Minor League Teams Tapped Up To $76.25 Million In PPP Loans, But Future Remains Dire

Minor League Baseball teams pulled nearly every lever available to them to keep their staff employed and their operations running, but with the 2020 season canceled and the imminent shuttering of some 40 clubs because of a loss of MLB affiliation, the future looks dire.

Paycheck Protection Program loan information released on Monday by the U.S. Small Business Administration, in consultation with the Treasury Department, helps paint a clearer picture of the effort by minor league baseball clubs across the country to stay afloat during the pandemic—an effort that is in stark contrast to that of some other sports and entertainment ventures.

According to Minor League Baseball, 122 teams applied for PPP assistance. Out of those, 37 were deemed ineligible because they were owned by MLB teams. One team missed the deadline but reapplied.

All-in-all, 101 teams received PPP assistance, totaling between $36.5 million and $76.25 million, according to the SBA data. The SBA did not disclose the exact amount of any loan, only a range.

That loan money was largely used to pay staff through May and June. Since then, all of MiLB’s 160 affiliated clubs, minus the Double-A Pensacola Blue Wahoos, have had to conduct furloughs or layoffs of some kind. MiLB said the Blue Wahoos had been able to avoid doing so by being creative through the use of non-baseball-related events, namely using their ballpark as an Airbnb.

“Most all of our clubs have gotten creative by trying to create non-baseball-related revenues that fit within the health and safety guidelines that affect them,” said Jeff Lantz, the senior director of communications for Minor League Baseball. “Most of our teams are really turning into events companies rather than baseball companies at this time” because of the minor league season’s cancellation.

PPP loans are to be used to cover salaries to keep staff employed and maintain business operations.

Three clubs—the Sacramento River Cats, the Round Rock Express and the Toledo Mud Hens—each received between $1 million and $2 million in PPP assistance. Most clubs—such as the Lake Elsinore Storm, the St. Paul Saints, the Frisco Roughriders and the Myrtle Beach Pelicans—received between $350,000 and $1 million. Less than 25% of the minor league clubs received between $150,000 and $350,000; those clubs included the Bowie Baysox, the Eugene Emeralds and the Sturgis Stingrays.

In a conference call with reporters last week, Pat O’Conner, the president and chief executive of Minor League Baseball, said that without some form of assistance, be it from the government or otherwise, more than half of the minor league clubs would become insolvent. While not giving exact figures, he claimed that nearly 80% of the revenues clubs captured were derived from the gate.

To add to Minor League Baseball’s grim outlook, it is all but certain that the number of MLB-affiliated clubs will contract to 120, from 160, when a new labor agreement between the two organizations is reached ahead of the expiration of the current agreement in September.

Of deeper concern is the current trajectory and uncertainty in the number of reported novel coronavirus cases in the U.S. As the country grapples with concerns over restarting school in the fall and making it through the winter months when people will be spending less time outdoors, there is nothing to say that pandemic won’t affect baseball’s ability to have fans in the stands in 2021. While no one at MiLB is publicly predicting what might occur should that scenario play out, all are very aware of the precarious economics of minor league baseball right now.

All told, 4.9 billion PPP loans had been approved to companies as of June 30, with the amount distributed at $521 billion. There is still approximately $130 billion in PPP funds available. Money has been distributed to the likes of billionaire Kayne West’s fashion company Yeezy and a business owned by the Glazer family, which also owns the Tampa Bay Buccaneers and Manchester United and is estimated by Forbes to be worth $4.7 billion.

Disclosure: Forbes Media was approved to receive between $5 million and $10 million in PPP funds, according to SBA data.