A Golden Opportunity: N.Y. Times Examines GBL Operations

The California-based independent Golden Baseball League (GBL), which started last year, was profiled by Gary Rivlin in the N.Y. TIMES Sunday Business section. The venture capitalists and “other lords of Silicon Valley who have so far poured roughly $15[M] into the Golden League view their investments no differently from the ones they have in other start-ups.” They expect the six-team league to “expand to at least 40 teams in the coming years, or maybe even 80, and then to provide them all with a rich payout — if not through a public stock offering, then through a high-priced sale to a large entertainment conglomerate.” Supermarket chain Safeway has a three-year, $3M sponsorship deal with the league, which is called the Golden Baseball League Presented by Safeway Inc. Also, each GBL player wears a shoulder patch for a fish-oil product called AlphaFlex Omega5 that is supposed to ease joint pain. The Yuma, Arizona, team “constructed a second, taller outfield wall behind the original just to accommodate extra advertisers.”

FINANCES: Rivlin noted each GBL franchise costs $900,000-1M per year to operate, and less than 10% of those costs go to payroll, as each team has an $88,000 salary cap. GBL co-Founder David Kaval said that the “real challenge ... is finding cities west of the Rockies that are large enough to support a team and hungry for the kind of wholesome, community-oriented entertainment he seeks to sell.” Kaval and his partners “expect the [GBL] to start turning a profit next year, in its third season.” Kaval said that the league averaged 1,350 a game in the first year and the figure “is hovering at just over 1,500 this season.” He added that the GBL “needs roughly 1,700 fans per game to reach profitability.” Outcalt: “Year One was about survival. The second year had been about streamlining costs. Year Three will be when we really pay attention to driving profits.” Investor William Del Biaggio III added, “I made this investment because I think I’m going to make a lot of money on this thing” (N.Y. TIMES, 7/9).