Following the announcement that the 2020 MiLB season would be canceled due to the COVID-19 pandemic, the President & CEO of Minor League Baseball Pat O’Connor took questions from the media for roughly 35 minutes. During the press conference, O’Connor hit a number of topics including why the decision was made, the future of Minor League Baseball, and the PBA negotiations.
“I think there is no question that this will forever change the way we do business,” said MiLB President and CEO Pat O’Connor. “I think those changes are not all going to be negative. I would like to think that coming out of this we will have a greater appreciation for what we do have as owners, as executives, as fans, as a communities.”
Here are the highlights:
On financial health of clubs…
“Each club is different,” said O’Connor. “But overall, we are in need of some help.”
Minor League Baseball has lobbied Congress in an effort to have government intervention to help support minor league teams during this time. A companion bill is expected to be introduced in the Senate shortly according to O’Connor.
“We just need a lifeline to get on the other side of what is a national crisis,” said O’Connor on the bill that is before Congress.
Many of the minor league ball-clubs qualified and applied for PPP funds through the Federal Government but those funds are only a short-term solution as clubs are now going to be without games until 2021 at the earliest.
“That was a band-aid on a hemorrhaging industry,” said O’Connor on the PPP funds. ” We are just treading water. Trying to steer our way through this. But we are looking at some cases, 17 months with no revenue to speak of.”
A lot of minor league clubs have gone through multiple rounds of furloughs to their workforce and with the announcement on Tuesday will likely lead to more furloughs, lay-offs, and other financial fallouts.
How may clubs could fall…..
This is a to be determined question-based on the full impact of COVID-19 and the future of the PBA being a relative unknown at this time. Both are really out of the control of MiLB. O’Connor noted that all clubs are affected, even clubs who in the past have had been very strong clubs from a business perspective. O’Connor estimates that half of their clubs may not be able to survive without some form of government intervention or another form of aid.
“This is the perfect storm that we are on,” said O’Connor. “There are very many teams that are not liquid, not solvent, not able to proceed under normal circumstances. And these are not normal circumstances given the PBA and uncertainty of the future for some of these ball-clubs.”
“Without government intervention or without doing something to take on equity partners you may be looking at half of the 160 that are going to have serious problems,” said O’Connor.
How long could this impact linger….
O’Connor says he could see this lingering into 2022 or even 2023.
Was there alternatives…..
MiLB did discuss alternative plans to bring baseball to fans in 2020 but the spike of COVID-19 in the past ten days paired with the gameday revenue being such a large portion of their overall portfolio made those plans infeasible.
“Our model is based on fans in the stands,” said O’Connor.
One of the ideas that had been floated around was a few teams returning to play and then have those games streamed just to get the product to their fans. But the reality of different policies for different jurisdictions and the financial cost to do things safely were insurmountable.
“This has been months in the coming,” said O’Connor. “This is kind of like the epitome and realization of where we are and what is in front of us.”
On potential of shuffling of minor league structure….
Negotiations on the PBA have slowed down as MLB tries to get their own season off the ground. No real update for about six weeks according to O’Connor. The deal expires at the end of September and MiLB is hopeful to have a new deal in place in 90-days but given the uncertainty there isn’t too much concern yet.
O’Connor noted that the last time there was a tough negotiation with MLB the deal wasn’t reached until December.