Minor League Baseball teams “on the brink of financial catastrophe”

The new Rocket City Trash Pandas were supposed to be last year’s breakout team in Minor League Baseball. Then the pandemic hit and forced the cancellation of all games. For the Trash Pandas, that meant its new $50 million stadium would sit empty. 

“2020 was a difficult time to start a brand new baseball team,” said Lindsey Knupp, the team’s vice president of marketing, promotions and entertainment. The organization lost millions, she said — as much as $17 million. 

“It was either shut the doors and close down and lay people off or come up with other creative ways to bring people here to the ballpark,” said Knupp.

The team’s name is a nickname for a raccoon made popular by the “Guardians of the Galaxy” movies and selling merchandise was one winning strategy. Its “Sprocket” mascot and logo of a raccoon in a trash can shaped like a rocket went viral, with $2.5 million in sales ahead of the 2021 season.  

The Trash Pandas, an affiliate of the Los Angeles Angels, also used the stadium to host outdoor summer camp, social-distanced movie nights and turned its parking lots into a Christmas lights show.  

Those moves generated enough money to keep the lights on and the team’s 30 full-time employees working.

About 120 miles away, the Chattanooga Lookouts were not as fortunate. 

They are one of the oldest teams in the minor leagues — around since 1885 — and have an aging stadium with a dated design. The Lookouts, an affiliate of the Cincinnati Reds, survived the Spanish Flu, the Great Depression and two world wars, but COVID-19 nearly ended that run. Revenue in 2020 dropped by nearly 93%.

Unlike Major League Baseball, which has a lucrative television contract, nearly all revenue for a minor league team comes from inside the stadium — ticket sales, concessions, in-stadium advertising and merchandise sales. 

Lookouts managing owner Jason Freier said his team was just trying to survive the pandemic.

“We dug a huge hole in 2020 and with ’21, I’d like to think that we were going to fill it back in. But the truth is, even this year, we’re still digging, just a little bit slower,” Freier said.

When games finally resumed this summer, masks were required for fans and many teams had capacity restraints. Revenue across the league is expected to be down 65% from 2019, according to team owners.

“They are on the brink of financial catastrophe,” said Senator Richard Blumenthal of Connecticut. “If you really want to save and salvage the ballparks and the teams, we have to come to their rescue and keep them in the game. Because otherwise, we’re going to lose an essential part of the American sports dream.”

Blumenthal is teaming up with Senator Marcia Blackburn of Tennessee to try to come in for the save. The Democrat and Republican are usually political polar opposites, but when it comes to baseball, they found common ground. Both have fond memories of taking their children to minor league games.

“You can’t go back and get that 2020 season back,” Blackburn said during a rare joint interview, adding that the teams are an important part of many American cities. “They are drivers for jobs, for tourism … this is very much a part of your local economic system in these communities.”

The senators are co-sponsoring legislation, along with Virginia’s senators, Republican John Warner and Democrat Tim Kaine, to use $550 million in unspent COVID-19 relief funds from the Small Business Administration for minor league teams in need. Sports teams were shut out of previous emergency grant programs aimed at helping live event venues like theaters and concert halls.

“Review what’s been done for restaurants and for live entertainment venues. And then here is this component that is very much a small business component. It is very much a part of what is happening in a community,” Blackburn said.

To be eligible for the Minor League Baseball Relief Act, teams had to have been in existence and active prior to the pandemic and cannot be owned by a Major League Baseball team. The grants would be capped at $10 million and be based on 2019 revenue. If there was a continued downturn, the bill allows for a second round of grants. 

California Representative Doris Matsui, a Democrat, and West Virginia Representative David McKinley, a Republican, introduced a companion bill in the House of Representatives. Democrats Susan Wild of Pennsylvania, Peter Welch of Vermont, James McGovern of Massachusetts and Elissa Slotkin of Michigan also support the measure.

Most of the 120 minor league teams have independent owners and operate as small businesses. They are in 37 states with more than 40 million fans annually, according to team owners. They also draw people to nearby restaurants and other businesses and pay about $50 million in local taxes annually. The teams help raise another $50 million a year for local charities and, pre-pandemic, had nearly 35,000 full-time employees.

“There would be a lot of us that would be without jobs,” Lookouts ticket scanner Dan Mummert said. “I think that’s important to the community, to employ people of the community. And that’s what the Lookouts do.”

For Tim Kelly, the newly elected mayor of Chattanooga, seeing his community without the Lookouts is “unthinkable frankly.”

Kelly grew up going to games and years later took his own children to see the hometown team play.

“When most people think of sports, they’re thinking of major league teams owned by billionaires. And this is not that,” he said, standing near home plate at Chattanooga’s AT&T Field. “It’s critically important to towns like ours that minor league sports survive and thrive.”

With the uncertainty surrounding the Delta variant, the Lookouts owners are looking to Washington for relief. 

“Absent this help, it’s going to take us 8 to 10 years to get our balance sheet in the state it was back in 2019,” Freier said.