Monday, July 15, 2013

The Key to the Business of Minor League Baseball

In a country that frowns upon monopolistic practices, one could question that professional sports leagues operate as monopolies. Despite the fact that rivalry leagues never seem to last financially, minor league baseball has not only maintained their status, but also increased their profit during a tough economic time.  The question is how? Minor league baseball teams have a different approach to their business compared to the major league.

The one fact that is often forgotten when it comes to the minor leagues is the player and coaches contracts. These salaries are not a part of the minor league teams’ expenses because the major league teams take care of the salaries. Along with this, they usually supply half of the equipment such as bats, balls, and jerseys. After one realizes this, the focus becomes on how to market the team. This is one of the most important details. A successful minor league owner will market his team rather than the individual players. Individual players can be called up or sent down at any time, so it is not smart to focus a marketing campaign around the individual players.

Record in minor league baseball means absolutely nothing. Rather, the focus is on family fun and entertainment at a reasonable price. The most successful teams have creative owners, who bring in concerts, fireworks, or movie nights for fans. Also, rock walls and swimming pools are becoming extremely popular in minor league stadiums. These are simply more assets for families to enjoy. Many teams also offer the opportunity for kids to run the bases either before or after the game.

Minor league games offer a fun, excitable, family-oriented, and affordable environment compared to the prices of attending a major league game. Since 2008, the average team value is up 5% and average revenue has increased by 12%. Average operating income value totals $4 million and the top 20 teams are worth an average of $22 million.

As it comes down to it, minor league baseball is a great business to invest in because it is on the rise and will continue to be. By offering family entertainment at reasonable prices, a creatively and properly owned minor league team can produce a revenue well worth your money


Michael Proska is a freshman at Drexel University from Springfield, PA pursuing a Sport Management degree along with a minor in Statistics. Along with being a writer for the SMTSU blog, The Sports Complex, he has an internship with Drexel Athletics in the promotions and marketing department. Michael is a member of the Army ROTC at Drexel University.  Michael is the Secretary for the SMTSU.  Follow Michael on Twitter @mikeprosk.
Connect with Michael Proska on LinkedIn.

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