Minor League Baseball warns of financial doom after 2020 season canceled

Professional baseball — the major and minor leagues — was shut down in March because of the COVID-19 pandemic. The minors will not crank back up in 2020; their season was canceled Tuesday.

The effects of the shutdown could be felt for years, in the view of minor league leadership.

The president and CEO of Minor League Baseball, Pat O’Conner, told reporters Tuesday that more than half the teams affiliated with MLB could be forced to sell or go out of business without additional financial assistance. He used the phrase “dire straits” to describe the situation.

“This is the perfect storm. There are many teams that are not liquid, not solvent,” O’Conner said, per Baseball America executive editor JJ Cooper.

“I could see this lingering into 2022, 2023, easily. In some cases, possibly a little longer,” O’Conner added, per Cooper. 

Individual minor league clubs have received federal COVID-19 small-business loans since the shutdown, but the industry as a whole is running short of cash without games to host. MiLB teams’ primary revenue sources are ticket sales, concessions, merchandise and sponsorships. That money covers operating expenses that MLB clubs don’t pick up in an affiliation arrangement. MiLB clubs are holding non-baseball events to reduce the shortfall.

Costs have been at the heart of ongoing negotiations between MLB and MiLB on a new Professional Baseball Agreement (PBA). The current pact is set to expire in September. MLB has threatened to reduce the number of its affiliations with MiLB teams from 160 to about 120 beginning in 2021. The cuts would come mostly from the lowest rungs of the industry: short-season Single-A and rookie-level ball.

MLB has floated a so-called “dream league” of clubs that lose their affiliations, but O’Conner has been fighting to maintain the status quo. He said Tuesday that negotiations had slowed to almost a halt because of the pandemic and MLB’s need to focus on starting its own season, but he expects some type of contraction being agreed to, reports Eric Fisher of SportsBusiness Group.

 

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