Minor-League Ball Poses a Major Business Challenge

By Renuka Rayasam
U.S. News & World Reports

The chance to be in the local newspaper every day is the kind of exposure any small company would love to have. But for a Minor League Baseball club, the Sacramento River Cats, publicity is just another part of the job. Team President Alan Ledford likens running a minor-league team to managing a mom and pop grocery store. “We just happen to operate on a higher-profile plane,” says Ledford, who came to the organization in 2002 after working at its major-league parent, the Oakland A’s. “A widget-making firm of the same size wouldn’t be in the papers all the time.”
The River Cats, of course, don’t sell widgets. They sell entertainment-with a few caveats. Unlike major-league teams, which can rely on their records and rosters to entice fans to buy tickets, minor-league clubs often don’t have much of a say over who is on the field on any given day. The River Cats are a Triple A franchise, the final stop for good ballplayers on their way up to the majors, and a way station for injured and waning players.

Service. That means minor-league teams have to work harder at selling the “entire experience” of coming to the park, says David Carter, executive director of the Sports Business Institute at the University of Southern California. Like other local businesses, “they have to pay so much attention to customer service and community relations,” says Carter.

No team does a better job of filling its ballpark than the Sacramento River Cats, a leader in minor-league attendance for the past seven years. “When you go there, you feel special,” says Pat O’Conner, chief operating officer of Minor League Baseball. “It’s a gem in our system.”

Owner Art Savage bought the team in 1998 and moved it to California from Vancouver, British Columbia, in 2000, after building a new 14,414-seat riverfront stadium. Savage financed the $40 million Raley Field using local bonds that the team will repay over 30 years. That has forced the River Cats to be more vigilant about maintaining a profit.

“We’re constantly seeking to innovate and add new elements to the experience,” says Ledford. The River Cats face the same challenges of other local enterprises, from bad weather to drumming up business during economic downturns. “We give you a lot of reasons to come to an event here,” says Ledford. “It provides an affordable alternative to other outings you may take your family, date, or client to.”

The intimate ballpark sports views of the city’s Tower Bridge and downtown. For $6, the lowest ticket price, visitors can picnic on the outfield lawn, or for $875, a party of 16 can watch the game from a luxury box. This year, the team will add a second party deck behind the left-field fence where groups of up to 120 can enjoy a catered meal with the ballgame. It has also added a sunscreen to shield fans on the first-base side of the park from the hot Sacramento Valley sunsets. Raley was the first minor-league stadium to offer free wireless access.

The team works hard to keep the park filled during the off-season. The River Cats’ staff of 55 organizes events such as Rhythm and Ribs, a food and music festival, and hosts concerts and corporate meetings. The team even rents out its field and guest services staff. Baseball, though, still makes up more than 90 percent of River Cats sales.

Revenue of the 160 minor-league teams is up 66 percent over the past eight years, O’Conner says, as most have upgraded their parks. More people come to games just to hang out. The River Cats estimate that hard-core baseball fans fill only about half their seats. “Fans may not know the score or even who has played,” O’Conner says, “but they know one thing for sure: They had a great time.”

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