Tuesday, November 16, 2010

An Interview with Pat O'Conner, President of Minor League Baseball Part 2

(This post originally appeared on Bus Leagues Baseball.com)

A few weeks ago, Bus Leagues Baseball had the privilege of sitting down with the President of Minor League Baseball, Mr. Pat O'Conner, at Minor League Baseball Headquarters in St. Petersburg, Florida. Mr. O'Conner was gracious enough to answer all of our questions and talk with us for nearly an hour.

This is Part 2 of our 4-part interview. Part 1 was Monday. Part 3 will be featured on Wednesday and Part 4 on Thursday.

An Interview with Pat O’Conner – President of Minor League Baseball

Bus Leagues: You’ve been president since 2008, and of course one of the biggest factors to effect sports since 2008 has been the economy. How has Minor League Baseball dealt with the balance that on one hand you become a cheaper entertainment alternative, but at the same time there is the potential that less fans could afford to go to a game?

Pat O'Conner: First, I would slightly modify your proposition that we “become” a more affordable, we have always been a more affordable alternative. We tend to do as well or better than size-specific or size-comparable industries in downturns., because we are there, and we are always there, and we don’t have to retool. We don’t have to change our pricing structure to adapt to a downturn in the economy.

So, yes, we do feel it and it is necessary for us to react but it is not a total retooling. In a downturn in the economy, people know we are there and we become the alternative to the more expensive or the more time-consuming or more elaborate plans. They won’t go to the beach, they’ll go to a few more games. They won’t go to grandma’s for a week, they’ll go to a few more games. People are going to commune and recreate. They are going to do that. This country is based, in large part, on that. They are going to get together, and they are going to get together in like mind to do like things. So we are not only affordable in bad times, we are always affordable.

We deal with these times by becoming more entrenched with the communities we are already in, and becoming more of an option, and we will value-add. We will value-add to the point where we will do things with concessions – kids eat free, etc. We have had clubs respond to their communities, where have been pockets of unemployment and allowing the unemployed to come to the game for free. We’ve had fans who have felt severe cutbacks and they get some benefit.

So that’s how we deal with it. I don’t think there are less fans that can afford to come to a game but it is that more fans are forced to make significant or difficult decisions on what they are doing with their discretionary income. And we like our chances when we get into that analysis. When a family decides “What are we going to do?” and a ten dollar bill gets the whole family in, I’ll stack that option against going to the movies or doing anything else of value.

So we do well. We are a collection of 160 small businesses scattered throughout the country. If you take the size of our businesses and you compare other sectors of the economy with businesses our size, we do very well comparatively. Our downturn was less than 4% last year and about a half of a percent this year in attendance. We actually sold as many tickets in 2009 as we did in 2008 from the standpoint of the walk-up was much better. Of course, we were down in season tickets and pre-season because it follows to reason that if you are a man or a woman with two kids, you are not going to buy season tickets in March and pay for the entire year. So what our clubs did was perhaps offer mini-plans or “pay as you go”.

Also, businesses weren’t scheduling picnics for employees because they didn’t know if they were going to have 200 or 20 by August. So those were the impacts. But as far as the family unit and the individual, they came out as strong in 2009 and 2010 as they ever have.

Bus Leagues: You mentioned local entities and local businesses. How do you maintain control while still providing the freedom for teams to cater to their local markets?

O'Conner: Well, we are philosophically by choice a states’ rights organization, if you think of it in a governmental sense. We provide the four corners of an agreement that secures aspects out of their control, namely relationships with Major League Baseball and the intra-league relationships that are necessary to keep the group together. It is all contained in our constitutional bylaws and you maintain control through a system of governing bodies. We have the board of trustees, which is the policy making element, and we have the Council of League Presidents, which is made up of the president of each league, which executes the policies set forth by the board.

