Affiliated Minor League Baseball (“MiLB”) is vital to local economies across the country, driving revenue and economic growth and serving as pillars of the community for decades or, in some cases, more than a century.
MiLB is the most affordable and family friendly professional sport. In 2019, the price for a family of four to park, enjoy a game and eat a full meal was only $69.
MiLB is essential for local businesses—many nearby businesses are built around ballpark traffic and MiLB Clubs are key customers of local suppliers and vendors. This is especially true for local hotels, gas stations, restaurants and bars, all of whom thrive during baseball season.
Prior to the pandemic, MiLB drew over 40 million fans per season for 15 consecutive years.
Over 81% of the United States population lives in a market with at least one MiLB Club.
MiLB Clubs are tremendous community assets, collectively donating and/or raising over $50 million in charitable funds annually.
MiLB Clubs directly generate and pay over $50 million annually in state and local taxes.
MiLB Clubs are the primary tenant in state- and municipally-owned facilities that anchor downtowns, putting those facilities (and their taxpayers) at risk. A majority of Clubs have had to delay, defer, or have lease payments waived during the pandemic.
Pre-pandemic, MiLB Clubs employed more than 3,300 full-time employees and nearly 32,000 part-time and seasonal employees. Even as ballparks re-open, Clubs have been unable to resume pre-pandemic employment numbers due to lack of financial means. Federal relief would allow clubs to immediately return to full staffing levels.
Ongoing Impact of the COVID-19 Pandemic on MiLB
MiLB Clubs were not just slowed down, but completely shut down by the pandemic. MiLB not only lost its entire 2020 season, but went more than 20 months without hosting a single game. The average MiLB Club lost more than 90% of its revenue from 2019 to 2020 and PPP was not designed to save an industry like ours with massive revenue loss for nearly two years.
COVID hit at the worst possible time for Minor League Baseball – just before the MiLB season – so MiLB Clubs were not able to cut expenses meaningfully and suffered the full brunt of the loss. Had the pandemic arrived earlier, clubs could have saved on costs (as teams in sports with later-starting seasons were able to do). Had the pandemic arrived later, Clubs could have played a portion of their seasons and generated at least some revenue (as teams with earlier-starting seasons or venues that are not as seasonal were able to do).
MiLB clubs made the full investment in the 2020 season, employing staff, incurring overhead (healthcare, rent, utilities, insurance, etc.), purchasing merchandise and promotional-items, printing brochures and schedules and spending on marketing and advertising—all in anticipation of a season (and revenue) that never materialized.
MiLB Clubs also have significant fixed costs (mostly related to facilities) that have not abated during the pandemic.
Two-thirds of Clubs took on additional debt to survive the pandemic (with an average increase of over $1.25 million). Absent financial relief, nearly 75% of Clubs will need to take on even more debt, which is further complicated by the fact that nearly one-third of MiLB Clubs are currently in violation of their loan covenants.
Though MiLB Clubs have resumed play, they will continue to lose money throughout 2021 and remain at severe financial risk.
Clubs expect to generate only about half of the revenue of a normal season. As a result of the season starting a month late, MiLB Clubs are playing twenty fewer games in 2021. Moreover, those games that are being played are done so with government-mandated reduced capacities.
Clubs will bear increased costs in 2021 due to the significant added costs of making ballparks COVID safe and operating while the pandemic is still a risk.
Clubs have already spent more than 35% of the revenue they will receive in 2021, creating a risk of financial failure. Many ticketholders and corporate partners agreed to put payments for the 2020 season toward the 2021 season and Clubs were forced to use that cash to survive 2020.
Minor League Clubs availed themselves of the PPP program, but PPP was designed to help a business get through about two months with no revenue – not enough to prop up an industry facing essentially zero revenue for nearly two years.
Further, payroll is not our only, nor our biggest expense so a loan amount based on average payroll costs, which also requires 60% of funds to be directed to payroll, does not provide enough support to cover our fixed costs or sustain our businesses with no revenue into 2021.
Due to the length of our industry’s government-mandated closure, high revenue loss, high overhead costs, lower payroll costs as a percentage of overall expenses, and having no work to offer employees, PPP simply wasn’t designed to ensure the survival of an industry like ours.