Baseball Miracle

Baseball Miracle

Can Fort Myers support two minor-league baseball teams? It's tough making money in that business, but the Fort Myers Miracle is witnessing growing attendance even as the economy slows.

sports business by Jean Gruss | Editor/Lee-Collier

Ray Judah, the chairman of the Lee County commission, recently defended a decision to spend millions of taxpayer dollars for a new Boston Red Sox spring training stadium, outbidding Sarasota to keep the team in the area.

That's a pretty steep price to pay for a stadium where the Red Sox play fewer than 20 games each spring. So Judah offered this carrot to a group of real estate executives recently: a Red Sox minor-league team might play in the new stadium.

Can the Fort Myers area support two minor-league teams?

Lee County is home to the Miracle, a minor-league team that is tied to the Minnesota Twins, which train at Hammond Stadium (the Red Sox train at City of Palms Park in Fort Myers). Major League Baseball won't allow another team to play in Lee County without agreement from the Miracle, to which it has given territorial rights.

"No one from the Red Sox has come to talk to us," says Marvin Goldklang, principal owner of the Miracle. He says the Red Sox, who now train at the City of Palms Park in Fort Myers, broached the subject with him in the early 1990s but they never reached a deal.

However, the Miracle recently granted permission for a Tampa Bay Rays-affiliated minor-league team to move to Port Charlotte. "Had we not granted permission, they would not have been able to do it," says Goldklang, who declines to cite the financial terms of the deal nor what it would take to grant the Red Sox the same permission.

But despite record attendance last year, Goldklang says minor league baseball doesn't make the big money that the majors do. "Many teams at our level are not profitable because they're operated by major-league teams with a view toward player development rather than operating them as standalone business entities," he says.

That makes the Miracle somewhat of an exception in the league in which they play. Goldklang and a group of investors that include comedian Bill Murray and recording artist Jimmy Buffett own the Miracle. While they won't reveal revenues or other financial information, they say the business has been profitable since the team moved to Fort Myers in 1992.

"We're not in the business of losing money, but by the same token there are a lot of things we could have invested in that had better returns," says Goldklang, a New Jersey resident who has an ownership stake in other teams, including the New York Yankees.

Making minor money

The key to making the business work is getting people to the games. Despite the recession, the Miracle reported record attendance of more than 124,700 people last year, an increase of nearly 8% over 2007.

At $5 to $7 per ticket, the cost of attending a Miracle game is competitive with the movies. "We compete with the people who cocoon, those who order pizza and take three videos home with them," says Mike Veeck, another Miracle team owner whose official title is Chief of Fun.

Once in Hammond Stadium (which the Miracle lease from Lee County), the Miracle own and operate the concessions and sell advertising in the outfield. They're known to create zany promotions to fill the stands. For example, for one game the Miracle let kids run everything except manage the infield, operate the fryers or sell beer. Once in the stadium, the team holds contests for fans in the infield between innings and sometimes has fireworks at the end of the game.

Veeck recalls how the team once organized "inventor's night" at the ballpark. He brought a medium into the infield where she held a seance to try to reach the spirit of Thomas Edison. "A thousand people were rolling around laughing in the stands," Veeck says. "She left the field in a real huff."

Linda McNabb, the president of the Miracle, came from a radio advertising background. When she joined the Miracle in 1994, the team was giving away tickets at 7-11 convenience stores just to get people in the gates. "Then, there was no value to the tickets," she recalls. "In the beginning, people said 'Miracle who?'" she says.

The Miracle also has a management agreement with the Twins to manage the major-league team's spring training. And when there's no baseball, the Miracle put on concerts, auto shows and even outdoor movies at night on a big screen.

"We have multiple revenue streams," McNabb says.

Baseball survives recessions

While McNabb believes attendance won't be materially impacted by the recession because of the reasonably priced tickets, sponsorships and advertising may take a hit this year. "We may hear 'no,' and that's OK," McNabb says. Any business related to construction and real estate is retrenching, she says.

When pressed for a 2009 forecast, McNabb says: "I don't want to jinx myself. Baseball people are really superstitious."

Still, some new and existing businesses have renewed their sponsorships, including drugstores, auto dealers, convenience stores, foreclosure attorneys, flea markets and pawnshops. And, Goldklang says: "In prior downturns, attendance actually picks up because we become a more attractive entertainment vehicle because of affordability."

One big expense that the Miracle doesn't have is player salaries. The players are drafted and paid by the Minnesota Twins. "It makes it much more difficult to be profitable if you had to pay players," Goldklang acknowledges.

The Miracle pay major league baseball a percentage of ticket sales. Goldklang won't say exactly what that amount is but notes it's less than 10% of ticket sales.

Often, the weather will determine whether a year is profitable or not. A rained-out or delayed game is lost revenue. "We've had some years when we haven't made money," Goldklang says.

Baseball town

Some observers have started comparing Fort Myers to the Phoenix area, which has seven spring-training facilities. Already, there have been reports that Lee County is negotiating with the Baltimore Orioles to play at City of Palm Park, which will be vacated by the Red Sox when they move to their new stadium in 2012.

But the Twins' spring training, with fewer than 20 home games, is not the same as minor league, with 70 home games. Spring training games regularly fill the 8,100-seat Hammond Stadium while the Miracle average 1,800 a game.

"People who own minor-league ball clubs don't do so because they think they're going to make a lot of money," Goldklang says. "It is a sound operation from a business standpoint, but they do it for the love of the game."

Goldklang says enjoyment of the game without the financial pressures of major-league baseball is what appeals to many owners. "Winning and losing is less critical at the minor-league level," Goldklang says. "Did I get involved to make money? No. Would I be enjoying it as much if I lost money? No."

For now, at least, it appears that Fort Myers will be home to one minor-league team.

REVIEW SUMMARY

Team. Fort Myers Miracle

Sport. Minor league baseball

Key. Getting people in the stadium with relatively inexpensive tickets will boost other forms of revenues, from concessions to advertising.