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For Love of the Game: Baseball Business Thrives Despite Setbacks

Steroids, labor disputes, the dilution of talent, a deep divide between the haves and the have-nots: Major League Baseball, despite all its missteps, has proven to be the nuclear cockroach of pro sports -- it just won't die.

In fact, as a business, these might be baseball's headiest of times.

And Tuesday in San Francisco, the national pastime will revel in its resilience as it celebrates the 78th All-Star Game at AT&T Park, a relatively new venue that captures all that's right with the game and is also home to its darkest cloud.

"Baseball continues to financially hit the cover off the ball," said Maury Brown, a sports business analyst who runs the Business of Sports Network. "Revenues are at an all-time high, as are attendance figures. When coupled with two consecutive labor agreements being reached without a work stoppage, MLB is at its rosiest point ever."

Rosy, and practically printing money.

In 2006, more than 76 million fans bought tickets, up 1.5% from the prior year. In 2007, attendance is on track to break records for the fourth year in a row.

Commissioner Bud Selig claims MLB saw $5.2 billion in revenue last year, four times the amount tallied 14 years earlier, amid welcomed labor peace and revenue sharing that has the small-market guys thinking they can play ball with the New York Yankees.

All this while one of the sports world's most hallowed records is about to fall into the hands of Barry Bonds, who has been caught up in the investigation into steroid use in baseball and implicated as a user himself by some publications.

Muscle-ball woes

That the fans still voted Bonds in, just barely, as the oldest starting All-Star speaks loudly against the perception that he has become baseball's pariah, the illegitimate heir to Hank Aaron's home-run throne and eventual catalyst for another fan exodus.

"The steroid issue isn't going away, but it will be managed and massaged effectively, even if more ugly bits of news come out," said Andrew Zimbalist, economics professor at Smith College and author of "In the Best Interests of Baseball?"

"Fans factored the steroids controversy into this season and they still came out and filled the seats," Zimbalist added. "The predominant gestalt is that Barry hasn't been convicted and even if he was doing it, then so be it -- he's still accomplished remarkable things."

The last time fans fled the game in droves dates back to 1994, when a rift between the players and the owners led to baseball becoming the first professional sport to cancel its entire postseason, including the World Series.

The strike cost owners and players an estimated $1 billion, but the extent of the damage to the game couldn't be measured in mere dollars and cents. Fans, sickened over rich guys arguing about how to get a bigger slice of the pie, had seen enough.

Baseball was in big trouble.

By 1996, attendance was down 15% from the year before the strike and television ratings had plunged. Before the recent resurgence, attendance was still down in 2003 vs. a decade earlier. Baseball was no longer a growth business, to the point where Selig was even considering the unthinkable: Contraction by eliminating teams in Minnesota and Montreal.

Four years and record attendance results later, that forgettable era now seems a distant memory, thanks in large part to an historic slug-off between Sammy Sosa and Mark McGwire, the fall and rise of the beloved/dreaded Yankees, the fairytale Boston Red Sox World Series win and an appealing cast of young superstars.

Beyond borders

Meanwhile, sharpening its focus on foreign markets is one key to MLB's growth trajectory. Baseball is looking to further cash in on the global approach that has paid huge dividends for the NBA, where about half of the world champion San Antonio Spurs were born abroad and teams across the league are looking more like the United Nations.

"The internationalization of baseball is going remarkably well," Zimbalist said.

At the start of this season, almost 30% of all major league players on opening day rosters were born outside the U.S., up from about 27% a year earlier. The Dominican Republic claimed the highest number while marquee Asian imports were also on the rise.

"MLB is making strong ties in China, and Japan is really gung ho about American baseball; so much so that the Nippon Professional Baseball league is seen more and more as a feeder minor league system for the Big Leagues," he added.

The NPB's Daisuke Matsuzaka, following in the footsteps of MLB stars Hideki Matsui and Ichiro Suzuki, became the priciest transplant ever in the off season, costing the Boston Red Sox somewhere in the ballpark of $100 million.

While it's hard to say any player, or human being for that matter, would ever be worth that kind of money, Matsuzaka has disappointed neither fans nor the bean counters, immediately taking his place among the game's elite in wins and strikeouts.

He won't be toeing the mound at AT&T this year, but he didn't miss by much.

As for the big game ...

Basketball's All-Star exercise is fun enough, but it's really just a cartoonish display of no-look bounce passes and matador defenses.

Then there's the NFL's annual fiasco, which takes place after the real season is over and deserves about as much attention from hardcore football fans as the Oxygen network.

Baseball, however, has always been different. More relevant for some reason.

All-Star moments like Pete Rose almost decapitating Ray Fosse at home plate in 1970 and Bo Jackson's statement debut in 1989, in which he hit a monster home run, stole a base and garnered MVP honors, have certainly helped put the game in a different class.

But even baseball's upcoming midseason gala is losing much of its punch. Detractors say interleague play has taken away from the novelty of top sluggers from one league facing the other league's best pitcher. Free agency deserves some of that blame as well, with players bouncing from team to team and league to league.

It's also much easier to tune into the big-name players during the regular season thanks to cable television. No need to wait until the All-Star game rolls around.

As for the winning league getting home-field advantage in the World Series, that's a gimmick that just hasn't seemed to strike much of a chord with the average baseball fan.

There's also a bad taste lingering from the 2002 debacle, when Selig called the game a 7-7 tie after both managers ran out of pitchers by the 11th inning.

Still, there are plenty of reasons to tune in this year: Kayaker's crowding McCovey Cove awaiting All-Star splash hits. San Francisco's summertime fog. The Senior Circuit's attempt at ending its 10-year winless streak. And most of all, it could very well mark the final All-Star appearance for baseball's greatest home run hitter. And greatest villain.

Copyright (c) 2007 MarketWatch, Inc.

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