How the Yankees can help ease MLB’s economic concerns

So much of the contemporary conversation about baseball revolves around the long-term economic health of the game. Attendance is volatile, cord-cutting is on the rise, and people generally seem to think that baseball is “boring”. Despite MLB posting record revenues annually, there’s a real fear that it’s not sustainable.

I’m never sure how much of that to believe. Lots of big TV money is locked in for the better part of a decade, and teams like the Cubs and Yankees are in the midst of transforming their regional sports networks to better serve a changing baseball consumer. The way the game is being presented may change, but that doesn’t necessarily mean for the worse.

To this point, I think it’s useful to direct you to this oped from this summer, breaking down the real demographics of baseball fans. We hear a lot about how baseball fans are only getting older, and the kids just don’t care. That’s actually not true, and it reveals what I think are some pretty common misconceptions about generational divides:

When it comes to baseball, Gen Z is all in. For perspective, millennial and Gen X sports fans have a strong preference for the NFL as their favorite sport — by nearly a 2-to-1 margin. For Gen Z, MLB has rallied to pull even with the NFL as their favorite sport.

Gen Z is sort of this weird, often underlooked consumer group, usually lumped into the wonderfully nebulous concept of the “millennial”. Gen Z kids are generally agreed to have a birth year of 1997 or later, and are the first generation of digital natives, on the whole not knowing a world that wasn’t connected.

I’m a couple years older than the oldest Gen Zers, and while we share a lot of general political and cultural beliefs and consumption habits, I remember doing schoolwork and keeping in touch with friends in an analog world. This isn’t really the case for most members of Gen Z.

We know also that Gen Z tends to root less for teams, rather cheering for individual players. This probably stems from the accessibility of the modern athlete: you don’t need to watch the Golden State Warriors to follow Steph Curry, not when he has Instagram and highlights posted on Twitter. I think this is one reason why baseball is so popular among the youngest generation.

Baseball, at its heart, is a team sport made up of individual moments. When Curry gets the ball at the top of the arc, he can take the shot, or pass. A quarterback running a read option has to decide whether to hand the ball off, or try and make a throw himself. Baseball players don’t really get to do that.

When it’s Aaron Judge’s time to bat, he has to bat. Judge doesn’t get anyone’s help in hitting a Justin Verlander fastball; it’s going to be an individual event. The very nature of the game is built to shine a light on the individual athlete, and when you combine that with the accessibility of modern social media, it’s not hard to see why Gen Zers would gravitate towards baseball.

This is where the Yankees have a tremendous opportunity to groom a new generation of fans. They’ve assembled a young, charismatic, and talented group of players that happen to work under the banner of the most recognizable brand in pro sports. I think the Yankees do a pretty good job of leveraging guys like Judge, Gary Sanchez and Didi Gregorius, especially on social media, farther from the oft-critical eyes of the “traditional” baseball fan.

They could always do more, though. The organization has seemingly not extended the same goodwill to Clint Frazier, another young player who has perhaps the best grasp of social media of anyone on the team. This isn’t yet another post that’s going to challenge the Yankee handling of Frazier, but tamping down a player with his kind of personality isn’t conducive to the outreach baseball has to do to gain new fans.

The second dominant trait of Gen Z consumers is fairly interesting, and represents perhaps a more titanic shift in baseball economics than the loss of team affiliation. Gen Z doesn’t watch entire games, and we’re not talking baseball. Quoting again from Vince Gennaro’s piece:

Boomers engage with their favorite sport primarily via watching games on broadcast and cable TV and attending live events. Conversely, Gen Z seldom watch full games, and it is rarely via broadcast or cable. They are more likely to consume their sports via the internet, watching parts of games, listening to podcasts, playing fantasy sports, devouring highlights on social media and cruising websites that cover their favorite team. For their favorite sport, 41% of Gen Z’s “engagement” is through TV, while for baby boomers, it’s 75%.

This holds true for baseball, football, hockey, whatever. Gen Z is often called the generation of partial attention, and not without reason. I’m not even a Gen Z, but I’m writing this post on my laptop, with two MLB.tv games on my second monitor, listening to a Frightened Rabbit album and co-ordinating a date for this weekend on Snapchat. Young people are constantly interconnected and absorbing multiple forms of content at once, and the key is our smartphones and broadband connection.

Yes, mom and dad, we can yearn for the days when people didn’t have a supercomputer in their pocket, but the genie isn’t going back in the bottle. Successful firms lean in to the ubiquity of the iPhone, and MLB can’t afford to be any different. Baseball has already experimented with greater spread of highlights and even full games online—although only through the most traditional content creators—that directly target mobile users. The risk now is complacency, and again the Yankees appear poised to lead the pack.

Of course the most valuable regional sports network (RSN) in baseball was just sold back to the New York Yankees, who acquired YES while partnering with an up-and-coming tech firm you may have heard of, Amazon. Amazon just about the most valuable, versatile entity since the East India Company, and carries everything you’d need to build a new digital content platform.

Their June 30, 2019 filings include forty billion in cash on hand, not to mention a near unprecedented level of personal data on its users, knowing intimately the ways Amazon customers buy, use, reuse and dispose of products and services. Of course, they have their own streaming platform and film production, just what one would need to begin delivering baseball content to more than one hundred million Prime users.

I don’t believe for a second that Amazon exists as a silent partner on the YES deal, existing only to see a return on investment. There are plenty of outside investors that would be happy to front the cash and stand on the sidelines waiting for dividends - including the Ontario Teachers’ Pension Plan, no strangers to silent sports investing. Amazon was chosen for its strategic advantage, its ability to leverage digital services to better reach out to the very consumers that exist primarily in the digital space.

That’s not to say that any of this will work. Gen Z consumers tend to be about as brand loyal as other generations, but for different reasons. Above all else, a Gen Zer needs to be engaged by their brand in order to stay a faithful customer. Simply plopping a streaming service in front of them may not have the same affect a comparable service, like cable television, had on a more passive consumer generation. A new level of engagement is needed on baseball’s end, and it’s a possible obstacle to the usually uptight New York Yankees.

Baseball, economically, is probably in better shape than the regular panicky articles might suggest. The key to the future, though, lies in an entirely new group of consumers. Fortunately for the New York Yankees, they have a pair of advantages that should make it easier than most organizations to reach young people where they gather. If MLB preaches Let the Kids Play, the Yankees are perhaps best positioned to Let the Kids Consume too.