonight). This is always key to any sporting league staying fresh and interesting in fans’ minds. If you study soccer leagues such as the Dutch Eredivise (their Premier division) and the Scottish Premier League, the negative impact on the global interest is evident as traditionally only 2-3 teams dominate the game in both countries. It provides no greater incentive for fans to stay away from stadiums and games. Revenue dips as a result and the leagues do not make as much money compared to those in England or Spain.

How is this relevant to our industry? You need to stay competitive. Coming up with fresh ideas in making money rather than following the masses. While the leaders in our field often drive the revenue sources in their favour, if you can be unique and creative in the use of existing models to establish yourself, success and profit will follow. Following the authorities is a fast-track blueprint for early results. But if you wish to maintain long term viability in your business and attain greater breakthroughs, developing your own ideas and products for differentiation would set yourself on a level (or higher) playing field and be helpful in gaining a larger share.

The MLB does not offer any unique business concepts to assist in its monetary growth. Many successful businesses often do not. What it does instead is to build on existing assets and step out of its comfort zone of relying on traditional practices. There used to be a time when the league even feared to reveal its economic growth. Now, they are more than happy to do the opposite. If you can do the same with your online endeavours, the returns can outperform expectations. Most of the tools at our disposal are no different from those already successful. Why do your results have to be any different?

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