Steve (00:00.793)
10 second, is there anything you're dealing with at this moment in the business of sport that you feel is just preoccupying you in an exciting way?

Derek Sharrer (00:14.414)
Sure, and I guess the related question, think when we were trying to get started the other day, you had mentioned sponsorship specifically. So are you thinking in that direction or?

Steve (00:14.745)
Sure.

Steve (00:18.521)
started the other day you mentioned sponsorship specifically so are you thinking a lot in that direction? go so you know if there's nothing there like you know yes I mean when you think of we'll get into it I don't want you to have to repeat yourself so and and again it's Shar. Thank you. Shar. Derek Shar.

Derek Sharrer (00:36.706)
Yeah.

Sure.

Derek Sharrer (00:43.554)
You get it.

Steve (00:43.737)
and I have your CV and let me make sure I have.

Steve (00:53.913)
And recently, obviously, we're talking now the, where's my other, yeah, ba-ba-ba-ba-ba-ba-ba, one sec, please. So now President of the St. Paul Saints. Correct, President of the Saints and sort of a a related change is regional vice president with Diamond Baseball Holdings.

Derek Sharrer (01:07.47)
Correct. President of the Saints and sort of a related change is regional vice president with Diamond Baseball Holdings overseeing the Midwest teams in our ownership group.

Steve (01:17.433)
overseeing the Midwest regional VP of diamond baseball

Steve (01:30.403)
Beautiful. All right. Let's get right to it. Okay.

Derek Sharrer (01:34.499)
Yeah.

Steve (01:36.801)
So on today's episode of the Transaction Report, a unique angle, we're not going at it, I don't wanna put down, it should not come at it from a, give me a second. No, take two and take three goes to artificial intelligence, so don't worry.

Steve (02:15.32)
So what a unique pleasure it is to have Derek Scherer, the president of the St. Paul Saints. And the St. Paul Saints are a minor league team associated with Major League Baseball. He is also regional vice president of Diamond Baseball Holdings. And Derek, I want to welcome you to today's episode of the Transaction Report. Good morning,

Derek Sharrer (02:37.31)
Good morning Steve, thanks for having me.

Steve (02:39.714)
You know, it's so interesting. You really are what I would call in our industry, the business of sports. In this case, a journeyman, veteran, almost your entire life has been dedicated in the professional sense to baseball. And I think for a lot of our viewers and listeners, we hear a lot about quote unquote, minor league baseball. And...

We don't really understand minor league baseball, particularly folk who come from big cities. It's not really part of our repertoire. We know it's out there. We know it's perhaps a breeding environment for future stars of major league baseball, but we don't really understand its proposition, its value proposition. So let's just get right into that aspect of minor league baseball. What is or what are the core

value propositions.

Derek Sharrer (03:38.978)
Wow. I guess the first thought that comes to mind is, as you mentioned it as potentially a breeding ground and certainly it is that from the standpoint of player personnel, no question minor league baseball is, particularly affiliated minor league baseball is a place where major league teams are watching their top prospects, watching their minor league personnel, coaching staff, training staff.

Steve (03:59.385)
watching their top prospects, their mighty league personnel, coaching staff, training staff, everybody involved in player personnel, watching them develop and grow and ideally make it follow the path to the major leagues.

Derek Sharrer (04:06.464)
everybody involved in player personnel, watching them develop and grow and ideally make it follow the path to the major leagues. It can be a breeding ground for young executives as well. No question that that's part of the path. Sometimes people interested in getting into the sports business, in particular, major league baseball, might try to get their foot in the door at the minor league level. I think the thing that most from the outside looking in might not understand is that

Steve (04:13.88)
It can be a breeding ground for young executives as well. No question that that's part of the path. Sometimes people interested in getting into the sports business, in particular Major League Baseball, might try to their foot in the door at the minor league level. I think the thing that most from the outside looking in might not understand is that it's more than a breeding ground. It's a home. It's a place where...

Derek Sharrer (04:35.16)
that it's more than a breeding ground, it's a home. It's a place where sports executives, people who have an interest in being in the sports industry, not only can get their foot in the door, but can turn it into a career and even a lifestyle, a way of life, so to speak. So it's so much more than a breeding ground.

Steve (04:42.136)
up

Derek Sharrer (05:01.198)
from a holistic perspective, minor league baseball is a place for not only the players, not only the executives, but for fans to grow and develop and to gain the love of baseball. But I think the thing that...

