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: Marketplace Morning Report
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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
"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

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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