2013 MLB Draft Signings Central
Welcome to Baseball America’s 2013 MLB Draft Signings Central. We’ll use this space to highlight all signings for $750,000 or more, plus any other significant transactions. We’ll also cover many [...]
PCL, Cal League step in to control ailing franchises
by Will Lingo
During the opening session at just about every Winter Meetings in the past decade, Minor League Baseball vice president Pat O'Conner has talked about the financial challenges facing minor league franchises.
In various forms, O'Conner has told anyone who would listen that while many teams were having great financial success, many more were struggling to break even. And while new ballparks and growing staffs meant bigger business, the rapidly increasing expenses of running a minor league team made success more precarious.
Perhaps now people will pay more attention. Because in case you hadn't noticed, two minor league franchises are now under the control of their respective leagues after they became awash in red ink and could no longer operate on their own.
The situation with Portland, Ore., and the Pacific Coast League has been well publicized. A grand plan in Portland involving tens of millions of dollars has gone sour, and the only questions now are who will pick up the pieces, who will have to eat millions of dollars in losses, and whether the team has a long-term future in Portland.
The takeover of the Bakersfield Blaze was much more surprising. Bakersfield is a charter member of the California League and has had a professional baseball team almost continuously since 1941, but years of declining attendance and the lack of a new ballpark on the horizon finally led to the league stepping in.
The root of the problem in Bakersfield dates back to 2001, when a project called City Center was to include a new ballpark. The project fell apart, however, and the team has essentially been on life support since then. The Blaze has been one of the worst draws in the Cal League for years, and was averaging around 1,000 fans a game this year.
Even when the ballpark project was being discussed, league and city officials wanted the Patton family to sell the team. Lowell Patton bought the franchise, then a Dodgers affiliate, in 1985 from a farmer named Bob Andrews. The purchase price was $200,000.
Rancho Cucamonga Quakes owner Hank Stickney nearly purchased the Blaze in 2001 when the City Center project was in full swing, for a reported $3.9 million. Those talks collapsed.
Longtime Blaze general manager Jack Patton, Lowell Patton's son, said the team was nearly sold again in the offseason, but the deal fell through in December. The Patton family had banked on the sale going through, so when it didn't the team had to scramble to get ready for the 2004 season.
"We weren't told we'd be operating this year until mid-February," Patton told The Bakersfield Californian. "To put everything together in a month and a half was impossible."
And that led to Stickney, as well as two other Cal League owners, getting involved with the franchise again. Stickney, Gary Jacobs of the Lake Elsinore Storm and Dave Elmore of the Inland Empire 66ers put up the money to buy the franchise from the Pattons and turn over operation to the league. For the rest of the season, the GM duties will be divided between Rancho GM North Johnson and Lake Elsinore GM Dave Oster.
When asked by the Californian if $3.9 million was close to the purchase price, Jacobs called it "somewhere in the area." Stickney said the actual price was "well below that."
It's not the first time the Cal League has taken over a franchise, and no one expects the three-headed current ownership arrangement to become permanent. For one thing, baseball rules prohibit any owner from having more than one team in a league. The Cal League's operation of the franchise with Elmore, Jacobs and Stickney simply putting up the money gets around that problem for now.
The same is said to be true in Portland, where the PCL hopes to find a permanent buyer for the Beavers soon. And because these aren't expected to be long-term problems, Minor League Baseball president Mike Moore said he's not particularly concerned about having two teams under league control.
"Prior to each takeover, I informed each league that I expected it to be for short terms and that new owners would be expected to take over as soon as it can be accomplished," Moore said. "I believe you will see that happen in Portland within the next few months and hopefully in the case of Bakersfield prior to next season."
But it's worth noting that just six months ago, O'Conner was saying that 10 percent of minor league clubs account for 70 percent of the industry's net income, and that half of minor league clubs had net losses in 2002 and a quarter lost money from operations.
There's no reason to expect the trend to change. Expenses aren't going down, while ballparks get older and new markets become fewer and further between. The squeeze could get tighter, and as these two situations show, the margin for error keeps getting smaller.