Printer Friendly
The Free Library
14,709,671 articles and books
Member login
User name  
Password 
 
Join us Forgot password?

Baseball a minor obsession for Mandalay Entertainment. (Up Front).


There's no shortage of media companies scrambling to get out of the baseball business -- including Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966)
Disney, Walter Elias Disney
 Co.'s ongoing efforts to sell its World Champion Anaheim Angels.

But film executive Peter Guber's Mandalay Entertainment group of companies, which has had uneven success in its film and television ventures, is producing a hit with its baseball assets -- and has raised tens of millions to double its holdings.

Their secret? Shoot for the minors.

"Minor league baseball
This article is about the umbrella organization for minor-league professional baseball in North America. For general information on the minor leagues, see minor league baseball.
 is not that far afield from the entertainment business in terms of creating unique properties," said Ken Stickney, a managing director and co-owner of Los Angeles-based Mandalay Sports Entertainment Mandalay Sports Entertainment (MSE) is a subsidiary of Mandalay Entertainment Group. MSE owns a number of minor-league baseball teams, via its Mandalay Baseball subsidiary, and is responsible for managing several more. . "If you do it right, you can make a substantial business out of it."

Mandalay owns minor league clubs in Las Vegas Las Vegas (läs vā`gəs), city (1990 pop. 258,295), seat of Clark co., S Nev.; inc. 1911. It is the largest city in Nevada and the center of one of the fastest-growing urban areas in the United States. , Dayton, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. , and Frisco, Texas Frisco is a city in Collin County and Denton County, Texas (USA).

It is a northern suburb of Dallas. As of the 2000 census, the city population was 33,714, while according to 2007 estimate, the city's population is approximately 95,000.
. In December, the company signed an agreement to purchase a fourth team, in Hagerstown, Md.

Now, with $40 million in new financing finalized at the beginning of the year, Mandalay is looking to build a small empire of minor league teams.

"We're in advanced discussions in a couple different areas and we'll have something to announce in the next few months," Stickney said. "Our business plan calls for us to be up somewhere around eight or 10 teams within five years."

Mandalay Sports Entertainment was formed in 1996 as a four-way partnership made up of Stickey and his father Hank, veterans of the minor league business, and Guber, Mandalay's chairman, and Paul Schaeffer, its chief operating officer Chief Operating Officer (COO)

The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president.
. Stickney would not say how much of the overall Mandalay business was comprised of minor league baseball operations, other than to say, "it is a substantial amount."

As a business proposition, minor league baseball makes sense because it is everything the majors are not. About 80 percent of a club's revenue is generated from ticket sales and advertising; the balance comes from concessions and parking. Mandalay executives are mum on providing specifics, other than their insistence that each of their teams is profitable.

An average Triple-A team (just one notch below the majors and generally the most expensive) costs $15 million, and can generate between a few hundred thousand to $3 million in annual income.

Player salaries, the primary cost of operating a major league team, are paid by affiliated major league teams. "The down side is you can't control how bad or good your team is," Stickney said.

To get fans into the stadium, owners rely on marketing and mid-game entertainment. Where a major league fan might go to see Barry Bonds Barry Lamar Bonds (born July 24 1964 in Riverside, California) is a left fielder for the San Francisco Giants of Major League Baseball. He is the son of former major league All-Star Bobby Bonds, the godson of Hall of Famer Willie Mays, and a distant cousin of Hall of Famer Reggie  crack a homer, minor league fans are wooed by karaoke contests and between inning go-kart races. "Really, it has nothing to do with baseball' said Dan Migala, executive editor of Team Marketing Report, a sports marketing publication in Chicago.

Minor league teams are also easily moved, giving owners more control over their financial destiny. Mandalay's Dayton Dragons (partly owned by Earvin "Magic" Johnson) relocated from Rockford, Ill. four years ago and has sold out every game in its new venue.