Steve (05:09.09)
for not only the players, not only the executives, but for fans to grow and develop and to gain the love of baseball. But I think the thing that most communities understand that have minor league baseball teams, whether they're small towns or big cities, because minor league baseball is really everywhere. It's in major markets. It's in what you would call minor league markets.

Derek Sharrer (05:21.506)
that most communities understand that have minor league baseball teams, whether they're small towns or big cities, because minor league baseball is really everywhere. It's in major markets. It's in what you would call minor league markets. But I think what people understand in those communities is what an anchor minor league baseball, what an anchor a minor league baseball franchise can be for a community.

Steve (05:36.409)
I think what people understand in those communities is what an anchor of my early baseball franchise can be for a community. an involvement perspective, from an altruistic perspective, from a place for people, from the perspective of being a place for people to come together.

Derek Sharrer (05:47.958)
from an involvement perspective, from an altruistic perspective, from the perspective of being a place for people to come together and congregate. In St. Paul, we have a thing that we call the three C's. And those are the three C's of St. St. Baseball. And the C's are conversation, connection,

Steve (05:59.545)
congregate. In St. Paul, we have a thing that we call the three C's. And those are three C's of St. Paul. And the C's are...

conversation, connection, and community. And within those three C's, envision it as sort of your process of coming to a Saints game. You walk through the gates and you begin having conversations, whether it's with the ticket taker or the usher or the person sitting next to you. So you have that conversation. It may be with the person you came with. It may be with someone on the other side of you who you've never met before.

Derek Sharrer (06:17.038)
and community and within those three C's envision it as sort of your process of coming to a Saints game. You walk through the gates and you begin having conversations, whether it's with the ticket taker or the usher or the person sitting next to you. So you have that conversation. It may be with the person you came with. It may be with someone on the other side of you who you've never met before, but you have that conversation as part of enjoying this ball game.

Steve (06:41.336)
But you have that conversation as part of enjoying this ballgame. And by having that conversation, you make a connection. You connect with those people who you've been speaking with. And then by making that connection, now you've become a part of a community. And Miami League baseball, both inside the ballpark and out, is a community.

Derek Sharrer (06:45.066)
And by having that conversation, you make a connection. You connect with those people who you've been speaking with. And then by making that connection, now you've become a part of a community. And minor league baseball, both inside the ballpark and out, is a community.

Steve (07:02.71)
So let me try to, and I'm glad you positioned it that way, particularly when you look at minor league teams. For many, that is gonna be the consumption of sport on a live basis that they have exclusively. And they're not necessarily engaged with a team, particularly if you look at the Dodgers in Oklahoma City.

where they are the farthest minor league team from their quote unquote affiliated major league team, the Los Angeles Dodgers, I believe over 1100 miles away. Conversely, your team, the St. Paul Saints, are the closest proximity team to a major league team, and that obviously being the Minnesota Twins. So let's try to dive into that for a sec. There's a pro and con I see there. First and foremost, I've got the Twins right before my...

you know, right outside my back door. I'm 11 miles away in distance, the distance of the team of St. Paul Saints and the Minnesota Twins are 11 miles apart. And that's not a big distance, assuming that folk are coming from the suburbs and from the Twin Cities. Why would a consumer, a fan, choose the St. Paul Saints over their MLB home team?

when it's an equidistant journey.

Derek Sharrer (08:28.942)
It's a loaded question in a good way that there's Yeah, there's a there's a because there's a backstory in st. Paul that that I think is unique to to maybe some other minor league scenarios, but the short answer is If if the minor league baseball team is is doing their job, right? Then then it's a completely different experience to attend a minor league game. Then it is a major league game No question if you want to

Steve (08:29.688)
It's a loaded question. Sent objectively. Yeah, there's a backstory in St. Paul that I think is unique to maybe some other minor league scenarios. But the short answer is if the minor league baseball team is doing their job right, then it's a completely different experience to attend a minor league game.

then it is major league game. But no question, if you want to, if a fan wants to see the best players in the world, but the best baseball in the world, they're gonna go to a major league ballpark if they have that opportunity. If they're looking to have a few laughs, spend time with friends and family in a slightly more affordable and easy and accessible environment.

Derek Sharrer (08:57.278)
If a fan wants to see the best players in the world, the best baseball in the world, they're going to go to a major league ballpark if they have that opportunity. If they're looking to have a few laughs, spend time with friends and family in a slightly more affordable and easy and accessible environment, that's ultimately what the decision-making choice for going to the minor league game that the

Steve (09:20.141)
ultimately what the decision-making choice for going to the minor league game that the

Derek Sharrer (09:26.83)
The unique backstory to St. Paul is that the St. Paul Saints existed as an independent franchise long before the affiliation with the Minnesota Twins. That relationship, the Minnesota Twins relationship is heading into its fifth season. Our franchise is the AAA affiliate of the Major League team. And it's an incredibly unique and exciting relationship to have.

