PODCAST: A CPA’s perspective into the Minor League Baseball industry

Written on Dec 03, 2020

By Jessica Salerno, OSCPA senior content manager 

While Minor League Baseball comes with exciting grand slams, passionate fans and large ballparks, the running of a Minor League team is actually similar to a small business, said one CPA. 

“To the common fan, you would think that there's a lot going on behind the scenes – and there is a lot going on,” said Jim Merklin, CPA, a partner at Bober Markey Fedorovich. “But outside of the handling of cash, the nature of their accounting can be very similar to what you would expect in a small business client.” 

Man in suit smiling for camera.

Merklin has worked with the Akron Rubber Ducks minor league team for about seven years, and he joined The State of Business podcast to discuss the unique challenges and opportunities of the industry. 

For a team to have long-term success, he said it must get creative. 

“I've learned that team owners depend on more than just good weather and a packed house for a successful franchise,” Merklin said. “They need strong community relationships, advertising partnerships, attractive promotions and thriving merchandise sales. They need to navigate a seasonal industry, volatile cash flow and varying revenue streams.” 

Something fans might not realize is that the baseball players aren’t employees of the team, Merklin said, but are employed by the major league teams under developmental contracts. He said the minor league team’s responsibility is to provide the players and coaches with a great atmosphere while developing their skills to eventually perform at the major league level. 

“In essence, the minor league teams are entertainment companies; they sell tickets to the public, advertise and find other support to help ensure continuity of an excellent product in their marketplace, concessions and team paraphernalia,” he said. 

Merklin mentioned that taxation requires special attention, as careful planning between the team and its advisers is crucial to ensure the team not only complies with the rules, but also doesn't put themselves in an unnecessarily bad position. 

The minor leagues have felt the impact of the coronavirus pandemic, forcing most of them to shut down and lose their main source of revenue for almost a year. To combat this, the Akron Rubber Ducks have held socially distanced movie nights to earn revenue where they can, among numerous other efforts. 

“Right now, the only trend that that gets me excited about minor league baseball is the prospect that they'll be able to start up again this coming spring,” Merklin said. “This has been a long and hard year for our friends in minor leagues.” 

To hear more from Jim Merklin about his experience in the Minor League Baseball industry, listen to the podcast