Business

Cedar Rapids Kernels pivot from baseball company to entertainment company with season canceled

Minor league team faces financial burden with no games, limited income

Cedar Rapids Kernels mascot Mr. Shucks waves to fans watching the NoOn Game at Veterans Memorial Stadium in Cedar Rapids
Cedar Rapids Kernels mascot Mr. Shucks waves to fans watching the NoOn Game at Veterans Memorial Stadium in Cedar Rapids on May 20. (Andy Abeyta/The Gazette)
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Doug Nelson has overseen the Cedar Rapids Kernels through floods, unforgiving weather and plenty of other challenges. None of that compares to the task he faces this year, though.

“You’ll never, ever hear me complain about a rainy homestand ever again,” said Nelson, the CEO of Cedar Rapids’ minor league baseball team. “We’re in uncharted waters.”

With the minor league baseball season canceled because of coronavirus, the Kernels has gone from being a baseball company to an entertainment business until games can resume in 2021.

At this time last year, the Kernels would’ve seen almost 100,000 fans go through the turnstiles at Veterans Memorial Stadium, paying somewhere between $9 and $14 per ticket.

Even with many season-ticket holders telling the Kernels to keep the money for the 2021 tickets “and pretend 2020 never happened,” it’s a significant loss of revenue.

When all is said and done, the Kernels will have gone 19 months between games.

But the Kernels still have myriad fixed costs, namely paying team staff, in the meantime. The team already halved its staff, cutting seven positions at the beginning of June.

“Everyone is wearing multiple hats and putting in a ton of hours,” Nelson said.

Less revenue and resources have forced Jessica Fergesen, senior director of corporate sales and marketing, to get creative with promotions.

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“When we knew that our season was inevitably going to be canceled, the members of our senior management got together to talk about, ‘OK, what kind of events could we have? What could we pull off with the smaller staff that we have?’” Fergesen recalled.

“What makes sense with social distancing?”

One of the most successful promotions came earlier in July, when the team started selling T-shirts with “2020” — with the Kernels’ logo in place of the first zero — and “What the shuck?” below it.

It’s the best-selling shirt in Kernels history. More than 400 people from across the country have preordered the $21 T-shirt, resulting in more than $8,000 in sales.

“We expect it to be our top-selling shirt for quite some time,” Fergesen said.

A Byron Buxton T-shirt had been the best-selling, with about 200 or 250 in sales.

With many fireworks shows in the area canceled because of the pandemic, the Kernels sold out a socially distant fireworks show. Fergesen will operate a trivia night Thursday, during which four-person teams could pay $100 for 10 rounds of trivia and four brats, four cheeseburgers, four bags of chips and 10 beers.

“The trivia night is something that’s sort of been in our back pocket for a few years,” Fergesen said. “But we weren’t quite sure how to incorporate it when a season is full of games.”

The Kernels also have sought to capitalize on fans’ taste for ballpark food, offering stadium fare in a “corporate carryout” curbside pickup format. For $15 per basket, employers can order a hot dog, bratwurst, chips, potato salad and a water bottle for their workers.

Joshua Gordon, senior instructor of sports business at the University of Oregon’s Warsaw Sports Marketing Center, said teams such as the Kernels that are pivoting to other ways of being part of their communities should be able to make it through the pandemic.

Minor League Baseball, Gordon said, has an advantage with it being in an outdoor venue, allowing for more non-baseball events. There’s an eager customer base for it, too.

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“People are still very much looking for entertainment,” Gordon said. “Even with the economy in distress and everything else, people are still looking for some sort of diversion for families, especially with schools and summer camps happening at a much lower degree.”

Still, revenue from these promotions is “a drop in a bucket” compared to pre-pandemic times, Nelson said.

Fergesen said the organization expects 150 fans to show up for trivia night. A typical Kernels game would draw more than 2,000.

Other minor league teams also are finding ways to be creative. Fergesen has calls with marketing staff for other teams to bounce ideas off each other.

In Florida, the Pensacola Blue Wahoos listed their stadium on vacation rental site Airbnb.

For $1,571 per night, a die-hard baseball fan can enjoy “the most intimate, behind-the-scenes ballpark experience in history.”

“Want to hit with your friends in our batting cage? Be our guest!” the listing says.

