Las Vegas isn't a typical location for a sober-minded discourse on the state of the American economy, but, then again, we aren't living in typical times.
The Sin City was the site of last month's Baseball Winter Meetings and, not surprisingly, the morbid state of our country's economy dominated the agenda. At least it did for the hundreds of Minor League executives in attendance, who despite their reputation for irreverence and originality are still as bottom-line oriented as anyone in the business world.
Accordingly, Minor League president Pat O'Conner made the economy the focal point of his opening session speech at the Winter Meetings.
"Dealing with our environment will test our mettle and require us to plan and prepare for our future," said O'Conner. "Along with our country, our industry must be prepared to meet the economic hardship and cultural renaissance that lies ahead."
Two days after delivering that speech, O'Conner elaborated on where he feels Minor League Baseball stands heading into 2009.
"We are not recession-proof, but we are recession-resistant," he said. "When it comes to the ability to withstand hard times, we have a very high tolerance. And this is because of the grass-roots nature of the industry. Our teams strive to be the pillars of their communities."
O'Conner's comment cuts to the core of the Minor Leagues' key strength. Because so many teams strive to be "pillars of their communities," they have cultivated legions of loyal customers for whom trips to the ballpark have become deep-rooted summer traditions. Not to mention the fact that when it comes to the battle for the almighty entertainment dollar, Minor League Baseball provides a nearly unbeatable "bang for the buck." Cheap tickets, frequent giveaway items, discounted food and beverage specials and an emphasis on in-game fan entertainment are all par for the course.
Finally, the Minor Leagues have a well-deserved reputation for creativity, so front offices across the country will find their own unique ways to adapt. At the very least, get ready to see "Fan Bailout" nights on promotional schedules all over the country.
Finding Ways To Adapt
While it's important to tout the Minor League's potential for success amidst an otherwise gloomy atmosphere, teams are nonetheless dealing with some difficult situations as a result of the economy. The most common challenge teams are facing seems to be maintaining existing sponsors while recruiting new ones. Many sponsors (car dealerships and banks, most notably) are cutting back on their advertising budgets, and are therefore less willing to do business with Minor League teams.
"On the corporate side, we're not dealing with a mass exodus of our clients, but it has definitely slowed," said Charleston RiverDogs GM Dave Echols. "We are open-minded in regards to what are clients are facing, and we'll work with them in order to figure out ways to make things work."
"Sponsorship sales are definitely slower than they have been in the past," said Scott Carter, the Fresno Grizzlies' vice president of marketing. "Therefore, we need to be as proactive as possible and tell our clients how we're going to provide extra value before they even ask for it. Everybody's on a budget now, so we have to work hard in order to make sure we're not expendable."
One of the Grizzlies' main strategies for illustrating their value is to point to the health of the team, and of Minor League Baseball in general.
"The product is affordable, and we've posted an attendance increase three years in a row," said Carter. "We've created a ballpark experience that makes fans want to be here, and that's the message we're taking to our sponsors -- we're confident that our day-to-day business is not going to drop. There aren't many other advertising mediums that can realistically say that."
Similarly, Rob Hackash, the director of media relations for the Reading Phillies, feels confident that his team will be able to withstand sponsor's budget cuts.
"The corporate world is being more cautious as to where they're placing their advertising dollars and Minor League Baseball is still a great place to allocate that money," he said. "Their messages are still getting in front of a lot of eyeballs, which is more important in the DVR world we now live in."
Nonetheless, the budget constraints of some sponsors may be too great to overcome. In that case, teams need to think creatively in order to recruit new corporate clients. In the current economy, the best bet might be to target other similarly "recession-resistant" industries.
"Since the offseason began, I don't think we've had a sales meeting that hasn't began and ended with the question, 'Who do we feel is benefiting from the current situation, and how can we go after them?'" said Echols.
Raising the Bar
Unfortunately, proactive thinking and an optimistic attitude can only go so far. Most teams will be unable to reel in as many advertising dollars as in years past, and this will have a trickle-down effect on other aspects of the fan experience. Nowhere was this more apparent than at the annual Winter Meetings Trade Show, where vendors were pitching their products to teams who weren't very eager to open their wallets.
"My business is directly sponsor-related," said Marc Simone, who, as the vice president of marketing and sales for Coyote Promotions, is responsible for creating and selling a wide variety of fan giveaway items. "If I show a team's promotions director a new item, it doesn't matter how much he likes it ... if he doesn't think he'll be able to get someone to sponsor it, then he's not going to make the purchase.
It's very concerning, because we're in the dark. We don't know first-hand what each team's situation is. We just try to convey the message that if you spend your money on something smart, then you're going to stand out even more."
Simone notes that the souvenir items that have been faring well are those with a per-unit price of $1 or less, such as flipbooks and playing cards. More high-end souvenir items, such as bobbleheads, have been a tougher sell. And, like everyone else, he is finding creative ways to deal with the situation.
"There has been a focus on custom calendars, because each month can be tailored to a different sponsor," he said. "So even if a company can't afford to sponsor an entire night, you can divvy it up, get a dozen different sponsors, and keep everyone involved in some capacity. The bottom line is that sponsors don't want to totally cut out their advertising budgets, because then once the economy turns around no one will remember who you are."
Meanwhile, Jason Klein of Plan B Branding (a logo design and "ideas" company with a prominent presence at the Winter Meetings) offers a more forward-thinking take on the whole situation.
"Teams need to get more creative when it comes to integrating sponsors into the game experience," he said. "No longer can you have a between-inning contest like 'Sumo Wrestling sponsored by Pepsi.' Now, you have to take the message the sponsor is communicating and help deliver it to the audience like a live commercial. For example, if AT&T is a sponsor and they're 'Raising the Bar,' then you have to find a way to incorporate that theme into the entertainment."
Everything's Gonna Be Alright...
Of course, the most crucial aspect to the success of a Minor League Baseball franchise is fan attendance. Despite (or perhaps because of) the current economic situation, that's one area in which teams are expressing optimism.
"Of course our fans are affected by the economy, but we want the ballpark to be a bastion, where they can get away from the daily grind," said Carter. "That's the message we're going to be conveying to the community -- that the Grizzlies provide a fun experience no matter what."
And that's the point -- with discretionary spending down across the board, truly affordable entertainment will become an increasingly valued commodity.
"[People] are going to want family time or some sort of escape, and an R-Phils game is a very affordable way to do that," wrote Hackash. "I think families that are tightening their belts might take in an extra ballgame or two in place of their typical week at the shore. And for every company that's cutting back on entertaining their employees or clients via group outings, there's another one out there that's cutting back more expensive perks and is suddenly in line for [a group outing at an R-Phils game]."
Befitting one who deals with a wide variety of individuals across the industry, Klein spoke with great confidence and enthusiasm in regards to the 2009 campaign.
"The Minor Leagues are sports, comedy and food, all at once," he said. "Not everyone will be able to agree on the same movie, but they can agree on that. I think Minor League Baseball is going to have a banner year."
Benjamin Hill is a contributor to MLB.com. This story was not subject to the approval of the National Association of Professional Baseball Leagues or its clubs.