Economic damage to the game and its players is already acute. Mets pitcher Max Scherzer, who shortly before the lockout inked the richest contract in baseball history, stands to lose nearly $233,000 a day, according to an Associated Press study. Clubs are missing out on lucrative national, local and online broadcast deals and their advertising haul, estimated to be slightly more than $1 billion annually, according to people familiar with MLB’s operations. Advertising drives in roughly 10% of baseball’s $10 billion in annual revenues, making it one of the game’s largest sources of its riches.
How brands are dealing with the cancellations is still something of a mystery. Official MLB sponsors including Anheuser-Busch InBev, Hyperice, Taco Bell and LoanDepot declined comment; several others contacted by Ad Age had not returned messages. The lockout has not stopped AB InBev from renewing its MLB sponsorship: The brewer extended its pact for four more years, according to a report from Beer Marketer’s Insights, including an arrangement that includes Budweiser branding in postseason locker room celebrations.
A spokesman for the MLB Commissioner’s office declined comment to Ad Age but pointed to an open letter to fans expressing regret from Commissioner Rob Manfred. The Major League Players Association did not respond to a request for comment.
Sports marketing experts said that near-term tasks for brands should include informing their partners that events scheduled around opening day—for example, events in stadium suites—would no longer happen. Pocket schedules—a popular sponsored early-season giveaway for nearly every MLB team—have already been rendered useless for 2022, given the early cancellations and the likelihood that schedules would have to be reconfigured when the season commences.
“It’s embarrassing to have to tell people, we promised you all this and we can’t deliver,” said Ricardo Fort, a former Coca-Cola sports marketing executive who today runs a consulting firm called Sport by Fort Consulting. “It’s an unnecessary hassle.”
No replacement
Far bigger implications lay however on the fate of funds not spent on advertising. Some experts anticipate brands would be reluctant to redeploy the spend, given the unique nature of the sport and the timing required to shift gears.
“If you’re a broadcast sponsor and the first two weeks of the season are canceled the company could say, let’s put that money in our pocket, it’s a savings to us. The financial people will want to take that to the bottom line,” said Tony Ponturo, a consultant who previously served as CEO of the in-house agency leading sports marketing deals at Anheuser-Busch. The brewer at one time not only owned the St. Louis Cardinals (from 1953 to 1995) but spent approximately $100 million annually on baseball-related advertising, most of that with local teams. “If you want to re-use that money on other things, then you can expect a tug-of-war between the marketers and the CFO.”
Smart brands will likely have alternative plans in place, Fort added, but none of these would replicate the day-in, day-out rhythms of baseball or necessarily reach the same audience.
“If they haven’t been planning for this type of scenario, then that’s a problem,” Fort said. “Brands have a window in their calendar called ‘baseball’ that they’ve already sold to their customers, with material that’s impossible to put elsewhere. There really is no replacement.”
Dale Song, chief partnerships officer, consulting, at Omnicom’s Optimum Sports division, agreed.
“All the reasons that advertisers leverage baseball still exist: It’s the right audience, in the right markets, at the right time of the calendar year,” Song said. “It occupies a space that is not easily replaceable, so it’s not as linear as redistribution of dollars elsewhere.”
Growing disillusionment
Fan sentiment on social media sites would appear to strongly favor the players.
A tweet from California Angels superstar Mike Trout condemning Manfred had nearly 100,000 likes within a few hours Wednesday, while responses to an MLB tweet containing Manfred’s statement to fans was met with the kind of public reception that Red Sox fans would save for the Yankees’ Derek Jeter.
But an accompanying disillusionment with both sides was also taking hold, with thousands of fans pledging not to attend games when they resume, and vowing to eschew purchases of MLB licensed merchandise. The average age for nationally televised baseball games in 2019 was 57, according to Optimum Sports, suggesting there is much to lose for a sport that has long struggled to cultivate a younger audience more attractive to advertisers.