A potential sports financial fiasco in the making just north of the New Jersey-New York border
MONDAY, 19 JULY 2010 08:27
BY EVAN WEINER
THE POLITICS OF SPORTS BUSINESS
About eight miles north of the New Jersey-New York border after Chestnut Ridge Road in Montvale turns into Route 45 in New York State (near Exit 12 of the Palisades Parkway), there is supposed to be a baseball park built by June 6, 2011. The Town of Ramapo, (New York) Supervisor Christopher St. Lawrence has decided that his town needs an independent baseball league team in the financially challenged Can-Am League.
Ramapo needs something to distinguish itself from other New York City suburban communities in St. Lawrence's thinking and a money-losing stadium hosting a team in a shaky independent baseball league with baseball players who were stars in high school or college or older players who have been in the Major Leagues but have been injured or past their prime with virtually no chance to make it to "The Show" is just the thing.
The Cam-Am League has six (two from New Jersey) teams playing in 2010. St. Lawrence wants to see Ramapo included as the league's seventh team in 2011 and he has authorized the town to build a $25 million ($16.7 million for the stadium the rest for land acquisition), 3,500-seat park for an owner who wants to cast his lot in a league that doesn't seem to have too many fans. According to the Can-Am website, the league's attendance through July 17 should cause Town of Ramapo residents real concerns as they are the ones who will pay for St. Lawrence's dream.
The Quebec City-based Capitales have had the most customers so far this year with 69,735 tickets sold in 23 dates or about 3,031 a game. The Jersey Jackals, a team that plays games at Yogi Berra Stadium on the grounds of Montclair State University, have sold 46,779 people in 22 openings or an average of 2,126 a date. In Brockton, Massachusetts, near Boston, the Rox franchise is nearly on par with the Jackals in getting fannies in the seats. Brockton has attracted 49,162 people in 24 games or an average of 2,048. In Worcester, Massachusetts, the Tornadoes team has played 23 home games and has sold 43,111 tickets or 1,874 a game.
The Augusta, New Jersey-based Sussex Skyhawks have had a difficult time selling tickets since the team began in 2006. This year the team has played 22 home games and has drawn just 40,513 or an average of 1,841 an outing. The team's attendance has dropped every year since 2,006.
Pittsfield, Massachusetts's Colonials franchise has played 19 home games and is averaging 870 tickets sold per game. Colonials baseball has drawn 16,532 fans this year.
This is the grim financial picture of the league that St. Lawrence wants his taxpayers to invest in by building a stadium for prospective owners. As St. Lawrence was making his push to get a stadium funded and a prospective owner, the East Ramapo School District (which is part of the Town of Ramapo) was making plans to lay off workers and was closing a school, the Hillcrest School which is not far from where the stadium with a promise of a few minimum wage per diem jobs will be built.
St. Lawrence has not yet used the old bromide that the stadium will be an economic engine and a job creator. Can-Am League players don't get paid much money either. Independent baseball differs from minor league baseball in a significant way. Major League Baseball teams pick up the salaries for managers, coaches, players and trainers in the farm system which eliminates a significant payroll item for owners, in the independent leagues, owners pay for everything. There is a tight salary cap in the independent leagues.
The Can-Am League has a long list of defunct teams: Atlantic City, N.J., Elmira, N.Y. (Elmira lost an affiliated baseball team after Major League Baseball in 1990 took a look at minor league baseball parks and established new guidelines for affiliated teams that demanded minor league team owners or local municipalities spend hundreds of millions of dollars across the United States and Canada to upgrade existing minor league facilities or build new ones. Elmira's local officials said no and Elmira lost a New York Penn League team – Elmira was a Baltimore Orioles affiliate for years and one of the team's managers was Baseball Hall of Famer Earl Weaver – Elmira has been on the outside since the 1990 Major League-Minor League Baseball agreement.), New Hampshire (Nashua), New Haven, North Shore (Lynn, Ma.) and Ottawa, Ontario.
A 2005 team was support to play in Bangor, Maine. That franchise became a road team known as the Grays and folded with Elmira after the 2005 inaugural Can-Am season. The league had 10 teams in 2007 and has lost 40 percent of the league members since then.
But St. Lawrence is moving ahead and has signed a memorandum of understanding through the not for profit Ramapo Local Development Corporation and Bottom 9 Baseball, LLC. The document is not a binding legal paper but it lays out what is ahead for Ramapo taxpayers and the baseball team owners. RLDC and Bottom 9 Baseball have 18 months to finish a deal after the clock started on June 4, 2010. It is not as though Ramapo had many suitors at the town's doorstep for the new stadium. It is going to be a tough go for anyone to sellout a 3,500-seat baseball stadium in Ramapo and in the "secondary" markets of Rockland and Orange Counties in New York and Bergen County in New Jersey.
The contract between the town and the team will be for 20-years, which is quite a stretch considering the Can-Am League is just playing a sixth season after reorganizing following the failure of the Northeast League. The Northeast League began in 1995 and merged with the Northern League in 1998. The two groups split after the 2002 season.
The league has never enjoyed financial stability in 16-years of various incarnations.
