Tuesday, March 23, 2004
Baseball's Internet Business May Go Public
Richard Sandomir of the New York Times reports that MLB Advanced Media, the entity which runs MLB.com and controls baseball's Internet rights, could raise several hundred million dollars for the clubs by selling a minority interest to the public.
After incurring about $70 million of startup costs, MLB Advanced Media is now operating at a profit on revenues of approximately $91 million in 2003. Several insiders say that MLBAM has been independently valued at $1 billion, though at least one outside analyst believes that figure is too high.
A conspiracy theorist might note that if the public offering is postponed until 2006, MLB might be able to use the proceeds to finance the contraction of two teams after the season, as authorized by the CBA. Certainly this means of financing contraction would be more popular among the owners than any plan that took the money from ordinary income streams.
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Richard Sandomir of the New York Times reports that MLB Advanced Media, the entity which runs MLB.com and controls baseball's Internet rights, could raise several hundred million dollars for the clubs by selling a minority interest to the public.
After incurring about $70 million of startup costs, MLB Advanced Media is now operating at a profit on revenues of approximately $91 million in 2003. Several insiders say that MLBAM has been independently valued at $1 billion, though at least one outside analyst believes that figure is too high.
A conspiracy theorist might note that if the public offering is postponed until 2006, MLB might be able to use the proceeds to finance the contraction of two teams after the season, as authorized by the CBA. Certainly this means of financing contraction would be more popular among the owners than any plan that took the money from ordinary income streams.
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