Minor league baseball teams might be out
As the 30 MLB team owners and the players union bicker over how to divvy up the revenue in a potential 2020 season, at least they are projecting to have some cash hitting the books.
Ticket revenue and concessions accounted for 30-40 percent of the $10.7 billion MLB made last season, and teams won't have that this season. But revenue of local TV contracts, even if prorated, and the windfall from the national TV deal, especially the postseason piece, remain as revenue streams.
The owners of minor-league teams, however, have almost no revenue streams beyond the turnstiles and concession and souvenir stands. More than 160 revenue-generating affiliated clubs in North America have invested in the 2020 season over the winter, and are now wondering if they will get any return.
If fans can't attend their ballparks because of the threat of COVID-19, the clubs would rather not have a season. Ballparks sat empty across the country this Memorial Day weekend, often a solid money-making date for minor-league teams.
One of them is the Texas Rangers' Double A affiliate, the Frisco RoughRiders, one of the most valuable franchises in minor-league baseball. But there isn't one minor-league franchise, no matter how successful in past seasons, than isn't hurting amid the coronavirus pandemic.
"It's indescribably challenging," Frisco general partner/CEO Chuck Greenberg said. "We go through the entire offseason incurring expenses, paying our staff and making various investments in anticipation of the upcoming season. Under any circumstances it would be difficult, but the timing (to suspend the season so close to the start of season) made it far more acutely so."
Minor-league teams don't control who plays for them or who their coaches are, and they don't pay their salaries or for their equipment. But MLB organizations don't pay to operate the games, unless they own their affiliates.
The Rangers own High A Down East and Low A Hickory, but Triple A Nashville and Short-Season A Spokane are independently owned along with Frisco.
Also hanging over some minor-league franchises is MLB's plan to reportedly contract 42 affiliates. The short-season teams will take the brunt of that, and Greenberg owns the short-season State College Spikes in the New York-Penn League.
The goal of contracting to four affiliates for each team, MLB commissioner Rob Manfred said, is to ensure quality facilities for players, reduce travel and help minimize costs. MLB and Minor League Baseball have floated the idea of giving contracted franchises a chance to operate teams in leagues for undrafted players or minor-league free agents.
"There have been no agreements on contraction or any other issues," MiLB said in a statement last month. "MiLB looks forward to continuing the good faith negotiations with MLB tomorrow as we work toward an agreement that best ensures the future of professional baseball throughout the United States and Canada."
While there was buzz around the topic last month, generated by a Baseball America report, Greenberg is in the dark on this aspect as well. Baseball America said Wednesday that MLB will likely give MiLB a list of the 120 franchise it wants to remain as affiliates.
Unfortunately, the coronavirus might take care of some of the issue on its own. "It's hard to know how things will go given the virus," Greenberg said.
The RoughRiders have led all of Double A baseball in attendance the past 15 seasons. They drew 455,765 fans in 2019, and their top-10 all-time single-game crowds have come since the Greenberg Sports Group's first full season as owners in 2015.
Greenberg, who also has the High A Myrtle Beach Pelicans in his portfolio, said that all 38 full-time Frisco employees are still receiving paychecks. Even though the expectation is the minor-league season will be canceled, Frisco is still preparing for a season.
Greenberg said Frisco received government assistance that was good for two months' worth of payroll. While grateful to have it, the funds were only a Band-Aid over a much larger financial scar because Frisco is a seasonal business.
Frisco has also started booking events at Dr Pepper Ballpark, which is owned by the city, to at least generate some revenue.
The RoughRiders are hosting a 5K run, The Home Run, which participants will run at home. (Proceeds will help support the North Texas Food Bank.) And Frisco merchandise can be had at discount prices.
"I'm proud of the fact that far we haven't laid anybody off, we haven't cut anybody's wages, and we're doing the best we can to be productive as a unit," Greenberg said. "But it becomes increasingly challenging and there's increasingly little that can be accomplished.
"So, right now we're in wait-and-see mode about whether we're going to play, and we're looking at every means possible of utilizing the ballpark for other events to create some active revenue streams but also as a community asset."
More bad news is that seasonal and game-day employees, as many as 400 of them, are missing out on paychecks, and that has a negative trickle-down effect on businesses in the community that are already hurting.
"We feel for them and their families and wish there was more we could do to help," said Greenberg, the Rangers' general partner from 2010-2012. "But we're just completely stymied."
The best-case scenario at this point is for some kind of season, with fans socially distanced. With capacity for more than 10,000 people, Dr Pepper Ballpark is larger than the average minor-league facility and has restrooms and concessions spread throughout the ballpark.
If there isn't a season, Greenberg said the best-case scenario is the development of a coronavirus vaccine before next season is scheduled to begin. Families will want a fun and affordable activity, and that's what minor-league baseball is all about.
Right now, though, times are tough.
"We just have to wait and be prepared for anything," Greenberg said. "And hope for the best."