Steroid scandal threatens to end MLB's zeitgeist

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After enjoying unprecedented popularity the last three years, Major League Baseball will begin the 2005 season with a controversy that could blight everything from sponsorship deals to TV contracts.

What were once rumors-and denials-that enabled baseball to fend off a public-relations hit are now apparently truths. According to the San Francisco Chronicle, two of the game's premier players testified to a federal grand jury investigating the Bay Area Laboratory Co-Operative (Balco) that they used steroids.

Barry Bonds of the San Francisco Giants, named the Most Valuable Player in the National League for a record seventh time this past season, testified he used a cream and a clear substance provided by Balco, but said he didn't know they were steroids. Jason Giambi of the New York Yankees testified he knowingly took steroids and human growth hormone, also provided by Balco, for three seasons.

Major League Baseball did not return a call for comment. But a team president from one of the league's 30 franchises, who agreed to speak to Advertising Age on the condition of anonymity, said he was apprehensive.

`an image problem'

"We were definitely on a roll," he said. "Now we have to be concerned about an image problem, and when you have an image problem you end up with a whole host of other issues. Now your [corporate] sponsors, your television partners, people who do business with the league might wonder if they should continue doing business with the league."

Baseball was experiencing an unprecedented surge in popularity the past few seasons. It laid the groundwork in August of 2002, when owners and the players hammered out a new collective-bargaining agreement that avoided what would have been the ninth in-season work stoppage in the last 30 years.

In 2003, the sport received phenomenal TV ratings for a postseason that included riveting league championship series involving the perennial sad-sack Chicago Cubs and Boston Red Sox. This past season, the Red Sox finally won their first World Series since 1918-with ratings up 23% over the 2003 Series-and, overall, Major League Baseball shattered its own attendance record with more than 73 million paying customers.

Quietly, MLB officials were hoping to use those numbers in a bid to garner better media deals in its upcoming negotiations. Baseball has two years left on the $3.35 billion contract it signed with News Corp.'s Fox and Walt Disney Co.'s ESPN in 2001.

see what happens

"I would say that it would be more later than sooner when we sit down to renegotiate," a network executive said. "I think, obviously, you want to sit back and see what happens in 2005, see if the fans still come out at record numbers, see if they embrace Barry Bonds."

Mr. Bonds was just starting to emerge as a strong endorser. He and Hank Aaron, baseball's all-time home run king, did a humorous, well-received commercial for Charles Schwab that appeared on the telecast of the 2002 Super Bowl.

But it remains to be seen now if marketers-and even Major League Baseball itself-will continue to embrace Mr. Bonds as he heads toward Mr. Aaron's mark, the most hallowed record in baseball. Mr. Bonds will pass Babe Ruth's 714 home runs some time in late April or early May, and has a chance to catch Mr. Aaron's 755 home runs by the end of the 2005 season.

Sports-marketing expert David Carter said that, ultimately, it will be the fans who set the agenda.

"Until the steroid issue compromises the way people feel, it won't sway the sponsors or the broadcasters," he said. "Where there is no outrage, there is no financial impact. The majority of fans may believe these guys are indeed on steroids, but they're also taking a `Who cares?' kind of attitude."

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