A 2020 Minor League Baseball Season Grows More And More Unlikely
If this were a normal year, the MiLB season would be one week old. But as we all know, there is nothing normal about 2020. And it’s becoming all too easy to imagine the complete 2020 season being cancelled.
While most everyone involved in MiLB is cautiously optimistic publicly, the reality is it is going to be quite difficult for any MiLB team to play at all this year. In off-the-record discussions with people all around the game, there is a near-universal acknowledgement that there are a massive amount of hurdles that have to be overcome to make any MiLB season happen.
Public pronouncements in recent days make the resumption of the season difficult. Multiple governors have said they find it unlikely that mass events, including sporting events, will be allowed in the next several months. In an interview with Snapchat this week, Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said that sports will only return this summer in very controlled circumstances with no fans.
That’s only the first hurdle. Many MiLB leagues stretch across numerous states. Getting approval from each state, county and city to resume adds several additional logistical hurdles—the South Atlantic League (a league that plays in 14 cities in seven states) or Pacific Coast League (which has 16 teams in 11 states) can’t easily resume if only half of its teams are in areas where mass meetings are allowed.
Even if somehow those issues were resolved and MiLB leagues were cleared by local and state governments to play, there are further obstacles. MLB teams would have to decide they are comfortable sending players to travel from town to town for a MiLB season.
MLB has studied ways to play fan-free MLB games where its teams would stay isolated from the public at large, possibly by staying at their spring training sites. Even for MLB, the idea of playing games at its own stadiums, which are spread across 26 different metropolitan areas, seems unfeasible in the near future, which is why it has discussed the idea of playing all games in the Phoenix metropolitan area.
The hurdles of having MLB teams play at their home stadiums are small compared to those faced by the minor leagues. MiLB games take place in more than 150 cities and towns all around the country. While MLB teams fly from city to city on chartered planes, Triple-A teams fly commercially, while almost every other team buses from city to city. If the plan is to potentially keep MLB players isolated from the community at large, there’s no real way to do the same with MiLB players playing outside of the MLB teams' spring training complexes.
Without a massive change in the health and safety environments of communities all around the country, it’s hard to see when MLB is going to be comfortable sending players on the road (and whether players would be comfortable to go).
But even if governments approve letting MiLB teams play and if MLB agrees to send players out and if those players are comfortable going, there’s still one further hurdle for MiLB teams. Will fans be willing to come to games in significant numbers before a vaccine has been developed and distributed?
Fan-free games might work in the major leagues, where TV revenues are significant. In the minors, they are a non-starter. MiLB relies on packing fans into the stands on its most successful weekend dates and using those full houses to make up for the sparse crowds on less-attended days. Spacing out a few hundred or even a thousand fans around the park is a money loser.
MiLB teams rely on the fireworks nights, bobblehead giveaways and holiday weekends to produce a significant amount of their in-season revenue. Theoretically, there may be scenarios where teams see modest revenue (and potentially non-profitable games) as better than no revenue, but it’s very hard for MiLB to make sparsely attended games successful.
All of these issues make it difficult for MiLB teams to play games this summer. And unlike MLB, which has discussed pushing the season end back significantly (to November or even December) if needed to get games in, such an option is unrealistic in the minor leagues.
There are no domed stadiums in the minor leagues. Geographically, many MiLB cities are in areas where the weather becomes downright cold in October. More importantly, the current and expiring Professional Baseball Agreement does not allow games to go past the end of September.
So that’s the bad news for minor league teams.
But it gets even worse.
If MiLB does not play games in 2020, the economics in 2021 will become much more dire, even if the country has somehow put the coronavirus pandemic into the past and the situation returns to normal next spring.
MiLB teams, especially in full-season ball, had just finished their offseason sales of advertisements, promotions and season tickets when the coronavirus shutdown hit.
When the season was delayed, teams all across the country began calling their advertisers and ticket holders. The message was generally the same whether the conversation was taking place for a Pacific Coast League club or one in the Carolina League: Don’t worry, we’ll make sure to take care of you.
Without a season, the best way for minor league teams to take care of season ticket-holders and advertisers is to offer make-goods for 2021. With no 2020 season, an advertiser who has paid in full has effectively already paid for 2021. One who has made a partial payment is due a refund or some other make-good.
The same is true for the sponsor of the picnic area or the between-inning sumo promotion. A season ticket-holder or mini-group ticket buyer who paid in full for this year gets to roll over those purchases for 2021 (and likely will get a bonus of extra tickets or credits to spend on concessions as an inducement to roll the tickets over rather than ask for a refund).
That’s the best-case scenario for MiLB teams, but even that means cutting dramatically into next year’s revenues. Many teams have longstanding relationships with their season ticket-holders and advertisers and have modest churn from year to year.
It means next year’s sales season begins in an almost impossible hole. Every wall sign or ticket already committed for 2021 is one that can’t be sold next year. Such rollovers will guarantee that teams next year will have less than normal revenue as well.
For those ticket buyers and advertisers who aren’t willing to push their ads and tickets into next year, the other alternative is a refund. For minor league teams, that’s means returning money at a time when teams are struggling to have the cash flow to meet payroll.
There is a modest bit of good news for teams.
No season this year will also lead to reduced expenses for next year. Most teams had already spent on uniforms, giveaways and other of the thousands of items that are needed to get ready for a season. Most of those are durable goods that can be used next year instead.
Minor League Transactions
Transactions involving minor league players for the period June 27-July 8, 2020.
But the reduction in expenses doesn’t come close to matching the reduction in revenue. With no season, MiLB teams face an entire year with almost no income (other than the modest revenue that comes from merchandise sales). Already, many teams around the country have begun to furlough or lay off significant numbers of full-time employees. Many successful teams with large full-time staffs have found they don’t have the cash flow or the reserves to keep meeting payroll month after month.
For many teams, the federal government’s payroll protection program is providing a cash influx to keep people employed for now—although some MiLB teams who are owned in large part by their MLB teams may have issues qualifying as a small business. There have been discussions of MiLB teams potentially receiving further help from the federal government, although nothing is certain.
Without outside help, multiple MiLB operators predict that the layoffs will increase dramatically if the season is eventually cancelled. With no season (and cancellation of the concerts, beerfests and other events that many teams have added in recent years), there’s no income to provide cash flow to pay employees.
There also will be virtually nothing for those employees to do—the lack of a 2021 schedule until a new Professional Baseball Agreement is finalized with MLB adds to uncertainty.
Around the country, a large number of teams will likely prune back to a very minimal staff, with the hope that they can survive to the resumption of baseball, hoping they can add staff back quickly at that point.
It’s a bleak prognosis, but it’s becoming an ever-increasing possibility.