- John Helyar, Sports Business
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George Mitchell's steroids report hasn't rocked simply the game of baseball. It figures to shake the business of baseball, too.
As an industry, MLB has been even hotter than Josh Beckett in October. It posted record revenues of $6 billion this year. Baseball has more than doubled its take of a decade ago and is closing fast on the NFL as the top-grossing league in sports.
The Mitchell report, though, could jeopardize that run. Maybe commissioner Bud Selig just couldn't stand too much prosperity. He ordered up the Mitchell report and refocused attention on a problem that, in many fans' eyes, had faded as a concern. The Mitchell probe also reopened fissures between the owners and the players' union, just as it seemed peace had broken out after decades of labor battles.
"Steroids has been a smoldering issue for baseball, and the Mitchell report has reignited the fire," says Bill Glenn, a vice president of The Marketing Arm, a sports and entertainment agency in Dallas.
If baseball's owners and players don't take steps in the next three months to address Mitchell's recommendations, he adds, "MLB and some of these individual players have a major issue with marketability."
Among players, Roger Clemens figures to be the top marketability casualty. He earned an estimated $3.5 million in endorsement deals this year, according to Burns Entertainment & Sports Marketing, an Evanston, Ill., agency that matches companies and celebrity endorsers. Will AT&T, which featured him in a funny cell phone ad this fall, come calling again? Not likely.
An AT&T spokesman said that Clemens was hired for just the one commercial, which ceased airing in early November, and that he wasn't under contract. The spokesman declined to comment on whether the company would consider using the pitcher again. In the spot, Clemens calls his wife to ask whether she's OK with his returning to the Yankees. She emphatically replies no, but he doesn't hear because the call gets dropped.
But there's far more downside for the industry as a whole. In 2007, MLB drew a record 79.5 million fans. But scratch the surface of many avid fans, Glenn believes, and the steroids issue reveals big concerns about the game's traditions and underpinnings.
"The steroids era has rewritten records," he says. "People care about these records, and they know baseball has been playing with the tradition and integrity of the game."
If fans don't see the problem as solved, they don't flock to the ballparks. If the public turns off to MLB, as in the bad old days of the strike-marred '90s, so do the sponsors. Will corporate America head for the exits?
No way, insists John Brody, head of corporate sales and marketing for MLB. He says he discussed the investigation and the steroids issue with baseball's 20 national sponsors throughout the 20-month probe. Then he briefed all 20 of them on the report itself in the 48 hours after it arrived in the commissioner's office this week.
"They have all been supportive," he says. "It's an important issue to deal with, and they feel like we are dealing with it."
Officials with two sponsors currently negotiating with MLB for new deals play down concerns.
"Nothing unexpected came out of the report," says Ryndee Carney, a spokesman for General Motors, whose sponsorship expired at the end of the 2007 season. "The sport is healthy."
Says Jeff Urban, sports marketing chief of Gatorade, "I don't think fans will view baseball any differently the day after the Mitchell report than the day before. [The steroids issue] was already part of their perception of the game. When it's Opening Day, the fans will be there for baseball."
But whatever the sponsors say for public consumption or tell the MLB suits, the Mitchell report cannot possibly be good for business. The steroids cloud over baseball had been dissipating over the past two years, after MLB and the players' union agreed to tougher drug policies in November 2005. And this past year, the steroids focus has been almost solely on one player, Barry Bonds, and not on the game.
But the Mitchell report has gathered the clouds over MLB again. Baseball's corporate partners have to be wondering whether the industry really has a handle on the problem, according to former MLB broadcast chief Tom Villante.
"It's created a sense of 'When is the other shoe going to drop?'" he says. "That's not a good thing."
John Helyar is a senior writer for ESPN.com and ESPN The Magazine. He previously covered the business of sports for The Wall Street Journal and Fortune magazine and is the author of "Lords of the Realm: The Real History of Baseball."
At least in the short term, the Mitchell report might not have done the business of baseball any favors, writes ESPN.com's John Helyar.