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).
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