The 2023 season kicks off a new era for Major League Baseball. Teams can now sell advertising to be put on their uniforms and the Cincinnati Reds have inked a deal with Kroger, who will now have a patch on the uniform of the Reds. For their part the Reds will be able to cash a $5,000,000 check each year according to Terry Lefton of the Sports Business Journal. For a comparison, the San Diego Padres announced a deal with Motorola that was worth $10,000,000 per season. The Boston Red Sox have a deal with Mass Mutual for $17,000,000 a season for the next decade, and there are bonuses that could push it to $20,000,000 a year.
The length of the deal for the Reds and Kroger was not in the report. Kroger has been a sponsor/advertiser with the Reds for the last 69 years, so it’s no surprise that they were interested in throwing their logo on the jersey.
In today’s game $5M doesn’t go a long way, but it’s also not nothing. That’s enough to sign a solid reliever or a good bench player. That and a little extra could get you a starter. It’s just another piece of the pie. Last year Major League Baseball had an all-time high with $11,000,000,000 in revenue. There’s a ton of national broadcast money that’s split up evenly between teams. And the local revenues (which includes local tv deals) has some revenue sharing, too. Every little bit coming in counts and teams are finding more and more ways to have these smaller, but not insignificant ways to bring in additional revenue. New gambling partnerships and jersey patches have been added in just the last two seasons. The Reds now play in a state that you can legally gamble on sports in and have installed the Bet MGM Sportsbook at the Wings and Rings Machine Room (two sponsorships for one place – what a deal!) at Great American Ballpark. That’s yet another way the team can and does generate revenue that didn’t exist just a few years ago.
“In today’s game $5M doesn’t go a long way, but it’s also not nothing. That’s enough to sign a solid reliever or a good bench player. That and a little extra could get you a starter”.
Or maybe another Big Bob vacation home? 🙂
Yep
NASCAR , here we come, as there is no other way to pay Ten million a year to .250 hitting stiffs
Are you hitting 250 at major league level? Gonna say no
I wouldn’t care if they load that whole uniform up like a NASCAR driver if they would put it into players that could get us into the playoffs. Instead they would pay these limited partners that want to see a profit. Baseball and pro sports in general was more fun to watch before free agency. ‘Nuff said.
It will go into the owners pockets
So… other teams are getting double what the Reds get for an ad patch.
…fleeced again. ?
If you were a company trying to advertise your brand are you paying more for a team with very little “highlight” exposure and a team that on a good night will get 45,000 viewers in the greater Cincinnati area with almost no national game opportunities (be that national regular season broadcasts or the playoffs), or are you going to pay more for a team full of superstars with plenty of national broadcasts who are also likely to be featured on national TV and social media highlight-type stuff?
When you don’t try to be good, you have to take these kinds of deals that are way lower than other teams who are going to be seen more because they’ve got players that people want to actually see and who will provide highlights.
As fans, when we read about additional revenue like this, we automatically think it will be used to sign a fifth starter, or as the article suggest, a bullpen arm.
I would be very surprised, if Bob and Phil, see this new revenue stream as an opportunity to increase payroll.
But hey this is Cincinnati, where you can lose 100 games, do next to nothing to improve the team in the off-season and still get a C+ grade.
My thoughts exactly Doug.
This is likely a multi-year deal, with this year’s projected team having little impact on the valuation. The valuation of the deal will be driven much more by the Red’s market size. The Padres (cited in the article) are reaping the benefits of a prolonged rebuild where they accumulated prospects that are now paying huge dividends. Prior to 2020, they only eclipsed the $100M payroll mark once (2015) when they tried to buy success through the FA market. Part of the reason they can spend as they have over the last couple of years is that they saved money during their rebuild.
The story here is that the long-term implication of the patches will widen the gap between the large and small market clubs.
Hit the nail on the head with don’t try.
Should have been easy to get 15mm for a patch considering 60 games will be televised in a larger market.
But I imagine 5MM is all they wanted.
If you have ever visited San Diego the price of a hotel or motel room is double. It has a lot to do with the Economics of the regional business base.
I feel better now that Big Bob and Phil can finally afford a couple of Big Macs. That just might be enough so they don’t have to stand out in front of Great American with their tin cups this year.
All joking aside, I’m pretty sure it was you, Doug, that put together a rough estimate of what the teams brings in. Of course, it doesn’t tell us what the expenditures are, but I would be curious if anyone has a rough idea what the updated numbers look like this year.
While the NASCAR type advertising is no doubt tacky, the bigger concern to me is MLB getting in bed with gambling interests.
Questions are all ready being raised about the NFL’s integrity. Take a look at the Conference Championship games this past weekend and you will see the reasons for the concern.
