Increases at ballpark retail space help MiLB teams boost merchandise sales 12 percent

Robust sales across all platforms led to a 12 percent increase in Minor League Baseball licensed merchandise revenue in 2010, according to data obtained by SportsBusiness Journal and scheduled to be released today by the league.

The 160 U.S.- and Canadian-based clubs that were affiliated with MLB teams last year generated $51.1 million through the sales of apparel, headwear and novelties, trailing only pre-recession 2008 as the highest annual total ever.

The 12 percent increase over 2009 is notable in that it came despite a 1.8 percent drop in average attendance among the clubs last season. Sandie Hebert, MiLB director of licensing, said about 80 percent of all MiLB merchandise sales comes from transactions made at stadiums, a ratio that has remained fairly steady over the years.

Helping to fuel the sales growth is the continuing evolution of stadium design. Several clubs increased their in-stadium shopping space last year, leading to big jumps in merchandise revenue.

The Class AAA Indianapolis Indians, for example, haven’t altered their team logo since the early 1990s and had not ranked among the top 25 selling MiLB teams for merchandise since 2004, but they saw their merchandise sales surge 18 percent last year after knocking down a wall and converting a kiosk nook into a 557-square-foot store. Chris Herndon, Indians’ director of marketing and communications, said the team also added a full-time staff member to the merchandise department as well as additional “hawkers,” or sales staff who roam the stands during games.

New ballparks that opened last season in Winston-Salem, N.C., and Tulsa, Okla., included team stores, something each club’s previous facility lacked. And prior to completing a $45 million stadium renovation last year, the Class AA Harrisburg (Pa.) Senators used to have what Terry Byrom, the club’s director of broadcasting and media relations, called “a trailer that looked like a snack shop from Little League days.” The team now boasts a 2,600-square-foot store and last year enjoyed its best season ever for merchandise sales, Byrom said.

Each year, Majestic Athletic and New Era Cap Co., exclusive apparel providers to MLB and its affiliated minor league teams, select 30 to 35 minor league teams to market to distributors, who in turn offer them to Little League and other organizations. Michael Johnson, vice president of marketing at Majestic, said sales of minor league logoed caps, shirts and jerseys are strong not just among youth baseball groups, but also among adult leagues.

These catalog sales are especially important to teams that lack national recognition.

“About 45 percent of our royalties come from the Little League program,” said Jay Grusznski, merchandise manager for the Class A Wisconsin Timber Rattlers. “Seventy-two percent of online orders come from out of state.”

Similarly, one of the most popular teams every year in terms of catalog sales is the Batavia (N.Y.) Muckdogs. The short-season Class A club plays fewer than 40 home games a year at 2,600-seat Dwyer Stadium. About two-thirds of the team’s merchandise sales come from the more than 125 Little League teams across the country who like and use the club’s snarling dog logo.

The smallest, but fastest-growing, revenue source across MiLB is online sales. Baseball Internet Rights Co. (BIRCO), a wholly owned subsidiary of MiLB, was created in late 2008 to manage the digital and interactive media rights for MiLB clubs and leagues.

As of April, 105 affiliated clubs had opted into the online program, which lets them utilize software and technology from BIRCO. Teams control what items are listed for sale on their own sites and handle the fulfillment of the online orders.

Twenty-one of the top 25 selling teams for 2010 (see chart) are now part of the program, including the Class AA Portland Sea Dogs, who opted in this spring.

“We’ve only had a chance to load about 10 percent of our items on our site,” said John Kameisha, Sea Dogs senior vice president. He said the club generated about 80 percent of its 2010 merchandise sales at the ballpark and is hoping to bump up its online sales by joining the BIRCO program.

Kameisha said sales so far this year are tracking about 16 percent ahead of this time last year.

An increased diversity of products has also helped MiLB sales. Teams are reporting big increases in the sale of women’s fashionwear.

None of this is lost on Jonathan Griffith, executive vice president of Northwest Florida Professional Baseball LLC, the group that is building a ballpark in Pensacola, Fla., that will serve as home to a Cincinnati Reds Class AA affiliate that is scheduled to be named next week.

“We’ve all spent enough time in this business to know that that first year in the market with a new logo is critical to not just merchandise sales, but the overall team branding effort,” Griffith said.