How Independent Baseball Teams Make Money. Or Don’t.
Article is published here in Wall Street Journal By Andrew Beaton
on August 24, 2015
In 1994, Bill Lee was interviewing to become commissioner of an independent baseball league when he faced a pointed question: “Why would you want this job when the league’s going to be out of business in a year?”
“I said, ‘Well, if I take it, I hope it’s not. It better not be,’ ” recalls Mr. Lee, an unpretentious former minor-league and independent-league player.
Twenty-one years later, he is still the commissioner, and the Frontier League is now the oldest active independent baseball league in the country. But the question still sits in the back of Mr. Lee’s mind—and hovers over independent teams everywhere.
Independent baseball is an umbrella term for any league not affiliated with Major League Baseball—the 30 MLB teams and their minor-league farm clubs. The quality of play in independent leagues is comparable to that in the affiliated minors, but that’s where the similarities end.
Affiliated teams—sometimes owned by a big-league club but more often by outsiders—are pipelines for prospects training to play in the majors and rehab spots for injured players who have already made it. Independent-league teams don’t have the luxury of working with a big, deep-pocketed club. They have to find and pay their own players and coaches, in addition to covering major costs such as travel, lodging, equipment and workers’ compensation.
That means teams often live on the razor’s edge and must find creative ways to survive—holding promotions, signing former major-league stars and slashing expenses. Even then, many leagues fold and even successful teams spend seasons in the red; margins are so slim that rainouts or scorching days that keep fans away from home games can wreck a season.
In most cases, the teams are kept alive by owners who are either independently wealthy or have a basket of other businesses, and are prepared to swallow some losses for the thrill of owning a team. “In any league, I’d be surprised if over half the teams make money,” says Miles Wolff, commissioner of the American Association and Canadian American Association independent leagues.
For many teams, the first step toward making it into the black is recognizing that baseball is only a fraction of why fans attend games. The big part of the equation is atmosphere and often silly stunts. “We’re in dinner theater,” Mr. Lee says. “We’re there to feed people and entertain them for three hours. It just so happens that your show is a baseball game.”
The stunts range from the ludicrous to the brilliant. The St. Paul Saints, now a member of the American Association, once auctioned off an at-bat in a game. (The 35-year-old auction winner popped out to the catcher.) The Saints, famous even among independent teams for their wacky antics, also have a trained pig deliver balls to the umpire. The Frontier League’s Gateway Grizzlies gained national attention for selling a bacon cheeseburger sandwiched between doughnut buns.
Other independent-league experiments show the flexibility that comes from having no MLB affiliation. Pete Rose, MLB’s all-time leader in hits, who was banned for gambling on games, has attracted crowds by signing autographs at Frontier League games. And with discussion in recent years about the pace of games, big independent leagues have taken steps to speed up play, such as automatic intentional walks and limiting how often a coach can visit the mound.
The leagues have also signed former stars who are past their heyday but can still fill seats. The now-defunct Newark Bears once had lineups that included Rickey Henderson or Jose Canseco. The Long Island Ducks have brought in a number of notable names, from former National League Rookie of the Year Dontrelle Willis to onetime New York Mets star Edgardo Alfonzo.
“You have more tasks, you have some additional expenses, but you have a little bit more control over your destiny,” says Frank Boulton, owner of the Ducks and founder of the Northeast’s Atlantic League.
Teams also focus on keeping costs down. The Frontier League caps a team’s salary at $75,000 a season, with individual player salaries capped at $1,600 a month. Players can make as little as a few hundred dollars a month. Like the owners, they do it for the love of baseball.
For most teams, though, there is no formula that works consistently. “There are some years where we make money. There are some years we break even, and there are some where we lose money,” says Alex Wilson, assistant general manager of the Gateway Grizzlies, which he says are in the top portion of the Frontier League in terms of revenue. “These owners are doing it because they love baseball and love the community.”
One big exception to the rule is the Ducks, which Mr. Boulton says have always been profitable. That has a lot to do with how Mr. Boulton leveraged a lack of affiliation with MLB. He had previously owned three MLB-affiliated minor-league teams but couldn’t move one to his native Long Island because the Mets own the territorial rights there. In 1998, he founded the independent Atlantic League and then brought a team to Central Islip, N.Y. Now the Ducks are perhaps most successful independent franchise. Thanks largely to a prime location, their average attendance, nearly 6,000 fans a game in recent years, is just below the roughly 6,700 that the highest level of affiliated minor-league teams have averaged this season.
The surrounding region, too, has been fertile ground for independent teams. The Atlantic League boasts the highest average attendance among the biggest independent leagues, with 4,119 fans a game this year. Teams in the largely Midwestern Frontier League have averaged 2,247, while the American Association and Canadian American Association have averaged 3,119 and 2,007, respectively.
Saddest of possible words
For many leagues, the financials never work out. Dozens of leagues have begun and folded in recent years. Just this year, the Mount Rainier Professional Baseball League, located in the Northwest, went under in its inaugural season after a handful of games. Mike Greene launched the operation after working in the independent Pecos League. He tracked down six locations and stadiums for teams, assembled their staffs and worked out a balance sheet where he would need an average of just 300 fans at every game to break even.
But he was also counting on buyers to acquire franchises—yet potential buyers kept walking away at the last second. He found himself having to cover big expenses such as travel costs and hotels himself. A few games into the season, Mr. Greene found that he was $75,000 in the hole. By the end, he was willing to give ownership of the teams away free to find someone who could share the financial burden. There were no takers. “I think I had a really good business plan and a great idea, it was just poorly funded,” he says.
In a move to strengthen themselves, the four longest-running independent leagues have established a loose connection called the Independent Professional Baseball Federation to discuss marketing and baseball-operations efforts. “I think these four independent leagues in existence are the only ones that will survive into the next decade, because there aren’t any other places with enough good markets for six or eight new teams,” Mr. Wolff says.
For more information visit Pecos League of Professional Baseball Clubs LLC. http://www.PecosLeague.com 575-680-2212