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League’s Reputation Can Be Harmed By Terminated Teams

Suspending operations for a franchise is a tough decision which means that, financially, the team is not on solid enough ground to conduct a season. This could be because of a league collapsing or an ownership dispute. But there should always be the option of oversight in order to ensure that the franchise that stops playing doesn’t cease its community engagement. Too often with minor league teams, its local community has invested money in the team itself in the form of season ticket, merchandise or mini-pack deposits. This brings up an issue that is both a league and sport level problem; one that can damage the league or sports’ reputation for many years to come.

What’s In The League Bylaws?

A league should have bylaws that protect the community from a team that suspends operations that never plays again. Leagues actually have no legal recourse to mandate season ticket holder refunds because the teams are independent-run entities and once league membership is terminated, there is nothing that the league specifically can do about forcing a refund situation. Especially if there is money left on the table that the community has provided to the team. This is a league issue of the highest importance, as the league will eventually look to re-expand to that same community down the line. Leagues should carry some type of rule that places a certain amount of the expansion money, received by the new owners, in a holding account, available only to pay off any remaining debts to corporate sponsors, city governments for rents, and season ticket holders if the franchise suspends operations or folds midway through a season.

A lot of ownership groups of minor league, independent teams, just pack up and depart. During the 1990s, this was part of the dissolution of the Western Baseball League, in which several ownership groups faded halfway through seasons, such as the Grays Harbor Gulls, which folded midway through 1998 but was resuscitated by the WBL to play the remaining schedule on the road to protect the interests of the teams left behind.

Who Are Your Owners?

Expansion was booming in the 1990s for every minor league that added several affiliates throughout that decade. But during the period when financial times started to drop into the early 2000s, so did teams that weren’t necessarily solvent. A large portion of this issue stems from a lack of league oversight into the ownership groups that were coming on board, and whether they were financially able to host a team long-term, as well as handle the expenses if the team did not make money.

In 2012, the Pittsburg Power of the Arena Football League decided to release their entire team prior to kickoff of an away football game in Orlando, Florida. All 24 players received notice just hours prior to their season opener. The team that the Power was scheduled to play, The Orlando Predators, also fired all of their 24 players. All of the former Power players had to fly home at their own expense.

Where Is The Community’s Role?

Prior to the 1990s, local communities saw a lot of minor leagues come and go. However, city and county governments didn’t have the significant investment that minor league franchises are requiring of them. Now, there are publicly-financed stadiums and arenas to consider. Especially in the case of Stockton, California, where a publicly-financed $134.5 million facilities bond in 2005 for a minor league baseball stadium and minor league hockey arena, coupled with the 2008 national economic crash, were cited as the reason for the city declaring bankruptcy.

This creates a tightrope affect for the entire league, as well as sport, should a franchise tied to city government funds then decide to suspend operations or fold outright. With so much money locked into a team’s existence, if it ceases to continue to operate, it leaves a community with a large stack of bills. This is beyond what a minor league can possibly cover, and yet so few minor leagues take a lot of care not to engage in these types of political bond issues for publicly-financing stadiums with owners that have not been fully vetted. If an ownership group wavers, after receiving such city bond considerations, it is a stark indicator that the league did not perform due-diligence when looking at them during the prospective ownership expansion process. Especially when local citizens also invest their money in season tickets for games that never occur. Few if any sports franchises are ever actively sued for restitution by the communities after suspending operations or that they leave outright, mainly because the community fears it will not receive a minor league team returning in the future, thus an empty arena sits colder, with no hope of filling it ever again.

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