Baseball cash tree is ripe for picking

It was Gil Meche last winter. It could be Kyle Lohse this winter, or Carlos Silva, or Francisco Cordero. It certainly could be Alex Rodriguez.

Today is the first day free agents can sign with a new team. In the days and weeks to come, some player will sign a contract that appears so outrageous fans will shake their heads in amazement.

Meche was a relatively unknown and definitely undistinguished pitcher last winter, with a career record just above .500 and a career earned-run average just below 5.00. Then the Kansas City Royals lavished $55 million upon him, and all of a sudden fans wondered not only what the Royals were thinking but when this geyser of money erupted.

Baseball is awash in revenue, and you don’t have to take Scott Boras’ word for it. The commissioner, Bud Selig, would be more than happy to put a number on it for you: Baseball is a $6-billion industry.

Since owners and players last shut down the game, baseball’s annual gross revenue has increased fivefold, from $1.2 billion in 1994 to an estimated $6 billion this year.

“That number is the most dramatic manifestation of how popular the sport is,” Selig said. “That number is stunning.”

The players have shared in the spoils. Rodriguez, the game’s highest-paid player, made $27 million in base salary this year, and opted out of his contract in hopes of making more in free agency. The game’s highest-paid player in 1994 was Bobby Bonilla of the New York Mets, at $6.3 million.

The cancellation of the 1994 World Series did not, as fashionably predicted at the time, herald the death of baseball as a major American sport. Now, flush with bucks from online and international ventures unimaginable a decade ago, and from new ballparks that double as cash machines, baseball is within striking distance of the estimated $6.3 billion generated by the NFL this year.

“Baseball was not the national pastime, but past its time: That’s what everybody said,” Selig said. “I happen to believe the sport is as popular today as it’s ever been and as popular as any sport now.”

For the fourth consecutive season, baseball set an attendance record, in the major leagues and in the minor leagues. Interleague play has juiced attendance, with the surefire series -- Angels vs. Dodgers, New York Yankees vs. New York Mets, and so on -- booked into prime weekend spots.

The wild card has been wildly successful, not only in diversifying the playoff field and keeping fans interested once football season starts, but by accenting the power of the biggest draws in the game, the Yankees and Boston Red Sox.

The Yankees and Red Sox have made the playoffs together three times in the last five years; the Yankees have qualified every year since the 1994 strike. But no team repeated as a division champion this year, and no team has repeated as a World Series champion in seven years, a span in which parades have been held in honor of the Angels, Arizona Diamondbacks, Chicago White Sox, Florida Marlins and St. Louis Cardinals.

“There’s a general parity of belief -- not necessarily more parity,” said Boras, perhaps the most powerful agent in the game. “The Yankees and Red Sox are always winning, which I think is a good thing for the sport.

“You have your Goliaths. But you have a lot of Davids winning the World Series. That brings a ray of hope to a lot of people in the game.”

Whether fans followed games at the ballpark, on television, on radio or online, they spent billions of dollars. And corporations spent billions more to reach those fans.

“I think the game, overall, has taken good advantage of expanding economic opportunities,” said Donald Fehr, executive director of the players’ union.

In 2006, for instance, baseball generated $1.2 billion from luxury suites, advertising and sponsorships -- equivalent to total revenues in 1994.

Clubs hauled in corporate dollars in naming rights, to a ballpark or to a particular section of it. In renovations at Angel Stadium and in Dodger Stadium, and in new ballparks across the country, clubs converted their best seats to luxury boxes and suites, with fine dining and fax service and $400 tickets.

“There’s been a strong demand for corporate and premium seating, which has created a great deal of revenue,” Boras said. “Owners learned how to operate their ballparks -- 70% of the revenue comes from 30% of the seating.”

Revenues from traditional tickets and local broadcast rights have more than tripled since 1994. And, with the value of sports programming rising to national advertisers struggling to reach mass audiences amid the proliferation of cable and satellite channels, national broadcast rights have soared from $52 million to $935 million.

But the biggest eruptions from that geyser of money may be yet to come, as baseball expands its presence abroad and online. The jump in merchandising and licensing revenue from 1994 to 2006 was almost three times greater internationally than in the United States, and countries from Israel to Colombia are clamoring for entry into the second World Baseball Classic, scheduled for 2009.

“Ten years from now, you won’t recognize the sport worldwide,” Selig said. “It will be that quick. The World Baseball Classic was the first real foray into that, and it was so good.

