The deadline to launch new leagues in 2014 has passed
John Dittrich has spent over 40 years as an executive at all levels of professional baseball, including three years as the Assistant to the President of the National Association of Professional Baseball Leagues (MiLB – minor leagues) and four years in the front office of a major league team (Texas Rangers). Dittrich has over 16 years as a leader in the development and launch of highly successful venues and independent professional baseball franchises around the country.
Instability in independent professional baseball has been a primary reason why affiliated minor league baseball has shunned it for the last 20 years. The “independent” brand has been tarnished by leagues and teams with poor planning. Call it “haphazard” or “failure-to-launch,” if you will.
The problem with the success of the American Association, Frontier League and Atlantic League is that it makes league creation appear easy. That is not an accurate statement at all. Yet would-be owners observe this success, see it as an immediate “flip-the-switch” solution, and set-up a website to announce their league’s launch. Even worse are the incarnations of a poor product on the field, clearly inferior, and not worthy of the “professional baseball” brand.
The “product” that I am referring to rarely has anything to do with the caliber of athlete on the field of play. Ironically, while some leagues can put forth a talented group on the field, the teams or leagues manage to lack the experience factor in a customer’s buying decision.
Wannabe baseball moguls do not understand that the “product” that they are selling is not just the baseball player on the field. It is the total experience that results in revenue in order to make the venture success. Revenue that is generated by creating fan interested in the whole product.
Announcing the formation of a team or playing schedule at a local baseball facility does not make either an independent team or a league successful. A business plan must be created, designed to generate fan interest, and bring in revenue. Everything must be in place prior to even remotely thinking about a first pitch on Opening Day.
Independent baseball start-ups continue to fail because they do not perform basic homework on what it takes to be revenue successful in professional sports. They have seen the fabulous successes such as the St. Paul Saints, Long Island Ducks, Winnipeg Goldeyes, Fargo-Moorhead RedHawks, Sugarland Skeeters or even the summer-collegiate Madison Mallards, and they have heard the famous line from the movie “Field of Dreams”, “build it and they will come.” Yet they have not done basic business planning in order to replicate this success for themselves.
American Association Commission Miles Wolff has said many times that there are four key elements required of any independent professional team to have even the slimmest chance of business survival:
No. 1 – The team must have an adequate population base from which to draw fans.
No. 2 – Teams require a professional quality playing facility.
No. 3 – Adequate financial resources.
No. 4 – An experienced quality operator.
Failure to have any or all of these four important components virtually assures that the team or league will not be successful. Should all four elements be obtained, a rock-solid business plan must also be put into place. For any successful professional baseball operation at any level, the core requirement of the business plan must be the ability to put people in the stands. While lower level teams with smaller budgets may require fewer fans than a higher level league team in the Atlantic League or American Association, even the basic operational franchises must have respectable crowds attend in order to pay the bills.
The largest factor of any franchise financial stability is ticket revenue. It is the most important revenue stream of any team, without a doubt. Attendance and ticket sales are key to all other revenue ancillaries. Empty seats evaporate corporate interest in signage or promotional sponsorship. Same goes for solid food or beverage revenue streams. Food and beverage revenue is a critical piece of a team’s revenue success. Ticket sales are critical to all other streams as well including souvenir merchandise, parking and any of the other miscellaneous ways that the truly successful teams create revenue.
None of these revenue streams are possible without a strong, year-round sales effort. Companies place their advertising budgets together in July 2013 for 2014. Franchises are required to be on the streets now to sell outfield wall signs, sell program advertising, and have sponsors who want to pay for fun giveaways and promotions. None of this happens without key meetings with prospective sponsors, putting presentations into their hands for the 2014 season.
Ticket sales is no different. Decisions about company group outings or purchasing season tickets in 2014 is happening now. Budgets don’t get reset simply because a franchise is late in getting to the right stakeholder in the company. If ticket sales reps wait until Spring to call on clients, they will hear a constant repeat of “it’s not in our budgets this year” on the other end of the line.
The Arizona Diamondbacks launched their 2014 season ticket campaign in August 2013. That means that with a full month left in the 2013 season, the Diamondbacks were selling for next year. That’s good business.
As an independent baseball operator, the requirement of seeking out professional talent on the field is difficult. Revenue creation by building up a fanbase is even harder. Without an effective business plan and solid off-season sales effort in place with a lead-time of 12 months, starting a franchise is a fool’s game. If a franchise owner cannot establish the four basic tenets required to qualify a market for an independent professional baseball team, they are burning their own money and wasting time.
The time is now to put a team in place for 2015. It may appear a long way off, but realistically, the more time that an independent operator has to develop a business plan and sales effort, the better. Otherwise, it is destined for failure.