Minor League Baseball: A Journey
If you've experienced a minor league baseball game in the past 20 years, it's hard to believe there was a time when it was viewed and treated as a virtual throwaway by its Major League parents.
In the 1960s, minor league baseball was rotting and dying a slow death. With low attendance and a slew of rundown stadiums, it was thought its only surviving entities might be AAA teams and possibly some AA ball clubs. The thinking back then was that college baseball, much as it had for football and basketball, would become the primary feeders for major league teams.
But in the 1970s, partially out of necessity due to MLB expansion, the minors began to resuscitate. In the late 1980s, on the strength of better marketing, Darwinian instincts, and believe it or not, due in a very large part to the release of Kevin Costner blockbuster Bull Durham (a film that, cinematically, is to minor league baseball what The Godfather is to the mob), the minor leagues saw a resurgence that continues to this day.
Minor League Baseball
Once seen as a dying industry, it can now count billionaires like Warren Buffett, Robert E. Rich Jr., and Herb Simon among its owners.
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Why are all of these captains of industry throwing their hats into the minor league baseball ring? Well, quite simply, it's just good business.
Combining minor league attendance with attendance for independent league teams, 48,408,316 went through the turnstiles in 2012, up 325,486 from 2011.
Affordability and superior marketing are what brings people to the ballpark. According to the most recent statistics, the Fan Cost Index (a metric which adds up the cost of tickets, hot dogs, sodas, beer and parking for a normal family of four) for a minor league baseball game is $61.23, less than a third of Major League Baseball's FCI of $210.46.
Once inside, the entertainment begins. Yes, there's baseball. But minor league ballparks are also the happy places where Christmas can be celebrated in May, Halloween can be celebrated in July, Star Wars can be celebrated whenever, and Manti Te'o's phony girlfriend can be the genesis for "Lennay Kekua Night," where Stanford students received two free tickets and catfish was served at the concession stands.
Yes, that happened. Thanks, San Jose Giants.
Fans bring in the revenue, but the secret sauce in the profitability model for minor league baseball as opposed to its Major League parent is in the player, manager, and coaching costs. Put simply, for minor league teams there are none.
Whereas with MLB teams, their largest line item far and away is the cost of the on-field staff's salaries (mostly players, but also coaches, managers, and trainers), for minor league teams, those costs are all subsidized by the parent ball club. Hell, even the cost of the bats and balls are split between the MLB club and its minor league affiliate.
It's basically the equivalent of owning a factory and having all of the workers paid for by some invisible sugar daddy.
The other aspect of minor league baseball that makes ownership so enticing is the willingness of cities and counties to help subsidize, or in many cases fully subsidize, the cost of new stadiums to help stimulate the local economy.
It's a phenomenon that buoyed new stadium construction in big league markets, including Houston, throughout the late '80s and the '90s: Convince municipalities that erecting a fully paid for baseball Taj Mahal will attract baseball fans, families, tourists, and the all important corporate dollars out to the park.
Watch the people spend money, watch them stimulate the economy, repeat (roughly 70 nights a year in the minors).
And it's worked.
The new stadiums are a huge part of the draw, allowing patrons to feel like they're getting some semblance of a Major League experience at a decidedly lower pricing point. (Truth be told, most fans are much closer to the action at a minor league game than they could ever hope to be at a big league game.)
In Frisco, the Mandalay-owned Roughriders (Texas Rangers AA affiliate) play in Dr Pepper Park (built in 2003), an award winning palace of a minor league yard with nine interconnected pavilions and a swimming pool. In Round Rock, the Ryan-Sanders owned Express (Rangers AAA affiliate) play at the Dell Diamond, where kids can play on the playscape or swim in the swimming pool.
Basically, these ballparks have become a microcosm of affluent suburbs, where having a swimming pool is merely a baseline for rating one's level of privilege.
Round Rock President Dave Fendrick puts it best: "At a minor league game, maybe 20 percent of the fans are hardcore baseball people. The other 80 percent are there to be entertained and to enjoy a night out at a great ballpark.
"We have a great ballpark."
"We never do anything here in Round Rock without thinking that we are representing the Ryan family."
Talk to Round Rock Express President Dave Fendrick about the success of the Express and mention Nolan Ryan. You'll hear an already energetic man bubble with praise and convey respect:
"Everything about this franchise is representative of the Ryans: first class, upright, ethical. In any decision, we always ask ourselves, 'What would the Ryan Family do?'"
Texas legend Nolan Ryan and Houston businessman Don Sanders run Ryan-Sanders baseball, which owns the Express and the Corpus Christi Hooks (Houston Astros AA affiliate).
And not surprisingly, like he did as a Hall of Fame player for more than two decades, Nolan Ryan sets the example for minor league baseball owners on how this business is run.
In Forbes' annual rankings of the top 20 most valuable minor league baseball franchises, both Ryan-Sanders franchises here in Texas make the list, with Round Rock coming in third overall at a value of $26 million (annual revenue of $14 million, operating income of $5.2 million) and Corpus Christi ranking 18th with a franchise value of $17 million (annual revenue of $9 million, operating income of $2.7 million).