“Want to play catch on the field at 11:30 p.m.? Be our guest! Want to take batting practice while having a couple cold ones with the boys? Be our guest! Want to take down your siblings in pingpong and video games in the clubhouse? Be our guest! Want to enjoy breakfast at home plate? Be our guest!”

Don’t expect to see Veterans Memorial Stadium on Airbnb any time soon, though.

“We’re not a hotel staff,” Nelson said.

While no one will be able to rent a night in the Kernels’ dugout, Cedar Rapids’ minor league team, Fergesen said, has an advantage over many teams in states with more safety restrictions.

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“A lot of teams are only just now able to have fans or able to hold events in their stadiums,” Fergesen said. “We’re lucky.”

There’s another silver lining about an hour north of Veterans Memorial Stadium. The Kernels also own the Waterloo Bucks, a Northwoods League team operating with a condensed schedule.

“They’re helping support the Kernels,” Nelson said. “Any little bit helps.”

After going from a 36-game schedule to a 20-game lineup and reducing capacity to 1,000 fans, that still brings a limited return on investment for the Kernels, though

The timing of the lost season is not ideal for the Kernels, either. Major League Baseball and Minor League Baseball are negotiating a new Professional Baseball Agreement that likely would result in MiLB contracting by about 40 teams.

The Kernels were not on an initial list of 42 teams expected to lose MLB affiliations, but that could change.

Nelson doesn’t need to look far geographically to see teams that are the list, too. In Eastern Iowa alone, the Burlington Bees, Quad Cities River Bandits and Clinton LumberKings are all on the chopping block and in the same league as the Kernels.

Last year, the River Bandits had better attendance than the Kernels. The only other Midwest League team to average fewer than 2,500 fans per game and not be on the list was the Beloit (Wis.) Snappers.

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Should a team lose its MLB affiliation, Gordon expects it to “lose a certain set of cooked-in relationships that come with the affiliation with a major league club.”

“When you’re playing baseball, you lose the allure of seeing a future star,” Gordon said. “Or maybe somebody’s a Padres fan and they’re watching a (Padres-affiliated) minor league club. You lose that connection.”

A rebound in attendance after years of declines could’ve provided the Kernels a much-needed boost to make the stadium upgrades their MLB affiliate Minnesota Twins have asked for — more batting cages, a video room and an improved home clubhouse — and increase odds of being on the right side of MLB’s cuts.

Now Nelson said the team is putting any upgrades on hold until the new Professional Baseball Agreement comes out, possibly with more stadium upgrade requests.

The longtime chief executive of the Kernels had “very productive and encouraging conversations with the Twins” and said “all signs are encouraging,” but there’s still no guarantee the Kernels will still be an MLB team’s minor league affiliate in 2021.

“At the end of the day, Major League Baseball will make the final decision on who the 120 teams” still affiliated, Nelson said.

There’s still a long way to go before any 2021 season — with or without an MLB affiliation — though.

If the 2021 season starts as planned, that’s another nine months without baseball at Veterans Memorial Stadium.

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Gordon, at the University of Oregon, said some minor league clubs will be “OK.” Others — possibly a high percentage — will “probably fail to exist” after post-coronavirus-time period revenue is counted.

Having a social media presence is crucial as well, Gordon said.

“If you don’t have that audience, you can’t pay for the advertising,” Gordon said.

If the pandemic stretches into 2021 and affects the upcoming season, the consequences could be more dire.

“Most of these ownership groups are not super deep (pocketed) or willing to take big losses on it ... if you go more than a season without meaningful baseball where you have fans in stands,” Gordon said.

Unlike MLB teams, MiLB teams don’t have lofty television contracts to serve as a financial boon. The Kernels already have made plenty of sacrifices.

“We have definitely cut every single way we can,” Nelson said. “Any expense we can cut back on, we have.”

Nelson declined to say whether he thinks more reductions are coming, noting it’s “an ongoing process.”

He hopes to rehire the laid-off staff next season. But unlike one rainy homestand, it’s unclear what the future holds after this storm.

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“We need to start to reassess what is the new normal,” Nelson said. “When I say new normal, I mean not only what’s post-COVID-19 look like, but also what does the agreement with Major League Baseball look like.”

Comments: (319) 398-8394; john.steppe@thegazette.com

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