Helping the minors with a major problem
Small businesses across America have been economically ravaged by the COVID-19 pandemic, but in the case of Minor League Baseball (“MiLB”), an entire industry is facing catastrophic long-term losses that will devastate our small business teams and significantly harm the communities where they play.
For the first summer in 120 years, America is experiencing a summer without Minor League Baseball. Since the majority of MiLB teams’ revenues come from ticket sales, concessions, and sponsorships that arrive only when the games are played, COVID-related restrictions on large gatherings doomed the 2020 season. As a result, MiLB teams face a minimum of 18 to 21 months without this income. The financial consequences could doom many of the 160 teams that currently exist.
Every business is important to its owners, employees and customers, but not many have an impact on the local community comparable to that of minor league baseball teams. MiLB clubs are vital components of their communities, supporting scores of local businesses, employing thousands of individuals, raising and donating millions of dollars in charitable funds, and providing millions of dollars in revenues to local government through lease payments, parking revenues, sales taxes, and utility payments.
All these economic benefits – and the social cohesion the teams and games provide — are threatened not only this year, but for the future if teams are forced into bankruptcy, insolvency or default on their obligations. And that is a distinct possibility in many cases without additional federal assistance.
The Paycheck Protection Program (PPP) provided vital interim relief to MiLB teams, but it was not designed to recoup the kind of long-term losses that MiLB is facing. And the Federal Reserve’s Main Street Loan Facility (“MSLF”), as enacted, is insufficient to ensure MiLB teams’ survival due to various restrictions.
So, MiLB has worked with House members to introduce H.R. 7023, a strong bipartisan relief package, in hopes that it will be included in the coronavirus stimulus package currently pending in Congress.
Nearly every MILB team plays in a publicly owned stadium, and municipalities rely on clubs’ lease payments for stadium bonds or general revenue. Loans to MiLB teams in this legislation would be reserved solely for defined uses such as facility rent lease or bond payments or other obligations to the state, municipal, or county governments; utilities at these facilities; employee payroll; or other obligations that, in essence, keep the lights on at minor league stadiums.
In this way, the legislation would also provide a lifeline for other similarly situated small businesses that contract with public agencies for the use of community facilities, including community theaters, and museums.
Advancement of H.R. 7023 as part of the upcoming coronavirus relief package would provide vitally needed funds to literally save MiLB and other cultural institutions, and benefit the scores of cities and towns – rural, suburban, and urban – in which these businesses operate.
As Congress considers ways to help the small businesses and communities most severely impacted by the pandemic, we urge the members of Congress to consider providing additional relief for small businesses like MiLB teams that simply cannot operate as a result of their dependence on hosting large gatherings.
Small business and towns need this help. By including the proposed loan program in the upcoming coronavirus stimulus package, Congress can ensure that these businesses still exist and that Minor League Baseball teams can offer their communities affordable, family-friendly entertainment when fans are allowed to safely return to ballparks again.
Pat O’Conner is the president & CEO of Minor League Baseball.