It’s kinda like there is law and order because people believe in it. There is a set of rules and our job is not beat them over the head with it, but to make them aware. Our primary job is to create an environment that allows them to excel in their local market. Not to tell them how to do it. I can’t tell you what’s going to work best in Salt Lake City. I would be arrogant and overconfident in my own abilities to think that I could. Just like I can’t tell you what’s going to work in Sacramento or in Bluefield, West Virginia, but I guarantee I could get on the phone with the guys from Sacramento, Salt Lake City, and Bluefield and they can tell us. So it’s what I want or we want, it is what is best of the teams. And that is the role of this office – to keep them honest. And to secure relationships beyond their control – with Major League Baseball, with the media, with major sponsors in a national scope that is out of their control – that creates an environment that allows the teams to do well.

Bus Leagues: I noticed a lot of the teams are staffed by interns and volunteers. How hands-on are you in regards to employee guidance?

O'Conner: Well, at the team level, those again under the states’ right model, are decisions for them to make. We do deal with them on governing rules and laws in respect to labor and that kind of thing. But in regards to telling them you have to have to have so many people, and you have to do this, and you have to do that, no.

In December of 2009 however, we rolled out a diversity initiative. It is as strong of a statement as we have taken in respects to aspects of the business at the local level. But it is not a mandate. It is a vision created in this office that allows us to deal with what is becoming an ever-changing world on the outside. The public and this country is undergoing a transformation in its makeup. So what we have done is laid out five pillars. Employment at the Executive Level and Employment at the Middle and Lower Management Level are two of the five pillars that allow us to diversify our workforce and our employee census in order to deal with a more diverse public.

So outside of that, we don’t get involved in the manning. They have to name an ultimate authority, there has to be one go-to person in each organization. Outside of that, they are under rule by not only NA agreement and league by-laws, they are obligated to run a vibrant and ongoing entity. And it is inherent in that that you will need some number of people, but it not specified.

Bus Leagues: How does the Mexican League fit in to Minor League Baseball and your relationship with Major League Baseball and how did they become a AAA-league?

O'Conner: It is a history lesson. There is historical significance that goes back to the days of Max Lanier. There was a period, back when (Happy) Chandler was the commissioner.

The long and the short of it is it got to a point where the big leagues were going down and tapping into the Mexican League talent. And almost in retaliation, the Mexican Leagues came up and signed what would have been at the time the equivalent of free agent players. Under the reserve system, they were exactly free, but they didn’t have a valid contact. So they signed contracts with Mexico that were lucrative. And basically, it created a bidding war for talent. So to resolve that issue, there was a gentlemen’s agreement between the Mexican League commissioner and the Major League Baseball commissioner to recognize each other’s authority and recognize each other’s contracts and in fact fold them into the structure that is Minor League Baseball and we agree to accept them as members.

Their designation as AAA was probably appropriate at the time, and I think it is still appropriate. But understanding the sovereign nature of baseball in Mexico, they are in the agreements, and there are aspects of it that are applicable to them, and aspects that are not. There are some cultural differences and there are some business things that happen. For instance, if you go to a Mexican League game, you will conspicuously see logos everywhere – pants, shirts, butts, jerseys, legs, backs, everything. That is a cultural difference that came to us 50-60 years ago that way and it has been allowed ever since.
There are some things with Mexican labor laws, for instance, that make the signing of players slightly different. Reserve systems, bonuses, and other things that are different in this country. Nothing in the NA agreement or in the Professional Baseball Agreement supersedes federal law or local law. It is the same thing there. And there are some things that are unique to Mexican labor laws that have been folded in.

So that is a historical relationship, one that quite honestly, is very difficult to manage from the standpoint of the cultural differences. The purpose of the league is not necessary to develop players for beyond the Mexican League. They do sell players, and there are trades and exchanges, but that’s not their primary business. Their primary business is to win baseball and to win Mexican League Championships.

So that sets it apart. But it is far more appropriate to have the Mexican League in with us than to not have it with us.

Bus Leagues: How cognizant are you of fan safety?

O'Conner: Well I think we are very cognizant of it and we are very aware of what goes on. We try to stay on the front end of options and changes and that. Again, this is an element of the local nature of it. The fans and the ballclubs will come to a mutual agreement on what is acceptable as far the constraints, the ability to move around, to be behind a screen or not behind a screen. We are aware of the ADA (Americans with Disabilities Act) and other acts and we make sure our clubs are aware of them. But as far as going in and dictating exact what needs to happen, we don’t do that.

Part 3 tomorrow.