July 9, 2001  

Small-time baseball, big-time success
Attendance, team values, souvenir sales continue to grow in the minors

By Pete Williams
Correspondent

As Bruce Baldwin looks out of his office at The Diamond, the Richmond, Va., baseball stadium that houses the Atlanta Braves' Class AAA team, the view tells him a lot about the state of Minor League Baseball.

Baldwin, the Braves' general manager since 1986, sees a middle-aged ballpark in need of a $20 million renovation or a $60 million replacement to offer the carnival atmosphere, complete with luxury suites and restaurants, that today drives attendance in the minors.

The ballpark, built for $8 million, was considered state-of-the-art when it opened in 1985. Back then, few stadiums had luxury suites. Major sponsor deals were minimal. A Class AAA franchise could be had for $1 million. Minor league teams collectively generated less than $2 million in annual licensing revenue. Teams built their marketing plans, such as they were, around the stars of tomorrow making their way to the big leagues.

The Diamond was at the forefront of the stadium building boom that has fueled growth in the minors and changed the business landscape. Seventy-four minor league facilities have opened since 1990, raising both franchise values (the Richmond Braves, owned by AOL Time Warner, are valued with their Class AAA counterparts between $8 million and $12 million, according to valuations compiled by Minor League Baseball and by Baseball America magazine) and the cost of getting into the industry.

The surge in new ballparks and their accompanying diversions may have prematurely taken the shine off The Diamond, but they have helped turn baseball's minors into a winning proposition. While Major League Baseball ponders contraction and continues its endless search for solutions to the disparity between the game's haves and have-nots, Minor League Baseball arguably never has been healthier.

Last season, 37.7 million fans attended games among Minor League Baseball's 176 teams, the 16th time overall attendance has risen in the last 19 seasons. (This year, the number of affiliated minor league teams has increased to 181.) Attendance has surpassed 33 million in each of the last seven years, a level not attained since the late 1940s when more than twice the number of teams were playing.

The minors seem to be immune to the current economic downturn. Attendance in April was up 6 percent across the board from a year ago, and most club executives report little decline in advertising and sponsorship sales.

"Maybe it's the affordability or the product we offer, but we seem to be pretty much recession proof," said Chuck Domino, the general manager of the Class AA Reading ( Pa.) Phillies.

These days, Minor League Baseball generates more than $30 million in licensing revenue, a result of a 1991 partnership with Major League Baseball Properties to aggressively market minor league logos. Stadium signs that commanded just $1,000 a decade ago at the Class AAA level now go for up to 10 times more.

Last year, the Class AAA Memphis ( Tenn.) Redbirds moved into AutoZone Park, which with a $48 million price tag ranks as the most expensive baseball facility built below the major league level. The Albuquerque (N.M.) Dukes and Ottawa Lynx, teams near the bottom of Class AAA attendance rankings, nonetheless sold reportedly for more than $10 million apiece.

Even with increased revenue streams, such sale prices make it difficult to earn a significant return, at least until the team is sold again. "People are overpaying," Baldwin said. "Part of it might be a sense of community pride, part of it's ego, but a lot of them [will be] looking to resell five years from now."

Tickets to major league games remain cheaper than those of the NFL, NBA and NHL but have soared far beyond those of minor league games, where $5 to $10 is still the norm.

"There's no way we can compare ourselves to the majors," said Joe Pinto, general manager for the Frederick ( Md.) Keys, a Class A affiliate of the Baltimore Orioles that plays within an hour's drive of Camden Yards. "But what we can offer is a more fan-oriented, entertainment experience at a more affordable price."

Mike Veeck, who operates five minor league clubs, including two in the independent Northern League, said: "I'm still selling the same $2 beer and $1.50 hot dog I have for years.

"Every time fans turn around they hear about costs increasing, but we can still offer affordability."

Veeck continues the legacy of his late father, Bill, the maverick baseball owner, by crafting wacky promotions and encouraging employees to take a hands-on role in customer service. That trend has spread throughout the minors, where the action on the field sometimes seems like a secondary attraction.

New minor league ballparks inevitably include expansive picnic areas, playgrounds and inflatable obstacle courses. Many teams have instituted a "fan patrol," a team of young employees who go through the stands between innings awarding prizes and promoting fun.

Said Bob Richmond, president of the Class A Northwest League: "I think you see a lot of Bill Veeck throughout the minors, and that works in smaller markets where the pace of life might not be as fast."

Minor league executives point to the greater emphasis on marketing as the biggest change to hit the industry in the last decade. The success of the 1988 film "Bull Durham" and the subsequent boom in merchandise sales for the real-life Durham (N.C.) Bulls helped inspire the minors to license its logos more aggressively.

Now it's commonplace for at least a half dozen teams to change names during the off-season in the interest of greater merchandise sales. Last winter, the Class AAA Las Vegas Stars of the Pacific Coast League adopted an alien logo and became the Las Vegas 51s, playing off the nearby Area 51 (see story, page 23). The Texas League's Shreveport ( La.) Captains became the Swamp Dragons.

Miles Wolff, who bought the Bulls for $2,417 in 1979, sold the club for $4 million in 1991. Minor League Baseball now values Class AA clubs at $5.5 million to $8 million, full-season Class A clubs from $2.5 million to $5.5 million and short-season Class A clubs at $1.8 million.

Last year, the industry's governing body officially adopted the name Minor League Baseball, dropping the unwieldy National Association of Professional Baseball Leagues title it used for nearly a century.

This year, the minors are celebrating the 100th anniversary, although the date marks the creation of the NAPBL and not the origin of minor league baseball, which goes back much further. If nothing else, the anniversary has inspired more fireworks and promotions.

"When you go to a major league park, you expect to see the best players in the world," said Rick Brenner, general manager of the Class AA Trenton (N.J.) Thunder. "We might have a future star come through, but we can offer a more personalized fan experience."

© Copyright 2001 Street & Smith’s SportsBusiness Journal