Minor League Baseball Teams Are Desperate For Help During Pandemic
By Ken Reed
Minor league baseball teams, like millions of other small businesses in this country, are in trouble. Big trouble.
Unlike their Major League Baseball colleagues who typically get about half their revenue from media rights deals, minor league teams are almost exclusively reliant on ticket sales and in-stadium concession and merchandise revenues.
MLB teams could play without fans and still pull in a ton of revenue. (That said, MLB’s Arizona Plan, in which all games would be played in Arizona, primarily in spring training parks, or anything similar, seems totally unfeasible since it will only take one or two players contracting the COVID-19 virus on a given team to shut that team down for good. Then what, do they just drop out of the league? Is the World Series winner under the Arizona Plan the last team standing without a COVID-19 case on their roster or coaching staff?)
Minor league teams, on the other hand, simply don’t have anywhere near enough media dollars to survive without fans.
Minor league baseball grossed $864 million total for its 160 clubs last year. Operating expenses take 89% of that figure. Given approximately 12 home games a month, teams lose about 16% of their annual revenue with each month of lost games.
“Our entire business model is people coming to our stadium,” said Scott Hunsicker, GM of the Reading Fightin’ Phils.
“The concept of even playing a game in our stadium with no people is so far outside of our business model that it almost seems like a wasted effort to even ponder it.”
Yes, minor league teams can fight for some of the small business aid in the coronavirus stimulus package (although as of April 16, the money targeted for small businesses is already gone), but to survive this pandemic they are likely going to need help from their brethren in the Majors.
Revenue for Major League Baseball owners has skyrocketed during the past decade, due largely to dramatic increases in media income. According to Statista, a statistics website, Major League Baseball’s 30 teams generated around $9 billion in total revenue during the 2017 season, almost twice the revenue generated ten years prior, when total revenue was at $5.5 billion.
Moreover, MLB franchise values are also soaring. Strong revenue growth has had a large impact on the valuation of MLB franchises. By 2017, the average franchise value was estimated at $1.54 billion, a new high. Despite this strong financial picture, owners have traditionally refused to throw the minor leagues more than a few bones. Minor league player salaries have remained stagnant for a decade. And before the coronavirus pandemic hit, MLB owners were considering cutting 25% of minor league clubs, in order to stuff more money in their already overflowing pockets.
Many of the teams targeted for elimination have been stalwart cultural institutions in their towns for decades.
“Minor league baseball teams have had a major impact on small communities. These teams provide an enormous cultural and economic benefit to the communities they call home,” said Congressman David McKinley of West Virginia.
It’s true. Minor league baseball teams are part of Americana. And as long as Major League Baseball is enjoying the antitrust exemption our representatives have given them, they have a moral responsibility to do what’s best for all of baseball’s stakeholders in this country.
Major League Baseball owners need to climb up from behind their wallets and take a hard look at what’s best for the game in the big picture.
And that includes throwing a life raft to drowning minor league clubs in towns across the country.
— Ken Reed, Sports Policy Director, League of Fans
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Ken Reed appears on the Ralph Nader Radio Hour (at 38:35) to discuss his book The Sports Reformers: Working to Make the World of Sports a Better Place, and to talk about some current sports issues.
- League of Fans Sports Policy Director Ken Reed quoted in Washington Post column titled "What happened to P.E.? It’s losing ground in our push for academic improvement," by Jay Mathews
League of Fans is a sports reform project founded by Ralph Nader to fight for the higher principles of justice, fair play, equal opportunity and civil rights in sports; and to encourage safety and civic responsibility in sports industry and culture.
Vanderbilt Sport & Society - On The Ball with Andrew Maraniss with guest Ken Reed, Sports Policy Director for League of Fans and author of How We Can Save Sports: A Game Plan
Sports & Torts – Ken Reed, Sports Policy Director, League of Fans – at the American Museum of Tort Law
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