The state of baseball as a business on opening day

Toronto Blue Jays’ Kevin Pillar dives safely into home past Philadelphia Phillies’ catcher Cameron Rupp during the sixth inning of a spring training baseball game in Dunedin, Fla., March 31, 2015.
Reinhold Matay | USA Today Sports | Reuters

The 2015 Major League Baseball season gets underway on Monday with the sport dealing with an aging, shrinking television audience—yet league revenues, franchise valuations and player salaries are all rising faster than the stock market.

With the average MLB team now worth more than $1.2 billion and the average salary breaking $4 million, let's take a look at how the business of baseball has changed in the last few years.

A shrinking, aging television audience

"The five most-watched World Series aired in the five-year period between 1978 and 1982," said Brad Adgate of Horizon Media. All five averaged more than 38 million viewers. Contrast that with the 2014 World Series audience—a skinny 13.8 million—down 64 percent despite an increased U.S. population. Media buyer Adgate said that's "unlike the Super Bowl, which has set an audience record in five of the last six years."

Not only is the audience declining, but it's aging too: Last year's World Series had a viewer with a median age of 55.6—a new high. Just five years prior, it had been sub-50 at 49.9, and was in the 44-46 range during the early 1990s.

Bob Bowman, president of business and media for Major League Baseball, cautions not to read anything into these numbers. Focusing on the most recent five-year trend, he said "ratings are roughly flat nationally, but are very strong on the local level."

"It's some of the most valuable content any regional sports network can have." Bowman said, adding that "all linear TV is getting older for everything, not just baseball."

He thinks the old ways of audience measurement "need to be refreshed" because so many people are now consuming it digitally. He believes baseball's overall audience is the second youngest behind basketball, when you figure in digital followers. Baseball offers a variety of popular digital options, including an iPhone-streaming app for just $20 per year.

Record high revenues

Despite the ratings stubbornness on traditional television, revenues are sky-high.A new eight-year TV deal pays the league $1.55 billion per year—more than double the previous agreement. Adgate's analysis shows that relative to other options, baseball is still a winner: "Even the lowest World Series today delivers more than twice the number of 18-49 year-old viewers than the typical prime-time show." Baseball's deal is similar in growth to the NBA's massive new television contract, continuing the trend of live sports fetching a high price tag because viewers watch live and don't skip commercials.

Franchise valuations rising too

That giant TV deal has led to a huge spike in the league's overall value. The 30 teams combined are worth $36 billion now, according to Forbes—an average of $1.2 billion per team. "It isn't just the TV deals,'' the players' union boss, Tony Clark, told The Associated Press. The league has seen higher valuations for a variety of reasons:

First, a rising stock market is increasing valuations on all assets—like baseball teams—and allowing owners to buy a team with less debt. Second, a series of very strong local cable TV deals is helping teams cash in on top of the national deal. This is what Bowman referred to earlier, that local games are often "the highest-rated programs every day." Third, local stadium and real estate developments are increasing team values. And finally, the digital arm of baseball, MLB Advanced Media, is the biggest growth area of them all. MLBAM could be worth $10 billion to$15 billion, according to some analysts. As it's owned equally by the 30 teams, that share would provide each franchise with up to $500 million in value, before considering any other part of the team.

Player salaries at record highs—but are they high enough?

This will be the first season with player salaries averaging over $4 million. That's more than double the $2 million average in 2000. And yet one might argue that could be low compared to growth in the league. According to FanGraphs, the league's overall revenues have risen 650 percent since 1995, while salary growth has trailed behind—increasing only 378 percent. Baseball players' share of league revenues is lower than their pro basketball and football counterparts. This will be something to watch for in any future labor negotiations.

Compared to everything else, the faster-than-inflation rise in ticket prices seems tame in comparison to everything else above. Already considered expensive by most baseball fans, costs keep going up. According to a Team Marketing report of total fan costs to attend a game, the average annual increase has hovered around 2 percent the last few years.