Shut Car Dealers Impact Tomorrow's Baseball

By Diane M. Grassi

“See the USA in your Chevrolet...,” was once as much a theme song for the American leisure lifestyle as it was an advertisement for one of General Motor’s (GM) most celebrated automobiles. And not to be overlooked is the relationship that the auto industry, and more specifically GM, has forged with Major League Baseball (MLB) over the past many decades.

In the mid-1970’s it was “Baseball, Hot dogs, Apple Pie and Chevrolet,” in a then-famous multi-faceted advertising campaign and jingle, and it was updated again in 2006 to accommodate the times.

The point of such Memory Lane nostalgia is to impart that the relationship between the auto industry and MLB began most historically with the advent of television broadcasts of games and the booming car industry sales of the 1950’s.

But further to corporate relationships and revenues is the importance of car sales at the local level, otherwise known as the car dealership. And over the years, from small towns to large, they have been bedrocks of their communities along the byways and across the highways.

For dealerships, and their respective service departments, provide payroll taxes, sales tax revenue, pay real estate and property taxes, pay state and local income taxes, among other required government fees and obligations, to their local governments. And equally important, they provide employment that provides health insurance, pension and other benefits for their many employees.

On May 14, 2009, Chrysler, LLC formally announced the immediate elimination 789 Chrysler dealerships nationwide. On May 15, 2009, GM formally announced the first 1,100 casualties of its expected 40% reduction of its dealerships or over 2,600 expected before the end of 2010. In addition, 2000 GM Pontiac dealerships were permanently ordered shuttered, as Pontiacs will no longer be manufactured again.

Unfortunately, Chrysler’s dealerships had only until June 9, 2009 to fire staff, sell off inventory and parts and to notify its customers with vehicles under warranty that they are going out of business. GM, at least, is allowing its dealers far more time to wind down operations, sell off inventory, advise customers and give the unemployed a leg up. All of this is of course taking place when these jobs, which are not expected to return, impact entire towns in some cases, during the worst “recession” since the Great Depression of the 1930’s.

There could have been a temporary reprieve for Chrysler dealers, from an often disengaged U.S. Congress, by way of a legislative amendment to the Supplemental Appropriations Act of 2009. It would have preempted allocation of a second round of bailout funds recently promised Chrysler, unless they provided dealers with at least a 60-day notice to help sell off their inventory and to allow appropriate closure of sales operations. Unfortunately, this never came to pass.

So What Has This Got To Do With Baseball?

As previously noted, as loyalists to the community, historically car dealerships, by extension, have supported numerous other businesses; from local parts suppliers, to supporting local newspapers through advertising, to creating business for local proprietors through their employees.

Additionally, car dealerships have always maintained being major sponsors for charities within their communities. These include support for numerous extra-curricular school functions, recreation department activities, animal welfare causes, volunteer fire department programs and any number of fund raisers.

Most notably, Little League Baseball and various other youth baseball programs throughout the U.S. have been traditionally supported by car dealerships. It is a win-win as uniforms and T-shirts help with advertising for the car dealer and keeps it involved locally, while being a big part of financing the numerous expenses incurred to run local teams and to help keep kids active and out of trouble.

In parts of the U.S., a small town may have only one or two dealerships or authorized service centers for vehicles within a 100-200 mile radius. Therefore, the closure of a Chrysler or GM dealership could virtually take a whole town with it.

At a time when youth activities have already been compromised due to limited funding, since the crash of the economy in late 2008, the prospects for youth baseball and athletic activities of any kind have not been good. Transportation, team membership dues, and provisions for uniforms and equipment all require funds. And parents, many of whom who are unemployed, under-employed or fearful of becoming jobless, have been forced to put participation in organized sports for their youngsters on hold.

And as all charities compete for donations in these hard times, it is often sports and recreation which are the first to be stricken from the ledger as well, when it comes to businesses solicited for funding. And as if the auto industry was not hurting badly enough, GM will be closing all of it U.S. plants for 9 weeks this summer, and all of its suppliers will see down-time as well.

