Nov

16

Why a Bad Economy is OK for the Cape League

Posted by Greg | Filed Under News | 15 Comments

The economy has led to a soggy outlook in sports.

The economy has led to a soggy outlook in sports.

Sports are generally what you get when you read the sports page. But these days news about the economic downturn (we will refrain from calling it a collapse) has migrated from the business page to the front page and now to the sports section.

News reports in recent weeks from The New York Times, The Wall Street Journal and elsewhere predict impacts in sports that range from small to dramatic. Support for new stadiums may decline and marketing deals to name those stadiums also are slowing.

Will the economy impact the Cape Cod Baseball League? I don’t think so. At least not very much.

The Cape League operates in a niche that, in my view, is largely recession-resistant. Its teams have small, efficient front offices, therefore, they have low overhead expenses. There are no expensive player or coaching contracts. The ballparks are sized appropriately to consumer demand and they are multi-use facilities so others can share the cost of capital and operations, unlike a Yankee Stadium or Fenway Park.

Most importantly, the Cape League is situated in one of the most affluent tourism locations in the country. Those who can afford to vacation on Cape Cod, are unlikely to cancel vacations and long weekends on the Cape. Further, how many regions of the country have the baseball fan base of the Red Sox Nation? These people are going to the Cape and they are going to watch local baseball (while also tuning into the Sox game!)

And another thing. In rough economic times, people want cheap entertainment, and they don’t want to travel far to get it. Where else can you see future major leaguers run around the bases in your town for almost nothing?

Sponsors are mostly home-grown. In other words, advertisers from the town know that a dollar spent in the local ballpark is reaching the intended audience.

There are areas, however, where an economic downturn can hurt the league and teams. Capital projects, like new ballparks or expansions, may be put off or even cancelled. If a team is for sale or anticipating bringing in new owners, those plans could end up on ice until things improve.

Under Armour, a big Cape sponsor, is an industry leader. While it’s a consumer business that almost certainly will feel the decline in consumer confidence, their investment in the Cape League’s All-Star game is a smart one. I would anticipate they increase rather than decrease their visibility.

Look for me next summer along the baselines. I’ll have an extra hot dog and a brand new Anglers cap.

Comments

15 Responses to “Why a Bad Economy is OK for the Cape League”

  1. Andrew on November 16th, 2008 3:25 pm

    Good timely post, Greg. I think there could also be some impact to volunteer time commitment and merchandise sales, but I agree with you that the CCBL is overall very safe. Cape games are much cheaper entertainment alternative on summer evenings than going to the movies, shopping, or fine dining.

  2. CapeMan on November 17th, 2008 6:45 am

    This will be interesting to watch. I think a large majority of the fans are regular Cape visitors that either own second homes or live here regularly so I think they’ll still come.

    Where it could hurt is merchandising, 50/50 raffle, etc….things that people may think twice about before reaching into their pocket. I could also see teams affected by a smaller pool of sponsors and/or the amount of sponsorship money a business is willing to donate. I think the larger league sponsors will be largely unaffected but it is the smaller business sponsors that pay for ads in media guides, donate giveaways, etc that could really affect the team’s fundraising.

  3. Wille on November 17th, 2008 10:07 am

    CCBL baseball might even thrive more since it is part of Americana, and in tough times, people seek out the simplest and cheapest form of entertainment. What they miss out on in tourism could be made up for with more local attendance.

    It may be tougher for some player families from across the USA to make the trek to the Cape so more web video broadcasts would be nice.

    I am surprised that some cable network hasn’t picked up on televising the entire CCBL “game of the night”. It could be marketed as a Futures sneak peek and generate revenues for the league, the NCAA, and the CC area??

    They broadcast Poker on ESPN

  4. Greg on November 17th, 2008 11:08 am

    It was after I first saw a broadcast of poker on ESPN that I realized they might actually broadcast an episode of paint drying on the wall.

    Good points.

  5. CapeMan on November 17th, 2008 2:37 pm

    You don’t even get nationally televised, regular season college baseball or minor league baseball games on ESPN. (maybe ESPN-U) There is simply not enough national interest to broadcast the CCBL.

  6. Wille on November 17th, 2008 8:19 pm

    Capeman………..just random thoughts. Anyway, the majority of college players are not pro prospects. Even with metal bats.

    As you know, the CCBL attracts those that are!

    About 7500 players from all levels of college baseball get a summer assignment from about a pool of about 50000 eligible players, or about 15%. The Cape share is the top 1/2%.

