Dambach’s thoughts on MLB’s contraction plan and how it affects the Spikes
By JASON DAMBACH
Special to The Express
Over the last month, reports from credible media sources have detailed Major League Baseball’s plan to eliminate more than a quarter of its affiliation agreements with Minor League Baseball teams– and in all likelihood deliver a death sentence to professional baseball in 42 communities across America by this time next year.
Sadly, we learned from subsequent reporting that the State College Spikes are included among that group of Minor League teams with which MLB no longer would like to conduct business, despite the team’s modern, amenity-rich ballpark and terrific community support.
My team. The one that I had the pleasure of running day-to-day as General Manager for six seasons, had some other level of professional involvement for seven more, and now enjoy with my family just the same as everyone else in Centre County.
A franchise that has meant so much to our community and quality of life could be gone with the stroke of Baseball Commissioner Rob Manfred’s pen if MLB, its billionaire owners, and their new-school, analytics-craved, sign-stealing club executives have their way.
This whole issue is being raised as part of the ongoing negotiations between MLB and Minor League Baseball on an extension of the Professional Baseball Agreement — the agreement that governs the relationship between the two sides and most importantly guarantees the Spikes and 159 other franchises throughout the U.S. and Canada an affiliation with a Major League team.
The current PBA expires in September 2020 so this is shaping up to be a long, ugly negotiation with nothing likely to be finalized anytime soon.
But the good news is just that — nothing is finalized and there is a long road ahead before any drastic result occurs.
So why are the Spikes even caught up in this mess?
After all, this team illustrates why Minor League Baseball has thrived in large, medium and small cities and suburbs for 100 years.
A night out at a Spikes game is not about who is playing or what the score is, it’s about a fun, affordable, summertime entertainment option for residents of Centre County and surrounding areas.
It’s about the food, the fun promotions and the opportunity to be able to say that you saw a particular player before he became a big league star.
It’s about spending a few hours with friends, about connecting generations of families, and about being the area’s largest gathering place from mid-June to early September.
And last but not least, it’s about a team that supports local charities and other non-profit organizations in the community. Last year alone, the Spikes helped generate more than $500,000 through events the club hosted at the ballpark and through monetary and in-kind donations.
The Spikes are also good for other local businesses. The team attracts visitors who stay in Centre County hotels and eat and drink in local restaurants and bars.
Busy nights at the ballpark offer business owners an effective and affordable way to market their companies and entertain customers and clients during the summertime. The team also supports local vendors by purchasing tens of thousands of dollars in goods and services.
The Spikes employ more than a dozen full-time employees, more than 100 part-timers and offer dozens of students from Penn State and other area colleges and universities with relevant real-world work experience in the sports industry through internships and other seasonal positions.
That’s all in jeopardy if Major League Baseball has its way.
What’s hardest to swallow is the fact that one of the primary reasons MLB has given for wanting to contract its number of minor league affiliations — its desire for greater facility standards — does not even remotely apply to the Spikes.
I have been assured in talking to people in the baseball industry that the Spikes inclusion on the so-called “hit list” has nothing to do with the quality of Medlar Field. The ballpark has been the team’s home since 2006 as part of a trendsetting arrangement with Penn State University and its baseball program.
Medlar Field not only remains in spectacular condition, but it has some of the best baseball amenities in the business. This includes ample clubhouse spaces, a spacious indoor batting facility with full-sized pitching mounds, modern training and weight rooms, and all the IT infrastructure necessary to compile the myriad of video and analytics that modern-day big league organizations rely upon heavily.
I can tell you from personal experience that, almost unanimously, Major League team executives, player development staffers, players and umpires who have visited the Spikes home ballpark over the years have been blown away by the quality and modernization of the facility.
I can also tell you from experience that many — I would estimate 75-80% — of the reported 120 “surviving” franchises play in ballparks that don’t measure up to Medlar Field’s baseball amenities.
It should also be noted that the Spikes are not in danger because of ownership or financial concerns.
Yes, the team runs a highly-seasonal business and operates in a market that is considered small by most standards. Like almost any business fitting that description, the Spikes deal with cash flow concerns and need to creatively manage expenses.
But overall, the team is healthy financially and its ownership, led by Greenberg, is well capitalized and have a stellar reputation in baseball industry circles.
So what is the issue then?
The potential downfall of the Spikes all boils down to the simple fact that MLB is aiming to completely eliminate the entry levels of Minor League Baseball, which is where the Spikes reside in the hierarchy of MiLB classifications.
