COVID-19 and MLB’s reopening plan could put minor league teams out of business
Baseball could be back by the Fourth of July under a plan to start a shortened big league season without fans, but it might be gone forever in some cities and towns that make up the game’s sprawling minor league system.
While Major League Baseball and its players quarrel over how to split billions in reduced revenue dollars under a return-to-play proposal, minor league teams face even starker economic realities due to the coronavirus pandemic. From the Pacific Coast to Portland, Maine, the business of minor league baseball churns on ticket sales, in-game advertisements and game revenues like popcorn and pretzel sales.
One of Minor League Baseball’s highest-ranking officials said some teams probably would not survive a summer-long shutdown if the 2020 season is canceled due to restrictions on live-audience sporting events.
“I think it’s probably fair to assume that,” said Jeff Lantz, MiLB’s senior director of communications. “Even in a good year without rainouts, we have teams that will make less than $100,000 in a year, and certainly there are some that don’t make money each year. Those teams are really going to have a hard time here.”
California Gov. Gavin Newsom said Monday professional sporting events could return without spectators in early June, but Lantz said that isn’t a viable option for minor league teams.
“With our business model, it’s really a nonstarter,” Lantz said. “Our teams need the gates open and (people) in seats with a beer in one hand and a hot dog in the other, just to survive. If we play games but don’t open the gates, that’s zero revenue. It’s just not feasible with our business model.”
Major League Baseball’s business model is much bigger and broader.
Major league owners have approved a plan for an 82-game season, but the Major League Baseball Players Association is pushing back on a proposed 50-50 revenue split. MLB generated a record $10.7 billion in gross revenues in 2019, according to Forbes. ESPN reported Major League Baseball brings in $2.2 billion to $2.5 billion in local television revenues and another $1.7 billion in national television money.
Big league teams seemingly believe they can afford to play games in empty stadiums until COVID-19 restrictions are lifted, but Minor League Baseball doesn’t have the backing of multibillion-dollar television and merchandise deals.
River Cats ‘taking every precaution’
River Cats general manager Chip Maxson sounded this alarm in late April when he told The Sacramento Bee he feared some minor league teams might not survive the shutdown. The River Cats had already laid off two-thirds of their full-time staff and reduced hours for those who remained.
“If there are no games in 2020, the time between games at Sutter Health Park will be more than 18 months,” Maxson said. “We are trying to operate as lean and as efficient as possible, but the reality is that no business is set up to go 18 months without revenue.”
The River Cats, the reigning Triple-A national champions, have led minor league baseball in attendance nine times in 20 seasons at their waterfront ballpark in West Sacramento.
“I would consider the River Cats to be one of the model franchises in minor league baseball, and I think I read somewhere they’ve laid off well over half of their staff,” Lantz said. “They know their business better than anybody, so obviously they’re taking every precaution so they don’t have to make a real terrible decision down the road.”
Contraction talks
In many cities, the COVID-19 crisis isn’t the only threat to minor league baseball.
Major League Baseball wants to cut the number of affiliated minor league teams from 160 to 120 under a new Professional Baseball Agreement.
Baseball America reported that major league teams want greater control over choosing their player-development affiliations with attention to shortening travel and improving the geographic configurations of leagues. Minor League Baseball has resisted the idea of slashing dozens of major league affiliations.
Baseball America and The Associated Press reported minor league officials were ready to accept those terms when the two sides met in April, but Minor League Baseball called those reports “largely inaccurate,” saying “there have been no agreements on contraction or any other issue.”
Earlier this month, U.S. Sen. Steve Daines of Montana sent a letter to MLB Commissioner Rob Manfred and Minor League Baseball President Pat O’Conner requesting a two-year extension to the current PBA, which expires in September. Daines urged baseball to maintain existing minor league affiliations until the impacts of the public health crisis are more fully understood.
Pacific Coast League
Pacific Coast League President Branch Rickey and California League President Charlie Blaney both referred questions to Lantz.
“As we are in talks with MLB about extending the Professional Baseball Agreement on all levels of Minor League Baseball, it can be conflicting to have the various leagues and teams each responding separately,” Rickey said in an email to The Bee.
The Triple-A Pacific Coast League has never canceled a season since its inception in 1903, although the 1918 season was suspended on July 14 because of World War I travel restrictions.
The PCL is made up of 16 teams across 11 states from Sacramento to Nashville, Tenn., and from Tacoma, Wash., to San Antonio, Texas. California has two teams: the River Cats and the Fresno Grizzlies. Baseball America reported the PCL could be reduced from 16 teams to 10 teams under the new PBA. The Fresno Grizzlies franchise has reportedly been discussed as a candidate to be reclassified to the Class-A California League.
California League
The California League was founded in 1941. The league suspended operations from 1942 to 1945 during World War II, but it has returned each summer for the past 74 years.
The league consists of eight teams. The North Division includes the Modesto Nuts, San Jose Giants, Stockton Ports and Visalia Rawhide. The South Division includes the Inland Empire 66ers, Lake Elsinore Storm, Lancaster JetHawks and Rancho Cucamonga Quakes.
Many of baseball’s all-time greats have come through the California League during their rise to the majors. The California League Hall of Fame includes Don Drysdale, Rickey Henderson, Reggie Jackson, George Brett, Ken Griffey Jr., Tony LaRussa, Kirby Puckett and Pedro Martinez.
The California League is considered safe under new PBA proposals, but Lancaster has been identified as a candidate for contraction.
