Sports was at the forefront of the national COVID-19 news yesterday, as United States President Donald Trump spoke with commissioners of sports leagues about the effect the virus has had on them. And one bit of news that came out of that call not only will affect the bottom line of MLB, but also Minor League Baseball.
President Trump and League Commissioners
It may seem odd to some as to why Trump would meet with the commissioners of the NFL, NHL, MLB, NBA, and MLS, considering that sports aren’t an essential part of daily lives right now. However, it does make sense, as not only do sports teams and leagues employ millions of individuals, but also bring in billions of dollars into the economy. And when you also look at how sport drives people to restaurants, bars, and hotels, amongst other places, you start to see the real impact that sports have on the national and global economy.
During the call yesterday, Donald Trump told the leagues that he hopes that business can return to normal as soon as possible, and he also said that he wants fans to return to sporting events “whenever we’re ready.” It’s also worth noting that the President also said that he hoped that that time could come for fans to return to games sometime between August and September, although nothing can be set in stone right now.
This will no doubt affect the bottom line of these leagues, and MLB is no exception to that. Teams will lose out on millions of dollars in gate revenues should the leagues be unable to open their doors until then. This will most likely be the case, even if MLB can start play before August. It’s almost assured at this point that states that are going to ban public gatherings for at least parts of the summer in order to contain the novel coronavirus. Just look at Virginia, as Gov. Ralph Northam (D) issued a stay-at-home order until June 10 as that state battles the COVID-19 pandemic. In Canada, the city of Calgary, Alberta has banned all public gatherings (including sporting events) until June 30. These types of bans will most likely become more widespread in the U.S. in the coming days and weeks.
However, Major League Baseball should still be fine despite that loss. Even though revenues will be down, TV and merchandise revenues can keep these teams afloat, as long as games can be played. However, if the league can commence its 2020 season sometime in June or July, it may be in Arizona. Ken Rosenthal of The Athletic reported that MLB is pondering starting the season with neutral-site games in Arizona, which would essentially quarantine all 30 teams from the virus. This plan may work for Major League Baseball, but it won’t work for Minor League Baseball.
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COVID-19 Effects on MiLB
If MLB is forced to start the 2020 season in front of empty seats, it will certainly mean that these clubs will not send out their minor league players to affiliates this summer. And even if they did, minor leaguers would almost certainly have to play in front of empty seats this summer. Even though MLB can generate revenues under this situation, MiLB generates essentially no TV revenue. Rather, MiLB teams make most of their money off of tickets sold and sponsorships. But if no fans can be admitted into stadiums this summer, these revenue streams disappear.
This couldn’t have come at a worst time for Minor League Baseball, as they are currently embroiled in a fight with MLB over contraction. MiLB, along with the 40+ teams there were on the chopping block, needed a strong 2020 to prove to their parent clubs that they are important to their communities. But with the possibility of no baseball in these markets this season, it’s quite possible that some of these teams won’t be contracted, but instead simply go out of business. After all, Jeff Lantz, Senior Director of Communications for MiLB, noted in March that while teams plan for a few rainouts a season, “having 8-to-10 rainouts is the difference between being in the red or being in the black for a lot of clubs.” Imagine what wiping out a whole season will do to teams.
It’s still early to determine how great of an effect the novel coronavirus will have on MiLB teams, but it’s already hit them in a big way. And if these teams can’t open their doors to fans this year, it may alter the Minor League Baseball landscape in ways we couldn’t have imagined.
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