It is the belief of big league executives that with today’s analytics, video technology and other scouting advancements, MLB can easily reduce the number of minor league players in its systems. Some organizations like the New York Yankees and the Spikes’ parent club, the St. Louis Cardinals, have more than 200 Minor League players under their control. Baseball’s argument is that many of those players have no real chance of playing at the MLB level and, therefore, too much development bandwidth is being spent on those players.
To remedy this, MLB’s solution is to chop off the bottom two rungs of the player development ladder — Short-Season Class-A and Rookie.
But what really is the extra cost? While a select handful of players each year are drafted and signed for high six-figure or million dollar-plus bonuses, Most Minor League players are working for a salary that is far below the poverty level. Spikes’ players make a mere $1,100 per month on the pay scale dictated by Major League Baseball. If that sounds bad, what about the fact that they are only paid during the 2 1/2 month season and not for off-season or spring training?
One estimate is that the elimination of player salaries and benefits associated with contracting Minor League teams, countered with a slight increase in player salaries, would save a collective $20 million per year.
That sounds like a lot of money and it certainly is. But think about this for a second: 42 communities, including State College, could potentially be stripped of their teams, leaving thousands without full-time or part-time work, and municipalities left with empty, tax-payer funded ballparks all for a per-team savings that roughly amounts to the salary of one Major League rookie.
It’s also a per-team amount that the 30 billionaire MLB owners would likely consider a rounding error on their personal balance sheet — if they’d even notice at all.
Let that sink in for a minute.
One common question I have already seen a number of times is why couldn’t the Spikes continue to operate outside of the Major League Baseball/Minor League Baseball structure?
The Spikes are privately owned, so while MLB certainly could go through with its threat to eliminate our local team’s ties to the big leagues, the club could, in theory, remain in business under a different baseball model.
While some teams affected by contraction might opt to take a swing as an independent franchise (fielding a team with local or regional players and Minor League washouts) or a college summer wood bat league team, those business models would most likely need to be undertaken by new ownership.
Current Spikes’ ownership’s business plan and financial model is reliant on an affiliation agreement with MLB and the associated cost-share model and overall structure it affords.
An independent or summer college wood bat team would almost certainly generate less interest and less revenue, have a higher cost of doing business, and require a different lease arrangement with Penn State — of course assuming the University would have an interest in a partnership with another outside entity.
So what do I think is actually going to happen?
As we have already seen this past week with the letters sent to Major League Baseball by more than 100 members of Congress and also by Presidential hopeful Bernie Sanders, the Commissioner and team owners involved in pushing their contraction plan forward are going to have to overcome resistance from federal and state lawmakers, and potential lawsuits from minor league club owners and local governments.
If there’s one major chip lawmakers have over Major League Baseball it is the threat of re-examining baseball’s near-century old anti-trust exemption and the more-recent “Save America’s Pastime Act” which shields MLB from federal minimum wage and overtime laws.
A huge outpouring of support from congressional leaders on both sides of the aisle could force MLB to back off its radical plan for contraction.
If the exertion of political pressure is successful and the contraction plan is abandoned, MLB would no doubt counter by shifting additional player development costs to Minor League clubs (It should be noted that the Spikes and all MiLB teams already pay a ticket tax to Major League Baseball in the range 8.5 to 9% of per-club ticketing revenue).
While the cost of doing business will no doubt be higher than it was previously for the Spikes, at least affiliated professional baseball as we know it will remain here in State College for us all to enjoy.
But no matter the outcome, the next nine months will be uneasy for anyone involved with Minor League Baseball and teams like the Spikes.
So what can you do?
The Spikes released a statement last Thursday re-assuring fans that the team is very much open for business for the 2020 baseball season.
Support the Spikes. If you own a business, consider purchasing season tickets for your customers or employees or advertise your business with the team. If you are part of an office, a church organization, a youth sports team or have a group that likes to plan outings together, consider doing that outing with the Spikes next summer.
Contact our federal and state lawmakers and voice your support for the Spikes and the other Pennsylvania teams affected by Baseball’s plan (Williamsport and Erie are also in danger of losing their affiliations).
As mentioned above, political pressure is the most likely reason MLB would back away from its radical contraction plan.
In the end, all we can do is hope that Major League Baseball comes to its senses and realizes that saving a relatively small amount of money now won’t be worth what it will potentially lose in the long run by taking the game away from dozens of grassroots communities like State College.
Jason Dambach is the former Vice President and General Manager of the State College Spikes and Director of Communications and Broadcasting for the Altoona Curve. He has more than 20 years of experience in professional baseball franchise operations and management. Jason currently lives in State College and is the Founder and CEO of SportStart, a sports career services and consulting business.