Lost season for Minor League Baseball could have financial impact for 2-3 years
Minor League Baseball President and CEO Pat O’Conner said it could take clubs as many as two or three years to work out of the financial devastation of having this season canceled. The head of the 160 affiliated farm teams painted a bleak picture for the future of Minor League Baseball in the wake of the season’s cancellation Tuesday.
There are many moving parts to how clubs will deal with the loss of revenue from not having a season. O’Conner even said without government intervention, “north of half” of minor league teams could have to sell their franchise or could become insolvent.
“This is the perfect storm,” O’Conner said. “There are very many teams that are not liquid, not solvent, or not able to proceed under normal circumstances. And these are anything but normal circumstances. The coronavirus has cut into many clubs’ ability to make it.”
Williamsport Crosscutters Vice President of Marketing and Public Relations Gabe Sinicropi said Tuesday the organization is in a spot where it can weather the storm of a lost season. But it is in that spot because of a sacrifice being made by its ownership group, Trinity Sports Holdings. The group, including Principal Owner Peter Freund, have committed to keeping the Crosscutters in Williamsport for the 2021 season and have said numerous times the hope is to stay even longer.
Trinity Sports Holdings also owns the Memphis Redbirds in the Class AAA Pacific Coast League. Freund also has an ownership stake in the Charleston Riverdogs, the low Class A affiliate of the New York Yankees.
On May 27, a bill was introduced in the United States House of Representatives which could provide financial assistance to “sports facilities, museums, and community theaters” among others. The bill, as it was presented to Congress, would allow financial assistance to pay basic bills, including rent, utilities and employee compensation.
That was the government assistance O’Conner referenced as being key for Minor League Baseball teams to survive the loss of revenue from a canceled season. The Crosscutters have already taken steps to be as lean as possible by getting loans through the Paycheck Protection Program as well as having its employees furloughed to save money on payroll.
But despite all that help, O’Conner said it could be 2022 or 2023 until clubs are able to get out from under the financial strain of this season.
“Losing the 2020 season with an uncertain future on many fronts, I could easily see this lingering into 2022 or 2023, and in some cases even longer,” O’Conner said. “It just depends on how much revenue you have to defer and how long you have to defer it out.”
The Crosscutters were finalizing plans Tuesday for how to disperse the money it had received from fans and sponsors for tickets or advertising agreements. For sponsors, one option for many clubs will be to roll over that money to the 2021 season. But O’Conner cautioned against doing that with all sponsorship money because they it creates back-to-back seasons of revenue shortfalls.
But there are no blanket solutions for the 160 affiliated minor league teams. As O’Conner said, each individual situation is different from the next.
“The ones who get to the other side of this will get to the other side stronger,” O’Conner said. “The pain and suffering is not classification-centric, either. It is team specific.”
With Major League Baseball proposing a cut of 42 minor league teams in the initial negotiations with Minor League Baseball for the Professional Baseball Agreement, O’Conner said attrition from the COVID-19 pandemic could alter the teams which were initially on that list of 42 potentially eliminated clubs.
The Crosscutters have maintained they are safe in recent months, saying there have been various iterations of the list since it was first published late last year and Williamsport is no longer among the 42 to be cut. But while the team is confident it will be back in 2021 for another season of professional baseball, it is uncertain in how that season could be presented.
“We firmly believe we’re going to be around and it’s going to be under the Major League Baseball umbrella in one way, shape or form,” Sinicropi said. “We can’t wait to see what form that is. We’re optimistic, but we’re afraid of not knowing exactly what the future is. I wish I knew exactly what was happening next year with our baseball team. Anything could happen in those talks between Major League Baseball and Minor League Baseball. We don’t know what’s going to come out of the other side of those talks, and that’s where our trepidation comes from.”