The Double-A Swamp Dragons from Shreveport, La. were purchased for $4.5 million in 2000, according to news reports, only to be moved to Frisco, Texas, a Houston suburb, where this April the team (now called the RoughRiders) will begin playing in a new $27 million stadium. (Mandalay owns the Swamp Dragons with Texas Rangers and Dallas Stars owner Tom Hicks' Southwest Sports Group.)

"What they've been able to do is buy teams that were in poor markets and identify a market that has greater revenue potential," Migala said. "They're not fooling anybody. They don't have relationships in those towns and so they've have no problem moving the teams."

Not everyone in the folksy folk·sy  
adj. folk·si·er, folk·si·est Informal
1. Simple and unpretentious in behavior.

2. Characterized by informality and affability: a friendly, folksy town.

3.
 world of minor league baseball has welcomed this bottom-line emphasis. "When you're dealing with a corporation it takes a lot more to get to the person that makes a decision," said Bobby Evans, director of minor league administration for the San Francisco Giants The San Francisco Giants are a Major League Baseball team based in San Francisco, California that currently play in the National League West Division. New York Giants history
Early days and the John McGraw era
, which had been the Shreveport's affiliate team until Mandalay moved the club to Frisco. "Your point person is way down the list."

Asked what it was like working with Peter Guber, Evans replied "Who's that?"

Mandalay Sports was formed with two teams: the Las Vegas 51's, a Triple-A affiliate of the Dodgers, and the Lake Elsinore Storm The Lake Elsinore Storm are a minor league baseball team in Lake Elsinore, California, USA. They are a "high-A" class team in the California League, and are a farm team of the San Diego Padres. , a Single-A affiliate of the Angels. (Baseball governing bodies have since forced Mandalay to sell the Lake Elsinore team because of a separate partnership between Hank Stickney and another team in Lake Elsinore's division.)

After snapping up two additional teams, Mandalay went looking for Looking for

In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with.
 money. Last August, private equity firm Seaport Capital invested $20 million for a minority stake in a new partnership called Mandalay Baseball Properties. MBP (Manchester Bus Powered) A synchronous transmission standard used in industrial networks. It provides 31.25 Kbps over a two-wire connection that delivers power in the bus and intrinsic safety.  secured a $20 million line of credit with Webster Bank in conjunction.

Steve McCall, a Seaport principal, emphasized the difference between investing in the major and minor leagues.

"When people leave our games they don't even know who has won or lost," Stickney said. "They don't care."
COPYRIGHT 2003 CBJ, L.P.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2003, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Author:Dougherty, Conor
Publication:Los Angeles Business Journal
Geographic Code:1USA
Date:Feb 24, 2003
Words:831
Previous Article:Missteps, competitors take toll on aging Smart & Final chain. (Up Front).
Next Article:Review & Preview.(reports on various new items)
Topics:



Related Articles
Minor League Baseball and Local Economic Development.
DODGERS ADD COLLINS TO MIX.(Sports)
JETHAWKS NOTEBOOK: JETHAWKS WON'T RAISE PRICES.(News)
BRIEFCASE MANDALAY TOUTS BRAND MARKETING.(Business)
Ex-Dodger Claire goes to minor leagues with a new baseball venture. (Up Front).(Group of investors buying minor league baseball teams)(Brief Article)
Done and done. (Investments & Finance).(Lions Gate Entertainment sells 45% stake in Mandalay Pictures L.L.C.)(Brief Article)
Letters.(Brief Article)(Letter to the Editor)
CITY TO PLAY BALL NO EXCLUSIVITY FOR PROMOTER.(News)
BASEBALL PLAN HITS SNAG IN CITY COUNCIL.(News)
Mandalay Bay Resort & Casino Convention Center: a luxurios, state-of-the-art facility in the heart of Las Vegas.(Hospitality)(Product/Service...

Terms of use | Copyright © 2009 Farlex, Inc. | Feedback | For webmasters | Submit articles