By 2011, there will be hundreds of thousands of U.S. auto industry workers joining the unemployed, and that does not include the businesses which profit as a direct result from either the U.S. auto industry or its employees.

Similarly, to other youth organized athletic programs, the Reviving Baseball in Inner Cities (RBI) organizations, in many cities throughout the U.S., are operating in the red. RBI provides organized baseball for youth, traditionally for middle school and high school boys, although a few are now including 6 -12 year olds.

Most RBI organizations are dependent upon most, if not all, of their budgets from their own fundraising efforts. MLB, although a sponsor of RBI, contributes minimally to RBI funding and functions more as an endorser of the program than anything else.

Ultimately, the success of any one RBI program is a labor of love by individuals within communities, and largely maintained by single mothers. Yet, transportation to and from games, equipment, uniforms, fees for coaches and umpires, food and drink, upkeep of fields – which very often is done by the parents – still are associated costs, similar to those of Little League Baseball.

Some have asked, “What about the youth baseball travel teams, AAU clubs and youth suburban leagues?” Well, this recession, as previously stated, is like no other since the Great Depression. Therefore, it has impacted all sectors of industry and all pay scales of workers, from Wall Street to every street in America.

As previously reported by this journalist in numerous documentations with respect to sponsorships being off throughout MLB in 2009, GM has ended relationships this season with the Pittsburgh Pirates, a community deeply hurting in this recession, the Detroit Tigers, Ground Zero for the auto industry implosion and even the New York Yankees – for whom there is probably not much sympathy these days.

As the result of struggling families, MLB stadium attendance thus far in 2009 for April and most of May is down nearly 6% nationally when compared to the same number of weeks into the 2008 season. Yet, with tickets in many cities still too costly for many, with less discretionary income available, that means less youngsters will be attending MLB games.

One industry that curiously has been spared in this recession is the business of government, from the Beltway and beyond, which keeps adding jobs. And also unlike previous recessions it has included intrusive government policies which have only led to more plant closures, car sales jobs lost and essentially the vaporization of the U.S. car industry, which will never be the same again.

Were the car business not so embedded in the American way of life, perhaps it would be less tragic, but its fallout will be felt for decades to come, on many levels, and few communities will be spared.

And with respect to MLB, it cannot be stated enough times that more than any other professional sports league it has enjoyed multi-billion dollar revenues of $6 – 7 billion dollars each of the last several years. Additionally, MLB Commissioner, Bud Selig, earned the highest salary of any professional sports league commissioner in each of the last several years; $15 million for 2006 and $18.5 million for 2007.

Selig’s 2008 income has yet to be publicly disclosed and may very well not be divulged, as MLB is not required to do so. In fact, Selig was furious when his 2007 salary was leaked to the press earlier this year.

Therefore, it would seem pertinent to MLB’s development and outreach, as it looks forward, that it should not just limit its focus to bottom lines, its number of sponsorships, its broadcast TV deals or escalating player salaries. For if MLB remains as shortsighted as it has been the past several years, not only will the younger generation of potential players and fans erode, but they will permanently vanish.

So too, that which once were dependable American vocations – jobs in both the auto industry’s factories and showrooms – are no longer givens.

And similarly, MLB’s future hangs in the balance. If children are no longer able to afford to play the game, unable to afford the cost of a stadium ticket or even unable to afford current and impending expensive pay-TV packages in order to even watch a game, since very few MLB games ever appear on network television anymore, baseball as we know it will become but a footnote in the history books.

And it would serve MLB well to reinvest in its future right now.

For MLB has gotten greedy, fat and lazy during Bud Selig’s reign, yet it has not gotten too big to fail, as it has already compromised its generations to come.

Copyright ©2009 Diane M. Grassi
Contact: dgrassi@cox.net