Like most minor-league baseball owners of his era, Marv Goldklang bought the Utica Blue Sox in 1982 so he could be involved in professional sports.
Now, a new breed of owners such as billionaire investor Warren Buffett and former Capital Cities/ABC Inc President Daniel Burke are getting into the business for other reasons.
Minor-league baseball, which used to be a money-loser, is now a profitable business. While Major League Baseball said its 30 teams lost a collective US$519 million last year, more than two-thirds of the 120 minor-league clubs with major-league affiliations made money in 2000, the most recent year for which figures are available.
"In the major leagues, many owners just hope they don't lose any money with their clubs," said former National Football League player Randy Vataha, president of Boston-based Game Plan LLC, which advises owners of several professional baseball teams. "In the minors, you have more owners looking at how they can get a return on their investment."
Minor-league baseball, where superstars like Sammy Sosa and Alex Rodriguez started as pros, has been around almost as long as its major-league counterpart. The National Association of Professional Baseball Leagues, now known as Minor League Baseball, was formed in 1901 with 96 clubs. By 1949, there were a record 484 franchises.
While major-league expansion and television forced many franchises to fold in the decades following World War II, minor-league teams are now drawing new investors like Buffett and Burke.
Buffett is part-owner of the Triple-A Omaha Royals in Nebraska, while Burke owns the Double-A Chattanooga Lookouts in Tennessee and Portland Sea Dogs in Maine.
"There are definitely more financially sophisticated people getting into ownership," said Goldklang, the founder of MS Goldklang Inc, which owns five minor-league teams and operates three others.
Today's minor-league owners can make money because of the sport's relatively low costs -- player salaries are usually paid by the major-league affiliates -- and loyal fans who appreciate the affordable ticket prices and smaller stadiums that allow them to get closer to the players.
Goldklang says he bought the Blue Sox when he was 40 years old "because I figured maybe I could pitch" for them. While that plan didn't work out and he sold the team in 1984, minor-league baseball has turned into a profitable business for him.
He said all his teams are making money -- he won't say how much -- largely because the clubs have favorable stadium leases and successful marketing plans. His marketing chief is Mike Veeck, son of the late Bill Veeck, a former major-league owner and master promoter.
Mike Veeck is continuing that tradition in the minor leagues, where he's come up with promotions involving mimes, lawyers and whoopee cushions.
On "Lawyers Night," attorneys are charged double admission and fans are invited onto the field to resolve conflicts in a setting similar to the television show People's Court.
In an upcoming promotion, fans will receive whoopee cushions with Major League Baseball Commissioner Bud Selig's face on one side and players' union leader Don Fehr on the other.
That kind of marketing is paying off.
Last year, the 120 minor-league teams affiliated with major-league clubs drew an average of 3,738 fans a game, up 2.2 percent from 2000 and 10 percent from 1999. No figures were available for teams that play in independent leagues, which aren't affiliated with the major leagues.
The average Triple-A team, the highest rank in the minors, had a profit of US$193,000 in 2000 on revenue of US$3.1 million, according to Minor League Baseball. That was up from an average US$86,766 profit a year earlier.
Bigger profits have driven up the cost of buying a minor- league team. Triple-A teams in large media markets can cost as much as US$20 million, said Pat O'Conner, Minor League Baseball's chief operating officer. Double-A teams can cost as much as US$15 million, while the average Single-A team goes for about US$3 million.
When former Baltimore Orioles All-Star Cal Ripken Jr purchased the Single-A Blue Sox for US$3 million in February and moved them to Aberdeen, he outbid Honeywell International Inc Chairman Lawrence Bossidy for the club.
Several current owners are moving to broaden their investment. Mandalay Sports Entertainment, which owns three minor-league teams, is trying to raise US$25 million to buy five more franchises.
One of the keys to making money in the minors is negotiating a favorable stadium lease, several owners said.
Ken Young owns Triple-A teams in Norfolk, Virginia, and Calgary, a franchise that will move to a new US$28 million ballpark in Albuquerque, New Mexico, next season. Young, who owns a stadium concessions company called Ovations Food Services, convinced Albuquerque officials to fund most of the stadium, which will seat 11,000 and have 30 suites.
"If you manage it right, you can make a nice return," he said.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
SECURITY: The New Zealand and Australian navies also sailed military vessels through the Strait yesterday to assert the right of freedom of navigation The Japan Maritime Self-Defense Force on Wednesday made its first-ever transit through the Taiwan Strait in response to the intrusion by a Chinese reconnaissance aircraft into Japan’s sovereign airspace last month, Yomiuri Shimbun reported yesterday. The Japanese news platform reported that the destroyer JS Sazanamisailed down through the Taiwan Strait on Wednesday, citing sources in the Japanese government with knowledge of the matter. Japanese Chief Cabinet Secretary Yoshimasa Hayashi declined to comment on the reports at a regular briefing because they concern military operations. Military vessels from New Zealand and Australia also sailed through the Strait on the same day, Wellington’s defense ministry
RSS