PORT ST. LUCIE — The novel coronavirus has dramatically impacted all spectator events, generally.
Major League Baseball’s takeover of the minor leagues has dramatically impacted the owners of those minor-league teams, specifically.
Like with any business, you adapt or die.
One minor-league ownership group is ready to do the former, and to help others do the same.
“There absolutely is a future,” said Gary Green, the CEO of Alliance Group, even as he acknowledged, “The pandemic combined with (the MLB takeover) has definitely been a little nerve-wracking.”
The Alliance Group owns the Royals’ Triple-A affiliate in Omaha, the Giants’ Double-A affiliate in Richmond and the Rays’ Double-A affiliate in Montgomery, as well as the USL League One team Union Omaha and the magazine Baseball America. Green, who grew up as a Mets fan in Great Neck, and his group co-founder Larry Botel, a lifelong Phillies fan who was raised in the Philadelphia suburbs, came up with the idea to provide loans to their fellow minor-league owners through a newly created fund, which will be run by Oaktree Capital Management.
“The last time we had income, really, was the 2019 season,” Green said, alluding to the fact that there was no minor-league action last year. “We saw the need in front of our own eyes with our own team. We realized that industry-wide, this was going to be an issue.”
The plan calls for the loans to range from $1 million to $10 million, terms between two and five years and interest rates between eight and 12 percent. Team must exhibit some viability in the form of a trailing three-year average revenue of greater than $3 million (the average minor-league team has pulled down about $5 million in that time frame, Botel said) and trailing EBITDA (earnings before interest, taxes, depreciation and amortization) of more than $300,000 (most teams are around $500,000 in this category, Botel said).
If minor-league ownership groups can pull through these rough times, Green and Botel assert, they can get rewarded by not only the return to normalcy thanks to COVID vaccinations but also this new business model instituted by MLB.
“We’ve been in minor-league baseball ownership for 13 years,” Botel said. “Our major frustrations have been from a business perspective that Minor League Baseball hasn’t acted like a professional league. Not taking advantage of media dollars and Internet platforms to generate revenue. We think that Major League Baseball taking us over will start to open the door to a lot of those revenue streams and a lot of things that can make us more sophisticated and hopefully make us money.
“The pandemic is obviously delaying a lot of those things, but in the long run we believe in that.”
Minor-league games have become known best for wacky promotions and between-innings fun. Botel added: “Someone did a poll of fans walking out of a minor-league game, asking them, ‘Who won? Only 30 percent knew the answer. And nobody knew the score. What Minor League Baseball did was somewhat intentional: The owners realized they can’t control what’s going on: ‘We can’t control the baseball, so we can control the circus. We lost touch with the sport. That’s going to change.
“…The focus is going to be much more on baseball, really building around prospects. That will be much more the reason that people will come and watch minor-league baseball games, hopefully on TV, too. The amusement park is still going to be there, but the baseball (itself) is going to be much more important.”
It’ll be interesting to watch the attempted brand makeover. It’ll be a better test, like everything, when we get through the current challenges.
— This week’s Pop Quiz question came from the late Jan Bottone of Wellesley, Mass.: A 1997 episode of “Homicide: Life on the Street” features a murder at a baseball game between two American League East rivals. Name the rivals.
— It never ceases to amaze me how polarizing a figure Brett Gardner is among the Yankees’ fan base. Batting average isn’t that important if you can draw a lot of walks, folks! And here’s a reminder, from a story I wrote back in late 2019, of the sort of clubhouse value Gardner brings.
— Your Pop Quiz answer is the Yankees and Orioles. If you have a tidbit that connects baseball with popular culture, please send it to me at [email protected].