“We’ve opened an office in Beijing. Israel is talking baseball now. We want to open up in Europe. We’re going to be very aggressive. It opens up horizons that don’t exist. It’s huge.”

The same is true for MLB Advanced Media (MLBAM), the hugely successful online arm of baseball. MLBAM generates hundreds of millions no one could envision a decade ago, running online operations in baseball and beyond, venturing into such areas as volleyball and music.

In baseball, team websites offer one-stop access to news, game updates, video and audio coverage, promotions and ticket and merchandise sales. Diamondbacks President Derrick Hall said his team sells eight out of 10 tickets online.

“I think we’ve only scratched the surface in terms of what MLBAM ultimately will become,” said Jeff Moorad, Diamondbacks chief executive.

The revenue revolution could be fueled by the marriage of international outreach and innovative technology, said Billy Beane, Oakland Athletics general manager.

“I can get it on my computer. People are going to be able to get it on their phones,” Beane said. “There are millions -- possibly billions -- of people on the other side of the world that have yet to pick their favorite team. They’re going to be able to pull up their cellphone some day and watch the Oakland A’s from Hong Kong.”

In addition to the money split evenly among 30 teams -- in jersey sales and online operations, for instance -- the teams that make the least money get welfare from the teams that make the most. This year’s revenue-sharing pool is a record $342 million, Selig said.

Fehr, the union chief, notes baseball has taken advantage of a strong economy over the last decade. But he also notes better management leads to more money.

“Do you remember when Seattle was a tiny-market club, and San Francisco, and Texas, and all those teams that could never draw and were terrible?” Fehr said. “It shows that, in most of those cases, there wasn’t anything intrinsic about the location. It had more to do with the way teams were being managed.”

The factor most fundamental in selling baseball is, of course, playing baseball. Since the 1994 strike, owners and players have twice negotiated a new collective bargaining agreement without either side threatening to shut down the game.

“A generation of fans was always holding their breath,” Beane said, “waiting for the next interruption.”

Selig cannot guarantee something as delicate as labor peace. Or can he?

“In the ‘70s and ‘80s and early ‘90s, clubs were fighting with each other,” he said. “Clubs were fighting with commissioners. The union and clubs were fighting. Players were fighting, owners fighting with owners.

“Just think how different it is. Those things don’t exist any more. And they won’t, as far as I’m concerned.”

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bill.shaikin@latimes.com

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(BEGIN TEXT OF INFOBOX)

TOP FREE AGENTS

Alex Rodriguez...infielder

Barry Bonds...outfielder

Mariano Rivera...reliever

Mike Lowell...infielder

Torii Hunter...outfielder

Andruw Jones...outfielder

Aaron Rowand...catcher

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Open market

Top free agents by position:

STARTING PITCHERS

Carlos Silva, Hiroki Kuroda, Livan Hernandez, Kyle Lohse, Freddy Garcia.

RELIEF PITCHERS

Mariano Rivera, Francisco Cordero, Scott Linebrink, Eric Gagne, Kerry Wood.

CATCHERS

Yorvit Torrealba, Michael Barrett,

Paul Lo Duca.

FIRST BASEMEN

Sean Casey, Tony Clark, Doug Mientkiewicz.

SECOND BASEMEN

Luis Castillo, Tadahito Iguchi, Kazuo Matsui.

SHORTSTOPS

Alex Rodriguez, David Eckstein, Neifi Perez.

THIRD BASEMEN

Alex Rodriguez, Mike Lowell, Pedro Feliz.

LEFT FIELDERS

Barry Bonds, Shannon Stewart, Luis

Gonzalez.

CENTER FIELDERS

Torii Hunter, Andruw Jones, Aaron Rowand.

RIGHT FIELDERS

Kosuke Fukudome, Jose Guillen,

Milton Bradley.

DESIGNATED HITTERS

Mike Piazza, Sammy Sosa, Mike Sweeney.

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Growth spurt

How baseball’s revenue has increased from 1994, the year the World Series was canceled, to 2006 (figures for 2007 are not yet available; figures in millions):

*--* 1994 2006 National broadcasts 52 935 Domestic merchandising and licensing 93 207 International merchandising and licensing 18 105 MLB.com 0 317 Other national revenue* 35 34 Ticket sales 513 1,933 Local broadcasts 248 837 Other local revenue** 284 1,212 Total gross operating revenue 1.24 billion 5.58 billion *--*

* -- Includes All-Star game revenue, royalty payments from minor leagues, miscellaneous items

** -- Includes luxury seating, sponsorships, advertisements.

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Source: Major League Baseball