In fact, Round Rock is one of only ten minor league baseball teams in the country, across all levels, to average over 8,000 fans per game.
No business succeeds without capitalizing on built in advanttages, and to that end, one of the best business partners that the Express and the Hooks have is the map of the United States. Geography. Quite simply, the proximity of both ball clubs to their respective parent teams allows for a synergy where fans of the MLB ballclubs can follow their team's future stars up close and in person at the minor league level.
In essence, the accommodating radius from Houston and Arlington to these affiliates allows fans of the Astros and Rangers to watch their players go from garage band to Grammy winners.
Before becoming the Rangers' AAA affiliate, Round Rock was the AAA farm team for the Astros. When the Astros decided to move their AAA functions to Oklahoma City, Round Rock didn't skip a beat at the turnstiles due in part to the Astros being backfilled by the equidistant Rangers.
"If it were any other Major League team besides the Rangers replacing the Astros as our parent club, it would cause a real challenge. Fans like to see the players who will eventually play for their big league club," said Fendrick.
In addition to the marketing benefits of geographic proximity, there's a tangible convenience factor for the parent ball club as well, particularly in the case of a AAA team like Round Rock, whose players are routinely summoned to the big league club.
"The closeness allows for our players to take a short car ride and be examined by Ranger doctors, if need be. If a player gets called up [to the Rangers] to play, they can be there in a matter of hours," explained Fendrick. "It makes a lot of sense."
Profit, convenience, fan friendliness, player recognition, brand awareness. All of these advantages of owning a minor league team within a short distance of the major league parent club are reasons why we've heard Astros owner Jim Crane extol the virtues of owning the team's minor league affiliates.
Crane makes no secret of his affection for The Woodlands as a possible site for the Astros' AAA affiliate once their contract with Oklahoma City expires after the 2014 season, for all the reasons Fendrick outlined in his overview of Round Rock's business model.
Crane hired former Ryan-Sanders CEO (and Nolan's son) Reid Ryan as the Astros' new President and CEO back in May. This sounds like a perfect project for him, doesn't it?
And Astro fans, because I know you're wondering, just know that Fendrick thinks that Jim Crane hit a home run in choosing Reid Ryan as the new President of the team, "A tremendous choice. The fans could have no better advocate in the front office than Reid Ryan."
Ask them their philosophy or mission, and every minor league baseball executive will give you some combination involving entertainment, customer service, and value.
But unless they are with the Dayton Dragons, they can't claim that they've successfully sold every seat since the inception of the franchise.
Yes, the Dayton Dragons, the single A affiliate for the nearby Cincinnati Reds, a Mandalay-owned franchise (same as the Frisco Roughriders) have sold out every single game since the franchise moved there from Rockford in 2000, breaking the professional sports record of 815 consecutive sellouts set by the Portland Trail Blazers.
Every. Single. Game.
When I spoke to Dragons Executive Vice President Eric Deutsch, "The Streak" had grown to 951 games with no sign of slowing down.
Simply put, to discuss the minor league baseball boom and not share the story of the Dayton Dragons is like being handed the box set for Season Three of The Sopranos and the DVD containing "Pine Barrens" is missing.
The Dragons are minor league baseball's gold standard, having won the John H. Johnson President's Trophy in 2012 for being "the complete baseball franchise — based on stability, contributions to league stability, contributions to baseball in the community and promotion of the baseball industry."
Ask Deutsch about the foundation for the team's success and on cue he lists his team's five principles that guide them: affordability, quality entertainment, customer service, community, and return on investment for sponsors and ticket holders.
You get the sense in talking to Deutsch that the organization is in lockstep, that if you passed any of the 36 full-time employees of the Dragons in the hallway, they should be able to recite the guiding principles on command.
That's how you sell out every game.
"We came out like gangbusters in the first year, but the harder part is sustaining that success, avoiding a tail-off. That's where our relationships with sponsors, groups, the Chamber of Commerce, are all so important," revealed Deutsch.
Minor league baseball has long been associated with zany promotions and sometimes bizarre but always entertaining in-game productions. The Dragons (and all Mandalay owned teams, for that matter) embrace that subculture. To that end, the team has a full time Director of Entertainment and a game day staff of 22 people whose mission is to execute the cumulative sideshow that takes place before games, after games, and in between innings.
When I brought up the long tenures of minor league baseball executives (including him) to Deutsch, he laughed and said "I love it. I've never had the same day twice."
Yep, other than selling every seat to that night's ball game. That's been the same every day for Deutsch and the Dragons.
You can set your watch to it. In Dayton, they've been pitching a perfect game for more than 13 years now.
"Hey Sean, it's Tal Smith."
In an audio lineup of Houston voices, you'd pick out Tal Smith's in about three seconds, so when the phone conversation with him begins you feel like you're hearing a chapter of Houston baseball being personally read to you on an audio book.
