NJBIZ.com
Minor league general managers must be creative to attract entertainment dollars in increasingly crowded market
May 28. 2012 11:45PM
In New Jersey, the business of
minor league sports is about much more than what happens on the field, as
baseball teams that play here compete for entertainment dollars in a crowded
marketplace.
"My focus … is on everything outside of the white lines," said Will Smith, general manager and chief operating officer of the Trenton Thunder, who describes the team as "a business, really, that happens to have sport as the backdrop."
General managers say drawing families to games is vital to their business success.
"Our formula is all about affordable family entertainment," said Greg Lockard, president of the New Jersey Jackals that play at Montclair State University. "Generally, people are very interested in coming to the ballpark and having fun with their family in a safe environment."
Part of the nightly fun are the popular sideshows — sponsored and themed games featuring promotions, giveaways and special events like Scout sleepovers, firefighter nights, athlete and celebrity appearances, and fireworks. "Our fans come here because of the events," said Adam Lorber, Riversharks general manager.
Those events are of even greater importance now, as competition with movie theaters, bowling alleys and other low-cost options has gotten more intense over the past several years. But "probably our chief competition is the 55-inch flatscreen you've got on your wall in your living room," said Geoff Brown, general manager of the Lakewood BlueClaws. "We got to get you off the couch. We've got to get you outside."
The minor leagues are divided into two camps: independent teams and those affiliated with Major League Baseball. New Jersey has the BlueClaws, the Philadelphia Phillies' single-A affiliate; and Thunder, the New York Yankees' double-A club. The independent teams here are the Camden Riversharks, Jackals, Newark Bears and Somerset Patriots.
Major revenue areas are tickets, concession, and merchandise sales and advertising — and putting people in the seats is the most important aspect of business, Brown said.
"Tickets are the driver, because nothing else happens if you don't do the tickets," Brown said. "If nobody's here to see the signs, we're not going to sell any signs. If nobody is here to buy the hot dogs, we're not going to sell any hot dogs."
Brown and Smith, who buys marketing lists to target groups such as small businesses, churches and civic organizations, both said their teams' ticket sales are split approximately 40 percent groups, 30 percent package plans and 30 percent individual sales.
The upscale demographics of fans of affiliated teams — with median household incomes of $73,000 per year, versus $52,000 for all adults, according to Scarborough Sports Marketing — drive sponsorships and stadium and program ads aimed at consumers' elusive eyes and ears.
"Social media is coming to the forefront. People are listening to their iPods now. How do you reach them in the car? Newspapers are morphing into websites. Here we have a three-hour captive audience," said Patrick McVerry, Somerset Patriots president and general manager.
Larry Grimes, president of The Sports Advisory Group, which does team valuations and sells franchises, said the Riversharks — because of proximity to South Jersey's population centers and Philadelphia, and a stadium sponsorship with Campbell Soup — generate as much revenue as many single-A affiliated teams. But many markets have challenges in drawing fans, Grimes said.
"Sometimes you get into a market where fans just won't support the team, no matter what you do," Grimes said.
The Newark Bears' difficulties selling tickets — and the team's ownership changes — have been well documented over the past few years. Danielle Dronet, co-owner and CEO of the Bears, said the team has been repairing relationships with sponsors and advertisers, and since June 2011, when the new ownership took over the team, it has repaid 96 percent of the more than $1.6 million of debts it inherited.
"So if you can imagine trying to pay all of those off and also running a stadium — it is very expensive," Dronet said.
The Bears have been promoting two-for-one ticket and hot dog deals, dollar-beer nights and diamond giveaways. On opening night this season, nearly 900 tickets were sold, with another 1,200 fans attending the team's second game this year, high-water marks for weeknight games for the past two years, Dronet said.
Team general managers declined to provide financial data, but according to Andrew Zimbalist, an economist at Smith College, approximately 50 percent of affiliated teams in the country turn a profit, though independent teams have a more difficult time.
Zimbalist said owners continue on for a variety of reasons, including establishing business contacts, enjoying status in their communities and the possibility of making money in the long term.
"For a long time, there's been a trend that the asset value of the teams goes up, so even if you're not making money on a year-to-year basis, you can possibly make some money or capital gain when you sell the team," Zimbalist said.
