Everyone wins with money made in MLB Playoffs
With the abundance revenue generated by the Major League Baseball postseason, even the losers are winners – at least in their bank accounts. As Fangraphs.com pointed out, a variety of parties across MLB benefit from the money made in October and the MLB Playoffs.
Though the MLB Commissioner’s Office would never make this public admission, it undoubtedly would like to see the New York Yankees face the San Francisco Giants in the World Series? After all, the Commissioner’s Office receives 15 percent of all attendance receipts for postseason games, and since the Yankees and Giants have the highest ticket prices of the clubs that are in the playoffs, the longer they remain alive the more money that MLB will get, and television money is the game changer.
Major League Baseball is a lucrative business with the recent signing of lucrative network television deals with Fox, ESPN and TBS. Fox, for example signed an eight-year deal for $4 billion dollars that gives teams $500 million dollars to share.
For their $2.4 billion extension, TBS holds on to one league championship series (alternating the ALCS and NLCS with Fox each year), two division series and one wild card game which will alternate between the AL and NL each year.
As determined by an internal document called the Major League Baseball Rules and the Collective Bargaining Agreement between the owners and the Major League Baseball Players Association adds an additional layer. Collective Bargaining Agreement, postseason ticket revenue is divided this way:
- 36 percent to the World Series Winner
- 24 percent to the losing team in the World Series
- 24 percent to the two losing teams in the League Championship Series
- 13 percent to the four losing teams in the Division Series
- 3 percent to the two losing teams in the wild card game
MLB Rule 26 reads that paid attendance receipts are represented by the “total sum of gross receipts from tickets sold” in each postseason game minus admission tax, sales tax or use tax. Additional heavy revenue generators – like concessions, merchandise and other revenue not related to ticket sales – are not included in this number.
It is MLB Rule 45 that grants the Commissioner’s Office 15 percent of paid attendance receipts for every postseason game. The remaining 85 percent is divided in this manner:
- Fifty percent from wild card games to the Players Pool
- Sixty percent from the first three games of the Division Series to the Players Pool
- Sixty percent from the first four games of the LCS and the World Series to the Players Pool
- Paid attendance receipts that are not paid to the Commissioner’s Office or given to the Players Pool are equally shared between the two clubs in each series or wild card game.
Winning the World Series is a rare feat for most teams. Yet reaching the World Series is a tremendous financial incentive for every player involved, especially young guys receiving minimum salaries and any player who is yet eligible for arbitration.
October baseball is still about the drama and the thrills, but now more than ever it is also about the money and lots of it.