This Week's News
Minor league baseball tries to keep its unique feel while costs and profit pressures threaten its business.
By ERIC FISHER
Published August 16, 2010 : Page 01
Marv Goldklang, chairman of the Goldklang Group that owns four minor league teams and has been in the business since the 1980s, sees the major changes in the business, too. Among those changes is a far more serious tenor behind the scenes.
"It's night and day now from what it was," Goldklang said. "We spend a lot more time these days at league meetings talking about marketing issues as opposed to the umpire with the tight strike zone that we're all frustrated with. But there's been a payoff there, too. Some of the best marketing talent in the business is found at the minor league level."
Indeed, the minor leagues have made their mark and experienced both attendance and revenue growth over the past two decades thanks largely to promotions and giveaways that never would happen in the majors. Goldklang's own partner, Mike Veeck, was the brains behind Tonya Harding Mini-Bat Night, Enron Night, the ill-fated Vasectomy Night, and scores of other newsmaking and attendance-boosting promotions.
Other marketing efforts, however, are more straightforward and aim to play into societal trends, in turn serving as something of a lab experiment for potential use at the major league level. The Goldklang Group's latest marketing push is Be Your Own Fan, an effort that incorporates social media and online video to promote minor league baseball as a highly variable entertainment option, where a fan may come to a game for the baseball, a summer night out of the house, a group outing with friends and family, or for some other, individual reason.
The relentless marketing and sales push is borne out of necessity, whether for minor league baseball's MLB-affiliated clubs or for those teams and leagues that operate as independents. Even with attendance remaining at historically high levels, the minor leagues are facing increasing pressure from scores of other entertainment options, both in and out of the home.
Generally speaking, the working agreements between MLB parent clubs and their minor league affiliates call for the MLB club to pay the salaries of players and coaches, some equipment costs, and per diems. The individual minor league teams then are responsible for stadium operations, business and marketing functions, team travel and other similar expenses. Individual minor leagues pay for their umpires. Independent minor league teams and leagues are just that, independent, and do not have the financial support of MLB. The Class AAA Indianapolis Indians, one of a handful of minor league teams whose stock is publicly owned and traded and thusly files financial reports, has been profitable for the last 37 years, with a 38th all but certain to happen. Profits for the team fell sharply last year, to $459,603 compared with $1.23 million in 2008. Even with an expected rebound this year in every key business metric, the club has some type of giveaway, promotion or theme night for every home game the rest of the season, with many games featuring multiple elements.
"We have such sincere competition in Indianapolis," said Indians general manager Cal Burleson. "Particularly in August, there is a definite increase in the competition here for the entertainment dollar between the state fair, the [NFL] Colts starting back up, the [WNBA] Indiana Fever, high school and college football, kids going back to school. We have to do things at a higher level than we might otherwise."
Reid Ryan, president and chief executive of multiteam operator Ryan-Sanders Baseball, said he notices a couple trends in particular in things being down from several years ago.
"Everybody is really struggling with those Monday to Wednesday dates," he said. "People are still coming out, but more on the weekend [or] once a week as opposed to twice a week or so, like before.
"And for our [Class AA] Corpus Christi [Texas] team in particular," Ryan said, "there has been a real big push on real substantial promotional items - a shirt or backpack or something like that - where that would enable people to perhaps avoid a trip to Wal-Mart."
The Connecticut Tigers, a short-season Class A minor league baseball team playing in a Norwich, Conn., office park, rank a meager 12th in the 14-team New York-Penn League in attendance, with an average draw of about 1,400 fans per game. The club is not yet certain whether it will be profitable this year. And team officials freely acknowledge that they are playing in a market with historical challenges: The previous tenant, the Class AA Connecticut Defenders, left last year for Richmond, Va.
MINOR LEAGUE STARS
A look at several rising executives in minor league baseball who've seen recent successes.
GEOFF BROWN General manager, Lakewood (N.J.) BlueClaws
The Class A affiliate of the Philadelphia Phillies, located near the New Jersey shore, has been a consistently strong attendance draw and on the vanguard on many advances in the sports industry, including all-you-can-eat sections, tweet-ups and, more recently, a sports management and networking seminar that helped position the club as more of a community resource.
KURT LANDES General manager, Lehigh Valley (Pa.) IronPigs
The IronPigs are the attendance leader of the affiliated minor leagues, with an average draw of more than 9,100 fans a game this season. But Landes' success dates back much further than this season, with marked attendance gains under his watch in prior stops at Akron, Ohio; Daytona Beach, Fla.; and Hagerstown, Md., among others. Landes also oversaw the highly successful team-naming and merchandising effort around the IronPigs brand. The team began play in 2008.
GARY MAYSE Executive vice president/baseball operations, Mandalay Baseball Properties; General manager, Dayton (Ohio) Dragons
On top of overseeing Mandalay's baseball operations, Mayse helps lead the Dragons, by far one of the more successful sports entities anywhere. Despite a very weak economy in southwest Ohio, the Dragons have sold out more than 770 consecutive games. That's every home game for the Dragons since the team debuted in 2000.
TYLER TUMMINIA Vice president, marketing and operations, Goldklang Group
Tumminia leads marketing for one of the more successful minor league operators, with a portfolio that blends three affiliated teams with an independent team in St. Paul. She also created the Be Your Own Fan campaign that blends online video, social media and more traditional marketing. This story is written by Eric Fisher of Sports Business Journal
This story was not subject to the approval of the National Association of Professional Baseball Leagues or its clubs.