MLB Has Awarded Teams International Marketing Rights, Similar to NFL

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Major League Baseball is dividing up international markets among its franchises, giving teams new commercial rights in specific areas around the globe, according to multiple people familiar with the plan.

In a process similar to one undertaken last year by the NFL, each MLB team was invited to submit proposals for up to three international markets where they’d like to be able to ink sponsorship deals or host fan events, said the people, who were granted anonymity because the details are private. The league collected those proposals in January and approved them shortly afterward.

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The plan is designed to help MLB capitalize on the global popularity of baseball, while utilizing the resources, manpower and brand strength of individual teams. Some franchises have more resources than others, and some teams may have more relevance in specific markets by virtue of geography or roster make-up. The Houston Astros, for example, might be interested in obtaining additional rights in Venezuela to capitalize on the popularity of 2017 American League MVP Jose Altuve.

“Everyone has different parts of the globe that they’re interested in,” MLB chief revenue officer Noah Garden said in an interview. “So we decided to test it by allowing each club to go after those areas to generate more business or get new partners.”

Some of MLB’s most mature international markets, like Japan and South Korea, were withheld from the program because there are already a number of partners there with league-wide rights, said one of the people. It’s unclear exactly which teams received rights in which specific areas.

International growth is a priority for all major U.S. leagues, and baseball’s popularity gives it a stepping stone into a handful of markets. Baseball and softball are played by an estimated 65 million people globally, according to their international governing body, with concentrations in parts of Asia, Europe and South/Central America.

In the past decade, the league has played games in Puerto Rico, Mexico, the U.K., Japan and Australia, and such games will come with increased frequency in the coming years. MLB, which has five international offices, was also a partner in the World Baseball Classic, slated to return in 2023.

The new rights were deliberately awarded around the time MLB teams were given the go-ahead to start selling ad space on their jerseys. In other sports, jersey patches have attracted a number of international companies. MLB teams can now ink partnerships with foreign companies that also include rights to promote that tie-up in the company’s home market.

Under prior league rules, MLB centrally controlled international business opportunities. Every team has its own exclusive commercial footprint—which varies in size by team—but were heavily restricted in commercial deals outside that home area. A team could be sponsored by a Dominican company inside its local market, but couldn’t open a team store or hold fan events in the Dominican Republic.

Last year the NFL ran a slightly more complex process to grant international rights to its teams. NFL clubs were invited to submit detailed five-year marketing plans for how they would approach foreign markets, after which the league assigned exclusive or co-exclusive rights.

In December, the NFL assigned 26 different foreign markets to a group of 18 participating teams. Nine clubs were given rights in Mexico, six in the U.K. and four in Germany. Revenue generated by those teams in those markets will be shared across the league, but at a lower percentage than ticket revenue—the original planned called for 20% of gross revenue over $1 million, starting in the program’s third year.

The MLB plan also covers just a handful of years at the start. Revenue generated by MLB clubs in their international markets will be treated the same as revenue generated in their home market, according to one of the people.

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