In the history of professional baseball in this city, nobody has worn more hats, experienced more highs and lows, than Tal Smith. He was an original employee of the Colt .45's directing their farm system, was the general manager of the Astros in the late '70s, and then returned to the club as president of operations under Drayton McLane in 1994, where he served in that capacity until 2011.
Today, Smith serves as a special adviser to the management team of the independent Sugar Land Skeeters.
A brief primer on what exactly being "independent" in baseball means:
With affiliated minor league baseball teams, the one aspect of the operation that nobody with the team is allowed to mess with is, ironically, the team itself. All of the on field personnel (players, coaches, manager) are employed by the major league parent, so as a result, everything from the players on the roster to the in game deployment of those players trickles down from on high.
As a result, the on field product can sometimes fall victim to a "greater good," with the final score of the game taking a back seat to players or pitchers being used in a rehab capacity or used to get "reps" so they can get ready for the majors.
As a member of the independent Atlantic League, the Skeeters have no MLB affiliation and thus have full control over the composition of their own roster.
As you can imagine, Smith sees this as a huge advantage for the Skeeters.
"Whereas the primary emphasis in the affiliated minor leagues is on player development, here the primary emphasis is on winning the game. For older, more experienced players, and for aspiring managers, this is a superior option," states Smith.
He points out that virtually every Atlantic League player has at least been to the AA level in the minor leagues, and about half of the players have had some taste of Major League Baseball. As a result, the Skeeters and the independent leagues have become an important avenue for MLB teams when they need a ready made, veteran hand.
That's the big difference between the Skeeters and other minor league teams in the state. The Skeeters view themselves as an affiliate for all 30 major league teams.
And oh by the way, if the chance to sign Roger Clemens for a month or so presents itself, the have the flexibility to do that, too, as they did late last season.
Now, the similarities between the Skeeters and, say, the Express or the Hooks are readily apparent to anyone who's spent an evening at Constellation Field, Sugar Land's $36 million playground, complete with outfield bar, massive playground, and, yes, swimming pool.
The Skeeters' focus on entertainment, creativity, and marketing have resulted in unprecedented attendance success, as in 2012 when they had the highest total attendance ever by a modern-day independent league team, drawing 465,511 in their first season in the Atlantic League. (In case you ever find yourself in an Atlantic League attendance trivia contest, the old record was 443,142 by Long Island in 2001. You're welcome.)
For a baseball lifer like Smith whose original job with the Colt .45's was running the minor league farm system, this new wave of majestic ballparks, these miniature versions of the new major league constructs of the 1990s and early 2000s, are what's great about the game.
"When I was getting started in the late '50s and in the '60s, the facilities were flat out substandard, for players and patrons. That's not the case any more," Smith stated proudly, perhaps briefly recalling his instrumental role in getting voters to approve the construction of Minute Maid Park.
Of course, with the Skeeters continuing to set the pace for Atlantic League attendance and with the assumption that someday the Astros will once again be drawing 30,000 to 40,000 a night (Hey, it's what I tell myself. What can I say?), the natural question is "Are there enough fans to sustain more baseball growth in the Houston area?"
Smith thinks unequivocally, yes."Look at all of the baseball in a high density area like the Northeast. You have New York, Philadelphia, Baltimore, Washington D.C., all the minor league teams for those clubs, and they continue to grow the game," said Smith.
"Houston is a great baseball town. There's room for a lot more baseball here."
I'm three tangents deep in my conversation with Andrew Seymour, and I feel like I'm talking to one of my old high school buddies. He's that engaging.
Somehow, we circle back to the reason I called him in the first place, to talk about the "Big Three" ticket promotion.
I tell him that if you Google "Fort Myers Miracle," the first story that comes up is a Yahoo! blog post about his "Big Three" promotion, and proclaim that it must make him happy to see that.
Happy? He's ecstatic.
"We are minor league baseball, so we don't have a big budget for advertising. We have to be creative, and if we are creative enough we can piggy back publicity like this. There's nothing better than coming up with that idea that hooks people in. That makes them smile, makes them chuckle."
As it turns out, Twins bonus baby Byron Buxton, the second overall pick of the 2012 MLB Draft, is making his Fort Myers home debut Saturday, and I want to ask Seymour about that.
But before I can get the words out, Seymour jumps in and tells me, "You know this Saturday we are having Craig Sager Bobblehead Night? How great is that? We have two versions of the bobblehead with two different ridiculously colored sport coats, and Sager is actually going to fly in and sign autographs! How good is that?"
"That's incredible!" I said, my Byron Buxton question completely forgotten, and my brain racing to find a way to ask for a Craig Sager bobblehead doll of my own without sounding desperate.
"Yeah," Seymour smiled. "I tell my people, this is our time. This is our time in sports."
Craig Sager Bobblehead Night at Byron Buxton's home debut on a balmy Saturday night in Fort Myers, Florida.
This is your time, Andrew.
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