It will only be a matter of time before these same type of questions will be raised about Major League Baseball. MLB learned a very hard lesson, in this regard, a century ago.
Gambling is a billion dollar industry. When that much money is involved, there will always be attempts to rig the system. Baseball should have nothing to do with gambling legal or otherwise.
Yeah, sports betting and the gaming/gambling business. I don’t see this ending well, at all for professional sports.
Absolutely. With that kind of money it’s just too tempting for refs, players, etc, etc. Hard to imagine their not being problems with this, and yes, the AFC Championship was a prime example of at least the hint of problems.
I would think a smart company such as Kroger would pay $5 million to keep its logo off of this team’s uniforms.
Valid point Jim. Usually, companies want to be associated with other successful organizations. The Red’s brand has seen better days.
Where’s Hudepohl? Hudepohl and the Reds go back a long way.
Joe Nuxhall was always talking about having a Hudy. And I think Joe would polish off about 10 or 12 a game.
I’d much prefer the Burger Beer Baseball Network and Waite Hoyt along with a Hudy than gambling and MLB. How easy the saga of 1919 has been pushed aside.
TR, remember many years ago being a kid hearing a vendor at Crosley Field yelling “get moody with Hudy”. Also listened to Waite call home runs hit into Burgerville.
I wish I had the misfortune of living the Castellini’s poverty stricken lifestyle. It’s so stressful figuring out where to spend all that money and yet constantly wanting more.
I recall Marge Schott said she had lost $60 million between 1991 and 1995. Which is why they cut pay roll in 1996, and she was pretty sore about not selling out the playoffs in 1995 (beat the Dodgers, lost to Atlanta, who won the World Series), and the strike – shortened 1994 season.
I have no idea how much Bob and the other partners “make” on the Reds, and how much they are willing to gamble on signing expensive free agents. I think the Reds lost a lot of money in 2020, and that is etched in Bob’s mind.
But my continuing refrain is that the Reds’ organization is dumb; baseball dumb. They are trying to run the team the same way teams were run 25 or more years ago; a legacy of Bob listening to Walt Jocketty. The Cardinals got rid of Jocketty because he was determined to run the team the way he had run it for years, and the analytics guys persuaded the ownership that he was wrong. And…I think they were right.
The game has changed, but the Reds’ are stuck in the past.
Yes, baseball has changed, for the worse. And it will change again once people recognize that analytics isn’t a winning strategy. It’s like technical analysis in the stock market, you might get lucky once in a while, but if everyone’s doing it, you’ll likely lose.
Not sure the article has an accurate title. I don’t expect the Reds organization to see any of these funds… it’ll skip straight through the checkbook and into Bob’s wallet so fast it won’t even make an impression, just like so many other guaranteed payments that Phil disparages but is happy to cash.
At the end of the 2019 season, the Reds had a pair of young bats (Senzel & Winker) who many thought were coming into their prime. And Suarez coming off a 131 OPS+ campaign. Not to mention Aquino was coming off that absurd HR stretch.
They had traded for Puig that summer, added Galvis, and in the offseason signed Castellanos, Shogo, and overpaid for Moose.
They also had a solid rotation with Castillo, Gray, Disco, and a young Mahle coming into his own. Plus they signed Miley for the back end of the rotation.
By all indicators, they were trying to win. They spent a bunch of $$$ and many thought they had built up the roster to compete.
But the lineup took a huge step back. Moose, Votto, Senzel, Shogo, and Suarez all under-performed, and their standard starting 9 hit a combined 0.224 that season.
Then they got swept in the first round, because they hit 0.169 in the playoffs, and after having overpaid for a very brief run at relevance, they dismantled the whole thing.
I think this showed the current management wants to win, but (hopefully) learned you can’t be stupid about it. You don’t overpay for subpar hitters, and trade away top prospects for players with minimal team control remaining, who you can’t re-sign.
I’d like to think the Kroger $ is going into the coffers for a future run, but we can probably all correctly assume it’s just being banked by ownership.
5 million?! Think of all the players they can sign now to minor league deals and invites to spring training.
Bill J, I remember the Get Moody With A Hudy guy, saw him numerous times. And listening to Waite Hoyt was a wonderful way to grow up.
And now batting for Skyline Chili Joey Votto, and now batting for Graeters Ice Cream Tyler Stephenson, and now batting for Wester-Southern Life Ins Will Myers, and now batting for, Good Samaritan Hospital Nick Senzel, and now…..Well you get the idea.
Another revenue stream for MLB teams that will put us further behind the mega market teams.
Makes great sense because Kroger can now provide the bags for fans to put over their heads at GABP.
haha Paper bags with KROGER in big letters. haha Great advertisement. lol