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Baseball: Meet the new boss, same as the old boss

Major League Baseball has a new man at the helm, and he's unlikely to rock the financially flush MLB boat.

Rob Manfred speaks at a press conference after being elected by team owners to be the next commissioner of Major League Baseball.
H.Darr Beiser | USA TODAY Sports | Reuters
Rob Manfred speaks at a press conference after being elected by team owners to be the next commissioner of Major League Baseball.

The highly anticipated game of electing a new commissioner for Major League Baseball went into extra innings Thursday afternoon in Baltimore. The first balloting of the 30 team owners, gathered at the Hyatt Regency since Wednesday, resulted in 22 votes for MLB Chief Operating Officer Rob Manfred and eight for Tom Werner, chairman and one of three owners of the Boston Red Sox. (A third candidate, Tim Brosnan, MLB's executive vice president of business, bowed out earlier in the day.)

The winner needed 23 votes. A second round produced the same tally. Finally, the sixth ballot proved charming for Manfred, who will succeed Bud Selig, 80, when he retires on Jan. 25 after 22 years at baseball's helm.

Manfred, a 55-year-old labor lawyer, has been Selig's right-hand man since 1998 and a major figure in a front office that's seen MLB's annual revenues skyrocket to more than $8 billion, team values average $1 billion and player salaries average $3.3 million.

His biggest hits were negotiating three collective bargaining agreements with the Major League Baseball Players Association (2002, 2006 and 2011) without a work stoppage and overseeing the league's crackdown on performance-enhancing drugs.

"Baseball players' share of revenue is about 50 percent, which is what it roughly is in all the other major professional sports. And they've done it without a salary cap." -Andrew Zimbalist, Economics professor, Smith College

With baseball doing well financially, don't expect Manfred to upset the status quo.

"There's so much money coming in from MLB Advanced Media [the league's Internet and digital venture], local television contracts and national TV revenue," said Tyler Kepner, a baseball columnist for The New York Times, after attending Thursday's proceedings. "The game's in a pretty healthy place business-wise."

Andrew Zimbalist, a professor of economics at Smith College who closely follows baseball, concurred. "The sport is doing well," he said.

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Nonetheless, there are a number of business-related issues Manfred will have to deal with in the next couple of years.

"The biggest one is how to engage young fans," Kepner said, alluding to the well-documented fact that baseball, long lauded as the national pastime, continues to fall behind the National Football League and National Basketball Association in popularity, especially among the digital generation.

Werner and some other owners critical of Selig are among those who want to see the game speed up its comparatively slow pace. Suggestions include a time limit between pitches and minimizing the number of times a hitter can step out of the batter's box. Such modifications won't be easy, though, Zimbalist warned, "because the players' union has to agree to any changes."

The current collective bargaining agreement with the MLBPA expires after the 2016 season, and considering Manfred's track record, no storm clouds appear on the horizon. There may be tweaks to the luxury tax and revenue-sharing plans that have helped achieve the competitive balance that Selig championed, as well as stiffer penalties for players caught using performance-enhancing drugs, and smaller signing bonuses for international players when they're drafted. "But I don't see any deal-breakers out there," Zimbalist said.

Chicago White Sox owner Jerry Reinsdorf has long advocated a salary cap for MLB, but "it will never happen," Kepner said flatly.

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The reason is simple, Zimbalist said: "Baseball players' share of revenue is about 50 percent, which is what it roughly is in all the other major professional sports. And they've done it without a salary cap. They've needed a revenue-sharing system, the luxury tax and some debt rules. Both sides basically accept that."

Of more concern, Zimbalist added, are the exorbitant prices being paid for local cable TV deals to broadcast games.

"We have a bubble, with rapidly expanding revenues," he said. "The question is whether they're going to start flattening out or even turn down in some places" when renegotiations come around.

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Manfred will inherit ongoing battles in Oakland, California, and Tampa Bay, Florida, where the owners of the A's and Rays, respectively, have threatened to relocate. He'll have to address criticism of MLB's new instant replay system and continue international expansion of the game.

Off the bat, though, Manfred himself, shortly after being elected as the league's 10th commissioner, noted his first order of business.

"I think probably the biggest challenge is filling the shoes of the gentleman standing to my right," he said.

There beamed Bud Selig, whose legacy looks intact for the time being.

—By Bob Woods, special to CNBC.com

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