Steve (09:27.18)
The unique backstory to St. Paul is that the St. Paul Saints existed as an independent franchise long before the affiliation with the Minnesota Twins. The Minnesota Twins relationship is heading into its fifth season. Our franchise is the AAA affiliate of the Major League team. And it's an incredibly unique and exciting relationship to have a Major League affiliate and their AAA team.

Derek Sharrer (09:54.026)
a major league affiliate and their AAA team so close in proximity from a player personnel standpoint, from a player development standpoint, it's an incredible advantage for the major league team and it's a really unique opportunity for the fans to see the major league team one afternoon and maybe later on that evening to see the minor league team or the day after, whatever it might be. Having the opportunity to follow those players.

Steve (09:57.207)
so close in proximity from a player personnel standpoint, from a player development standpoint, it's an incredible advantage for the Major League team and it's a really unique opportunity for the fans to see the Major League team one afternoon and maybe later on that evening to see the Minor League team more.

the day after whatever it might be. Having the opportunity to follow those players from one step to the next in your own hometown is really unique. specific to the Saints, this franchise began in 1993 as an independent team.

Derek Sharrer (10:21.806)
from one step to the next in your own hometown is really unique. But specific to the Saints, this franchise began in 1993 as an independent team, not related to Major League Baseball at all. So we had 28 years to develop a brand for ourselves, having nothing to do with Major League Baseball and actually, quite frankly, being successful in spite of.

Steve (10:35.568)
to Major League Baseball at all. So we had 28 years to develop a brand for ourselves having nothing to do with Major League Baseball and actually quite frankly being successful in spite of Major League Baseball and the brand developing almost in spite of Major League Baseball.

Derek Sharrer (10:48.916)
of Major League Baseball and the brand developing almost in spite of Major League Baseball. So those 28 years gave the Saints a unique opportunity to develop a brand, to develop a fan base, to become integrated into the community, to begin sort of as a St. Paul franchise, a St. Paul entity that was really beloved by the community in St. Paul, but then to expand out.

Steve (10:56.312)
So those 28 years gave the Saints a unique opportunity to develop a brand, to develop a fan base, to become integrated into the community, to begin sort of as a St. Paul franchise, a St. Paul entity that was really beloved by the community in St. Paul, but then to expand out beyond just St. Paul into the greater Twin Cities market and even become more of regional asset in the state of Minnesota.

Derek Sharrer (11:18.242)
beyond just St. Paul into the greater Twin Cities market and even become more of a regional asset in the state of Minnesota. So a really unique opportunity to develop that brand above and beyond just that major league affiliation.

Steve (11:26.316)
a really unique opportunity to develop that brand above and beyond just that major league affiliation. Clear. You know, it's interesting. I candidly, coming from New York City and raised originally in the suburbs of those beautiful five boroughs, at the end of the day, I never even knew there was such a thing as a minor league.

Derek Sharrer (11:50.989)
Yeah.

Steve (11:51.359)
baseball. just never, the cyclones in Staten Island is something that in my adult life I professionally just learned about, not that I had any affiliation with them, but just started to come on the radar for me. Having not been brought up in that part of New York City, it was not again, it never traversed across my radar.

What I find so interesting is that there's a rich history in minor league baseball. And I'm interested in really in this show from a corporate sponsorship standpoint and fan standpoint. And when you look back at the minor leagues, they almost go back as far as Abner Doubleday. And you're talking about a rich history of the international league that you're in.

And obviously there's been somewhat of a consolidation, a smart one, again, in my humble opinion of how the MITRE League can be better organized to make it more tangible and more ingestible. And it seems like there's a lot of changes that have taken place through your company, Diamond Baseball, which is owned originally by Endeavor, which was acquired by Private Equity, Silver Lake, and it's a remarkable.

transformation that's taking place with the blessing of the commissioner of Major League Baseball, Rob Manfred, and you're part of the International League in Minor League that had lots and lots of leagues, but you have 20 teams of the 120 today, there used to be, guess, prior to that 150, 160 teams, and now you have 120, and in your league, the International League AAA that you're a part of,

What I found so interesting in the minor league is there were about 30 million people, at least the stat I read, which I believe is from Major League Baseball, that come through the gates every year in minor league baseball. And that floored me.