The Ramapo-Bottom 9 Baseball deal could fall apart on August 15, 2010 if a number of conditions have not been met. Ramapo and RLDC have to find money to support the construction (with or without Ramapo taxpayers' approval) and have to get all the necessary land approvals. Lawsuits could delay or scuttle the project entirely. Bottom 9 Baseball also has to be in a league by October 8, 2010.
Assuming Bottom 9 Baseball gets into the Can-Am League (and pays a million dollars or so for that right) and is set to go and Ramapo or the RLDC gets the stadium funding together, the new facility will be built over the winter and will be ready to open on June 6, 2011. Bottom 9 Baseball will be throwing a million dollars or four percent of the estimated costs into the venue. The team will pay $175,000 a year in rent. It would take more than a century for Ramapo to get back the construction costs at that rate. The team threw a couple of bones to Ramapo. The municipality will get a dollar for each ticket sold (not including those seats in the stadium's 20 luxury boxes – the town will get some money from those seats and some money from the sale of the stadium's naming rights. What are the odds that a Ramapo Stadium can get any money for naming rights when the New York Giants/Jets Meadowlands Stadium, the Dallas Cowboys Stadium and the Golden State Warriors facility are still unnamed?)
The team will give Ramapo two dollars from each car parked in the stadium's lot for a game. The town will also get 10 percent of the concessions whether it is food, beverage or merchandise sold at the stadium. The team will keep signage rights in the building. Based on Can-Am League attendance figures, the Town of Ramapo will get somewhere between $3,000 and $4,000 a game if the town and team is lucky.
Revenues will come in at $500,000 and that is a big maybe from games in real world projections not Town of Ramapo hired economist projections.
Ramapo taxpayers better understand that this stadium will be a loss leader no matter what both sides say. Ramapo officials think the team will bring in $900,000 in stadium related revenues. The bad news, the revenues figure is grossly overstated, the good news for Ramapo is that at this point they are not being asked to pay the team's expenses like New Orleans and Indianapolis and Glendale, Arizona residents are doing for pro sports teams. The bad news is that Ramapo will have to find money somewhere to pay from the annual $1.3 million stadium debt. That money won't be coming from local college baseball teams (Rockland Community College, St. Thomas Aquinas College and Dominican College) or high school baseball or stadium concerts, as the seating capacity is too small for anything but small acts.
There is also a question of infrastructure (road repairs, sewer installation and other improvements) and other costs including police. Can the area also handle game day traffic, although that would seem to be a moot point considering the lack of attendance in the Can-Am league? (Cars used to back up on Route 59 for the old Rockland Drive In Movie and clog traffic for an hour back in the 1950s into the 1970s on rare occasions.)
Another question that should be answered: Who is paying RLDC's legal fees? St. Lawrence or the town?
There is also a clause about radio and TV and how Ramapo and the RLDC will get some advertising money from broadcasts and telecasts of the team. Many Major League Baseball teams, National Basketball Association, National Hockey League and National Football League teams have revenue sharing deals with local radio stations and a radio network. Ramapo has two radio stations.
There is a major radio problem, the stronger signal of the two Rockland radio stations (a 1,000 watt daytime) broadcasts in Polish and the other is a 500 watt station daytime that doesn't cover the entire county. Most games will be played at night when the station's signals are diminished under rules established by the Federal Communications Commission. The money that can be charged for a commercial on a small radio station for an independent baseball league team might amount to tip money at a local diner.
There is always Internet radio.
Unless some local access cable TV company wants to put some games on TV, there will be no TV. The affiliated Brooklyn Cyclones franchise in the Short Season A Ball, New York-Penn League is owned by the New York Mets and there are a couple games on TV on SNY and maybe a game here or there on WFAN. The Yankees' Staten Island affiliate in the New York Penn League is on the YES Network once in a while or a blue moon, whatever frequency is less.
The terms of the Ramapo-Bottom 9 Baseball agreement heavily favors the baseball team which is not surprising.
If the stadium is not done by June 6, 2011, Ramapo will pay Bottom 9 Baseball a penalty of $2,500 a day for every day the stadium is unusable or up to $175,000. If construction of the stadium starts and Bottom 9 Baseball cannot get into a league, Bottom 9 Baseball has to give Ramapo $675,000.
If the stadium isn't built and the RLDC and Bottom 9 Baseball have an agreement and the agreement is canceled out because there is no stadium by September 30, 2011, Ramapo taxpayers are on the hook for $500,000 as a penalty for Ramapo not living up to the contract.
Bottom 9 Baseball gets exclusive use of the stadium 85 days a year, which is the summer when an outdoor stadium in the northeastern part of the United States should be most utilized. Ramapo gets the stadium 280 days a year, mostly in the winter.
There is a high baseball team mortality rate in the Can-Am league. Chris St. Lawrence probably doesn't want to know all of this but Ramapo residents should. Independent baseball teams have had a tough time in New Jersey, and now the malady is spreading a bit north of the New Jersey border into Ramapo, New York.
Evan Weiner is an author, radio-TV commentator and speaking on "The Politics of Sports Business." He can be reached at firstname.lastname@example.org
LAST UPDATED ( MONDAY, 19 JULY 2010 08:27 )