Minor league baseball needs fans to survive the coronavirus pandemic
Despite being linked to MLB's billion-dollar ball clubs, minor league baseball teams are essentially just small businesses — and like most other small businesses right now, the coronavirus pandemic has put their future in jeopardy.
By the numbers: MLB's gross revenue in 2019 was $10.7 billion, 50% of which came from media rights deals. The minor leagues, by comparison, have an entirely different model, relying much more heavily on ticket sales and the in-stadium experience.
$864 million: Minor league baseball grossed $864 million across its 160 clubs last year. That's $5.4 million per team, and a staggering 89% of that is used to pay operating expenses, according to data provided to Axios by the minor leagues.
- $70,000 x 70 games: Minor league teams gross $70,000 per home game, which comprises over 90% of their annual revenue.
- 15.6% reduction: With roughly 12 home games each month, teams lose 15.6% of their annual revenue with each month of lost games.
- 3,400 full-time jobs: 160 teams, each with an average of 21 non-playing or coaching staff (whose wages are paid by their MLB club), means nearly 3,400 full-time jobs are at risk, plus another 32,000 part-time seasonal employees.
What they're saying: Add all that up, and you can understand why MLB's proposal of playing without fans isn't a viable option for the minors, where an extra rainout can be the difference between being in the black and being in the red.
"Our entire business model is people coming to our stadium. The concept of even playing a game in our stadium with no people is so far outside of our business model that it almost seems like a wasted effort to even ponder it."— Scott Hunsicker, GM of the Reading Fightin Phils, via WSJ
The backdrop: Long before coronavirus arrived, MLB proposed cutting 25% of minor league clubs as part of a massive restructuring plan. So it's safe to say these two parties didn't have the best working relationship at the time this crisis struck.
The bottom line: The way minor league clubs operate as small businesses is one of the many charming aspects of professional baseball in this country. But if they're left to fend for themselves, the whole system is in danger of collapsing.
Go deeper: Baseball's uncertain future