  7. Backstop on November 18th, 2008 9:47 am

    Greg, if you worked with an individual franchise (realizing that a team’s lifeblood is fundraising), you’d be more concerned about how this economy affects the Cape League. The league may be ok, but some of the franchises are going to have a tough go of it this year.

  8. Greg on November 18th, 2008 3:18 pm

    I agree with you, Backstop. It’s a good point. I do work with nonprofits and so I am sensitive to how hard it is to raise money during down times. My post was argue that fans will continue come (and pay), and sponsors should continue to see an investment in their home team as one of the more valuable investments.

    I don’t disagree that medium and larger donations will be more challenging.

  9. Wille on November 18th, 2008 3:33 pm

    Well, as teams in MLB pony up XXX million dollars to certain individual players, you would think they can spare an additional dime more to one of their feeder systems?

    Is any one MLB player really worth $41,667 per plate appearance?

  10. Greg on November 18th, 2008 3:37 pm

    Depends on whether you are asking a philosophical question. No. Or an economic one. Yes.

    If fans are willing to pay high ticket prices and sponsors are willing to pay high fees, do you want to the players to reep those revenues or the front offices?

    Worth is in the eye of the beholder, I guess, and fans continue to value that plate appearance pretty highly.

  11. Wille on November 18th, 2008 4:28 pm

    Greg, then its OK to pay $4.50 for a 10 cent hot dog and $7.00 for a watery beer?

    Chances are there won’t be many willing fans able to pay that premium anymore.

  12. Andrew on November 18th, 2008 9:36 pm

    Regarding fan donations, the economic downturn could lead to more fans seeking free entertainment and hence more smaller donations and merchandise purchases. I don’t know if I really see that happening, but it’s a possibility.

  13. Dave on November 18th, 2008 11:15 pm

    I don’t know if it’s “OK” to pay $4.50 for a hot dog or $7.00 for a beer. For me, it’s not OK. I won’t do it. Of course, I can’t go to a game at Fenway Park anymore unless “freebies” somehow come my way. Having said that, a lot of people seem to feel differently. Fenway has been sold out for every game since May, 2003, and with no sign that that streak will be coming to an end anytime soon, a lot of people will be paying those prices at the concession stands.
    I don’t know where the astronomical costs to fans will end. Every so often there is talk of a fan boycott in some city. It never seems to materialize; or if it does, it’s a feeble attempt that lasts for one game when a few hundred fans get up and leave in the third inning as a sign of protest.
    Maybe my view is skewered by living in the heart of Red Sox Nation where the Red Sox don’t need to do any promotions to fill Fenway. Some people go to a game for the “Fenway experience” as much as to see the Red Sox play. A game at Fenway is almost like another stop along the Freedom Trail. I know it’s different in Pittsburgh or Kansas City.
    As for Wille’s other point, I think MLB should be ashamed of themselves. With their minimum salary increasing to $400,000 for 2009, that means MLB’s $100,000 contribution to the Cape League is exactly a quarter of what the 25th man on some rosters will earn. As one example, the Texas Rangers paid Luis Mendoza four times what MLB contributed to the Cape League and Mendoza finished 2008 with a record of 3-8 and an 8.67 ERA. Hmmm… let’s see… one team pays someone 400K to produce that record, but the league can only come up with 100K to help support a summer league that has produced so many major leaguers. Doesn’t seem to make much sense to me.

  14. Wille on November 19th, 2008 10:11 am

    Dave……I agree

    Look at it this way. The CCBL is a place where every attempt is made to attract the best projected college talent to oppose each other. Other than USA snatching up some of the players with red-white-blue and games in Eastern Europe??, the CCBL provides a venue for MLB to observe arguably the best versus the best.

    What better way to gauge talent! This has a tremendous value to them and worth more than $100,000……should be per CCBL team.

    Naturally, increased support should extend to all the collegiate summer leagues who run not-for-profit also.

  15. Wally on November 20th, 2008 4:52 pm

    I agree completely that MLB should contribute more to all summer leagues, especially the Cape. The Cape is a free proving ground for MLB and I am sure that they have saved a lot of money by looking at prospects in the Cape that have not fared as well as expected. As far as the Cape being Economy Proof, I am not sure if anything is completely safe, but the Cape is about as safe as any industry or business in the Country. The economy will not bother the Cape, it will probably add to it based upon the entertainment value provided by the Cape. I cannot think of anything that provides more bang for the buck than the Cape.

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