It was recently reported that attendance is down by 6.5 percent this year across all of Major League Baseball (MLB), a little less than 2,000 fans per game.
What does this mean? Analysts have pointed to a dip in attendance for larger-market teams that do not perform well. Others have pointed to the economy. Basically, when a large- market team or teams (New York, Los Angeles, Boston, etc.) do well in the standings and the economy is strong, attendance numbers are strong.
However, in 2018, the economy is strong and all three large-market teams are in first or second place. However, the Los Angeles Dodgers did start their season by proceeding to populate the disabled list on a daily basis, but more recently, the team is playing some of the best baseball and mashing home runs at a record clip. Los Angeles also just broke attendance records with the San Francisco Giants in town for Father’s Day weekend.
Several teams this year have also dipped in attendance that were in the playoffs or had better records last season than they have this season. As of Monday, the 2018 Miami Marlins are considerably worse this season having traded away their entire starting outfield. They ended 2017 in second place and eight games under .500 versus being 16 games under .500 currently and in last place. The 2017 American League Wild Card Game-winning Minnesota Twins are currently six games under .500 but ended the 2017 season ten games over .500. The 2017 National League Wild Card Game-winning Colorado Rockies were 12 games over .500 but have been slipping and currently sit at three games under .500 in fourth place.
On the other hand, some good teams this year were bad or not as good last season (i.e., the Milwaukee Brewers, Philadelphia Phillies, Atlanta Braves, Seattle Mariners and the Detroit Tigers). Other analysts have pointed to the weather and the use of defensive shift driving down offensive production. All in all, we can agree there are likely many factors driving down attendance.
Nonetheless, the one factor that may trounce of all of them is streaming. Yes, streaming from home or any place other than the stadium decreases in-person attendance, which should have been no surprise. By the way, increased streaming does not mean decreased revenues. Quite the opposite, actually, as streaming requires purchasing copyrighted broadcasts through a license and is paid for by the streamers, broadcasters, etc.
Case in point, Facebook Live is streaming 25 MLB games in 2018 for $30-35 million. That is 25 more game
s than last year, exclusive to Facebook Live, and with 1.45 billion active daily users on Faceboo
k, you can imagine a decrease in attendance to a live event where someone can watch for free from home. Moreover, over-the-top (OTT) distributio
n through social media giants like Facebook Live, Twitter and Snap Chat, plus streamers like YouTube, Amazon Prime and Hulu, are increasingly preferred by fans and expected to increase in revenue and availability over the next five years.
Per Deloitte, an industry-leading audit, consulting, tax and advisory service regarding sports trends:
“By moving ad spend to digital and social channels, teams can more effectively target fans who are already interested in their content. One team leading this trend is the Miami Dolphins, who over the past year has used much of its marketing budget on content development, using social engagement as a mechanism to identify and grow its fan base. This method is particularly important for organizations hoping to capture the loyalty of millennials, whose preferred media mediums are smartphones and mobile applications. By reaching fans where they are and with targeted content, teams will likely grow revenue in ways not possible just a decade ago.”
Deloitte also predicts that by 2022, 25 percent of all digital navigation (up from 5% in 2017), which includes sports content, will be consumed indoors. This means less in person attendance at sport events unless the teams do something to drive consumers back to the ballpark.
Nielsen, a leading global information and measurement company that provides market research, insights and data about what people watch, listen to and buy, says consumer sports trends in 2018 will lead the technological innovation (e.g., streamers) to change consumer habits, which may be an opportunity or uncertainty for traditional sports media companies and teams.
Teams stand to benefit greatly from this change financially. The issue is, will future stadiums become smaller as people prefer to stay at home and watch live sports from their phone while doing something else? Will teams make efforts to get people into the ballpark by reaching them where they are at on social media and while streaming? Financially, does it matter whether a person is in the ballpark or not?
Vendors lose by lack of attendance and of course, lower attendance is a publicity issue. However, if a team executive is faced with lower attendance numbers, that same team might be better off accepting and working with the change versus fighting it. Whether society is better off staying at home is another issue entirely, but not all is bad for baseball when the sport still cashes in from its new distribution partners.