COVID-19

What does minor league baseball’s canceled season mean for teams and the towns that host them?

Andy Uhler and Rose Conlon Jul 6, 2020
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"Most minor league revenue is butts in seats, they make their money from having people attend games," says Hannah Keyser of Yahoo! Sports. Mike Ehrmann/Getty Images
COVID-19

What does minor league baseball’s canceled season mean for teams and the towns that host them?

Andy Uhler and Rose Conlon Jul 6, 2020
Heard on:
"Most minor league revenue is butts in seats, they make their money from having people attend games," says Hannah Keyser of Yahoo! Sports. Mike Ehrmann/Getty Images
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A shortened major league baseball season is scheduled to start at the end of this month, even though many players have voiced concern over doing so and have to decide if they, in fact, want to suit up.

Players in the minor leagues won’t have that option. Last week, minor league baseball canceled its season for the first time in its history.

Hannah Keyser, a national baseball writer at Yahoo! Sports, discussed what that means for the players and towns where these teams play with Marketplace’s Andy Uhler. The following is an edited transcript of their conversation.

Andy Uhler: For a lot of small towns, the minor league team is sort of the attraction, is sort of a thing, right? There are economic implications there not just for the players, but for everything that’s going on in the city, yeah?

Hannah Keyser: Yeah. So what’s interesting about minor league teams is that everything you’ve heard about Major League Baseball, and probably sort of all pro sports teams, and, “They make so much of their money from television rights deals, and, you know, ticket prices hardly even factor in” — that’s not true at a minor league level. Most minor league revenue is butts in seats, they make their money from having people attend games. And so more than half of these teams could go under, could become essentially bankrupt. And for that, you sort of have to understand how the finances work.

So minor league teams themselves are essentially small businesses. Somebody owns the team that’s located in Toledo. But the the way that they function economically is Major League Baseball pays the salaries of the players and the coaches and the staff, but they still do have all these other expenses. And these sort of local businesses are on the hook for things like ballpark leases, marketing costs, food and beverage supplies and then salaries and benefits for their permanent employees.

Uhler: Because those expenses, they don’t just go away.

Keyser: Right, exactly. Those are expenses that without any revenue this year from tickets, these mom and pop — essentially — minor league baseball teams can’t afford their rent. They can’t afford the upkeep on the ballpark.

Uhler: We’ve been talking about minor league contraction for a while now. And you’re telling me you think this is kind of a done deal?

Keyser: Yeah, so Major League Baseball has been looking to contract, the number of teams. There’s 160 teams, they want to cut 42, and this was a huge issue over the winter. And so what’s really interesting is Major League Baseball, as part of the pandemic negotiations, slashed the draft, like fully, from 40 rounds to five, so it does look like the minor leagues are going be smaller.

Uhler: The product on television if you’re watching Major League Baseball, does it change if we have a contraction? Or are we not going to notice it?

Keyser: I mean, that’s a really good question. Major League Baseball would tell you that you’re not going to notice it. Where you’ll feel it, if you’re sort of involved in baseball, really, there’s not a lot of jobs. Those effects will take a while to be felt, and probably you won’t notice them if you’re a casual fan. But people within the game are already concerned that, you know, it’s a shrinking of their industry, and that’s bad for people in the industry.

COVID-19 Economy FAQs

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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