July/August 2015 Magazine

Sports: Cashing In on America’s Pastime

July/August 2015 Issue

Arkansas’ two Minor League Baseball teams take a different approach to getting people in the stands and staying economically viable in their markets.

Photographs courtesy of Arkansas Travelers
and Northwest Arkansas Naturals

Top photo: Balbino Fuenmayor is the Northwest Arkansas Naturals first baseman

H ave you ever dreamed of winning a clunker car? Do you know that Little Kato and Beautiful Bobby are little people and professional wrestlers? Ever sit through a lopsided baseball game and cheer for a meaningless base hit so you can use your ticket stub to buy a dozen eggs and get a second carton free?

If you answered “yes” to any of these questions, you’re likely at least a casual fan of the Arkansas Travelers or Northwest Arkansas Naturals. You also have a head start in understanding the business of Minor League Baseball.

Minor League Baseball (MiLB) consists of 160 affiliated teams that provide opportunities for player development and as a way for prospects to prepare for Major League Baseball. MiLB teams, which are organized from Class A to AAA, usually are independently owned and operated but are directly affiliated with a single major league franchise through player development contracts.

Minor league teams are also growing by leaps and bounds in profitability. Over the past two decades, Minor League Baseball has shed the dowdy garments of a sluggish novelty act in favor of the sparkling new duds of a major player in the sports business arena.

The Frisco RoughRiders of the Class AA Texas League, which also includes the Arkansas Travelers and Northwest Arkansas Naturals, sold for $32 million in 2014. Forbes estimated Frisco’s annual revenue at $9.2 million in 2013 and ranked it as the 11th-highest valued team in Minor League Baseball and the highest-valued Class AA team.


Arvest Ballpark – The Northwest Arkansas Naturals receives up to $200,000 per year for the naming rights of its home field.

Dickey-Stephens Park - Arkansas Travelers’ home field in North Little Rock opened in 2006 and is now the third-oldest ballpark in the Texas League’s northern division.

Dickey-Stephens Park – Arkansas Travelers’ home field in North Little Rock opened in 2006 and is now the third-oldest ballpark in the Texas League’s northern division.

Beyond the Win

But the business model of Minor League Baseball differs drastically from that of the big leagues. Major league franchises like the St. Louis Cardinals and New York Yankees have strong baseball teams, filled with established stars that are household names among sports fans. Minor league teams, not so much.

D’Arby Myers - Arkansas Travelers left fielder

D’Arby Myers – Arkansas Travelers left fielder

“In the front office of Minor League Baseball, you’re not making player moves,” said former Travelers General Manager Pete Laven, who now serves as president of Salvi Sports Enterprises, a Chicago-based sports consulting group that owns three independent Minor League Baseball teams. “It’s all about the business side. The No. 1 job for a minor league general manager is to be profitable. Right along with that is creating the best fan experience.”

Although the Travelers and Naturals are affiliates of major league clubs — the Los Angeles Angels of Anaheim and Kansas City Royals, respectively — the local teams have no control over the players on the field and, consequently, their ball clubs’ success. Instead of luring fans to North Little Rock’s Dickey-Stephens Park or Springdale’s Arvest Ballpark with winning baseball teams and big-name players — a crucial factor for major league teams — the Travelers and Naturals draw fans to an experience that transcends on-the-field action.

“It’s more about that carnival atmosphere around the game,” said Arkansas Travelers General Manager Paul Allen. “The difference is the ‘wow’ factor at the major league level. Minor League Baseball is much more about the fan experience at the ballpark.”

Family Affair - Both of the state’s Minor League Baseball teams offer inexpensive tickets to attract families.

Family Affair – Both of the state’s Minor League Baseball teams offer inexpensive tickets to attract families.

Minor League Baseball offers one of professional sports’ least expensive tickets. (You can attend a Travelers game for as little as $6; a Naturals game for $7.) While value serves as a major part of the equation in drawing customers to Arkansas’ minor league ballparks, the admission price gets fans much more than a baseball game.

Attendance likely will be higher than average when the Arkansas Travelers play host to the San Antonio Missions on Aug. 15, and it won’t matter how the teams rank in the Texas League standings. Fans will be at Dickey-Stephens Park to see pregame “Midget Wrestling,” a long-running Travelers promotion that dates back to the team’s days at Ray Winder Field.

The Travs’ Aug. 27 game against the Tulsa Drillers figures to be even bigger. That’s “Clunker Car Night,” when automobiles in various states of disrepair are given randomly to fans throughout the game. It typically ranks as one of the team’s most well-attended games of the season.

“Promotions are the second-biggest attendance factor after weather,” Laven said. “Whether the team’s winning or losing is way down the list. It’s all about the fan experience. They’re going to flip through the calendar for Clunker Car Night, or they’re going to go on Tuesday for $1 hot dogs.”

At Springdale’s Arvest Ballpark, fans buy tickets not only to see the Northwest Arkansas Naturals, but also to watch postgame fireworks shows on Friday nights. A popular, ongoing promotion at Arvest Ballpark allows fans to trade ticket stubs for buy-one-get-one-free coupons for a dozen eggs when the Naturals tally 12 hits in a game.

“You’ve got to provide a good fan experience,” said Naturals General Manager Justin Cole. “Winning is just the cherry on top. Even if the team loses, we want the fan to walk out of here saying, ‘I still had a good time.’”

Team Promotions – The Travelers and the Naturals rely on specialty evenings, advertising and concessions to boost their bottom lines.

Tickets, Concessions and More

From a structural standpoint, affiliated Minor League Baseball teams are built to succeed. The major league teams with which they’re affiliated pay player salaries and health insurance, and they pick up the tab for the majority of equipment costs. The big league teams’ assumption of those costs contributes greatly to their affiliates’ margins and profitability.

But the operating structure only tells part of the story. Insiders point to the proliferation of new stadiums, many of which are publicly funded, as a major factor in MiLB’s ongoing renaissance. San Antonio’s ballpark, the Nelson W. Wolff Municipal Stadium, which opened in 1994, is the oldest ballpark in the Texas League.

The Travelers opened Dickey-Stephens Park in 2006, and it already ranks as the third oldest of the four teams in the Texas League’s northern division. In addition to attracting more fans, new stadiums are equipped with facilities and amenities that allow teams to provide better fan experiences while also increasing revenue streams.

“With the new stadiums, they have the wide wraparound concourses, luxury suites, restaurants in some cases, all this room for party areas,” said Laven. “All these places for picnics and parties lend to group sales, and they’re huge. You can’t always count on walk-up ticket sales, but group sales are presold. It’s guaranteed attendance and builds paid attendance.”

Luxury suites provide another consistent revenue source. Dickey-Stephens Park’s 24 suites fetch roughly $25,000 per season, and leases typically are negotiated on a three- or five-year basis.

Attendance, thanks in large part to new stadiums, plays a bigger role in MiLB revenue than it did in the past. Teams send a portion of ticket sales to their parent major league clubs, but it’s a small share.

Bill Richardson - Arkansas Travelers manager

Bill Richardson – Arkansas Travelers manager

Arkansas’ teams, as well as minor league franchises around the country, still rely on sales generated inside the ballparks, a business model familiar to Arkansans who recall the ubiquitous discount tickets to Travelers games at Ray Winder Field. The late Travelers executive Bill Valentine basically gave away tickets and relied on food and beverage sales to produce revenue.

“In the ‘70s and ‘80s, you gave away free tickets and hoped people came to buy hot dogs and peanuts and all of that,” said the Travelers’ Allen. “You can still go to Reddy Ice and Edwards Food Giant and get discount tickets; we still want to make sure the discounts are there.”

Minor league teams also cater to families and make some revenue in the process. At both Dickey-Stephens Park and Arvest Ballpark, for example, $4 to $5 will get children a pass to jump in bounce houses and whiz down inflatable slides that are set up beyond stadium seating areas.

“It just comes down to concentrating on the fan experience,” Laven said.

Positive experiences keep fans coming back to the ballpark, and higher attendance allows teams to charge premium prices for advertising, another important component of the MiLB business plan.

“The more people you have inside the gate,” Allen said, “the more likely your sponsors are going to come back, too.”

You can’t miss advertisers’ signs in the ballpark. In addition to the long-used outfield fence signs, today’s new ballparks have concourse signs and sponsored sections of seating areas. Arvest Ballpark features the Bud Light Bullpen Cafe, the Quadrivium Home Plate Party Deck and the Jack Links’ Beef Jerky Grass Berm seating area. Stadium video boards, a technological advance, have increased advertising revenue.

“It doesn’t cost the team anything as far as production costs,” Laven said. “You get a JPEG from the business and put it up there and can get $2,000 for a 30-second commercial.”

Stadium naming rights are a consistent and long-term revenue source. Arvest Bank’s 10-year deal for naming rights to Arvest Ballpark has been estimated to feed as much as $200,000 per year into the Naturals’ coffers.

Much of a team’s success hinges on attendance, which has been bolstered by new stadiums, but general managers say they’re always trying to strike a balance.

“You have to have a good handle on how you want to run your business,” Cole said. “The whole ‘If you build it, they will come’ only holds true for a year or two. The fans say, ‘Why should we keep coming back?’ There are definitely some advantages built in to Minor League Baseball, but if you’re not doing the right things, it’s not going to last. You balance running a good business and putting on a good show.”

Vance Wilson - Northwest Arkansas Naturals manager

Vance Wilson – Northwest Arkansas Naturals manager

Strengthening the Fan Base

Minor league general managers consistently use words like “family-friendly, affordability and value.” In an entertainment climate with ever-growing options, it’s important to play to your strengths and provide something other venues can’t.

“We want to be looked at as the affordable option,” Cole said.

That means keeping ticket prices low and adding value to the experience. Sometimes it’s giving away replica jerseys and ball caps or bobbleheads. Other promotions are less traditional. The Travelers once gave away Arkansas Travelers’ wrestling masks.

“No one’s sitting on their hands,” Cole said. “You have to stay on your toes.”

The Travelers have another built-in advantage. Unlike most MiLB teams, the Travelers are owned by Arkansas Travelers Baseball Inc., which was formed in 1960 when Ray Winder led a public stock drive to purchase the New Orleans franchise and move it to Little Rock.

“It’s kind of run almost like a nonprofit,” Allen said. “It allows us to have the lowest ticket prices in the Texas League. We don’t have to have a huge profit at the end of the line.”

Most teams, including the Northwest Arkansas Naturals, don’t have that luxury.

“The goal is to continue to remain relevant,” Cole said. “The Minor League Baseball profile continues to be bigger.”

Allen said it’s a balancing act, catering to different segments of the fan base — from the hardcore fan who charts every pitch to the guy socializing with friends in the Dickey-Stephens beer garden to the families that spend more time in the ballpark’s Kids’ Korner Play Area than they do in the stands.

But it helps that many people have a visceral connection to the game. From the smell of popcorn and peanuts to the sound of a wooden bat striking a ball, the game’s nostalgia keeps them coming back to the ballpark.

“It’s like going to a carnival, a sporting event and a social outing all in one,” Allen said. “Baseball is traditional. It’s old school. The game hasn’t changed that much. It’s successful all over the country, and I think that’s because it’s a traditional American sport. We go out to the ballpark for the good times, to go back to our roots.”

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