Steve (13:45.689)
In your league, in the international league of those 20 teams, I think the stat according to baseball reference was about an average of about 7,000 folk a game, fans a game, representing almost about 9.1 or 9.2 million people attending the international league, minor league team games for which you play approximately 150 games a year. So there's clearly an enormous value proposition here, Derek. Like,

That's extraordinary. Almost 10 million people coming to watch your games of those 20 teams in two divisions.

So they've gotta be getting something very meaningful. And so what I wanna understand from, if I'm a sponsor and you opted, as you said five years ago, to come into this affiliation with the Minnesota Twins.

There's gotta be a pure play value proposition A for your team. And that means revenue. There's gotta be some either broadcast benefit, ticket benefit, additional revenue accrual, merchandising benefit. There's gotta be some substantial VIP corporate hospitality incremental. If we look at the fundamental revenue uptick, let's first look at it as a team.

And then let's look at it from again that fan side, why they feel so enriched coming to your heart. So first on the team side, you joined five years ago, the affiliation with the twins. What was that driving financial motivation?

Derek Sharrer (15:30.158)
The first, I guess, change that we would see from being an independent franchise to making a shift to affiliated baseball would be the number of games. Very simply, you can just do the math. We played 100 game schedule as an independent franchise, 50 at home, 50 on the road. Now as a AAA franchise, we play.

Steve (15:31.249)
The first, I guess, change that we would see from being an independent franchise to making shifts to affiliated baseball would be the number of games. Very simply, you can just do the math. We played 100 games scheduled as an independent franchise, 50 at home, 50 on the road. Now as a AAA franchise, we play.

Derek Sharrer (15:57.102)
150, as you mentioned, 75 games at home. So just 25 more home games in and of itself creates a value proposition. One from a ticket and game day revenue, and then two from an overall, from a partnership perspective, having the opportunity to draw 25 more games worth of fans and then have that value added into the value proposition for our partners.

Steve (15:58.233)
As you mentioned, games at home. So just 25 more home games in and of itself creates a value proposition. One from a ticket and game day revenue and then two from an overall, from a partnership perspective.

having the opportunity to draw 24, 25 more games with the fans and then have that value added into the value proposition for our partners. So right off the bat, it's just more baseball from 50 home games to 75 home games. For us specifically, there was a very unique opportunity to partner with a Major League franchise in our market who in many ways we've been

Derek Sharrer (16:26.19)
So right off the bat, it's just more baseball from 50 home games to 75 home games. For us specifically, there was a very unique opportunity to partner with a Major League franchise in our market who, in many ways, we had been competing with, bumping heads with over the first 28 years of our history.

Steve (16:45.914)
competing with, bumping heads with over the first 28 years of our history, but had been operating successfully in the same market for those 28 years. So to be able to marry those two organizations together and begin to work together was just a really unique experience.

Derek Sharrer (16:53.058)
but had been operating successfully in the same market for those 28 years. So to be able to marry those two organizations together and begin to work together was just a really unique opportunity that we were very excited about. And it felt as though it was sort of the next step in the life of the Saints franchise. Our brand was built on being somewhat edgy, somewhat mischievous.

Steve (17:06.548)
opportunity that we were very excited about and it felt as though it was sort of the next step in the life of the Saints franchise. Our brand was built on being somewhat edgy, somewhat mischievous, somewhat counterculture relative to Major League Baseball in the early history of the Saints, or at least this version of the Saints. mean there's a history that precedes this franchise.

Derek Sharrer (17:22.606)
somewhat counterculture relative to Major League Baseball in the early history of the Saints, or at least this version of the Saints. mean, there's a history that precedes this franchise in St. Paul that dates back to the late 1800s. when I talk about the early history, I'm really talking about 1993 and forward. the first two decades of the Saints history, it was

Steve (17:36.425)
in St. Paul that dates back to late 1800s. when I talk about the early history, I'm talking about 1993 and forward. the early, the first two decades of the Saints history, much of what we did was in some ways in opposition to Major League Baseball. Not necessarily specifically directed toward the twins, but just.

Derek Sharrer (17:51.682)
very much of what we did was in some ways in opposition to Major League Baseball. Not necessarily specifically directed toward the twins, but just we were not a Major League team and we were not trying to be a Major League team.

Steve (18:03.032)
We were not a Major League team and we were not trying to be a Major League The bad news bears irreverent. Let's get attention. Demolition. A lot of action to draw attention.

Derek Sharrer (18:10.899)
Yes. Yes.

As our former president and owner Mike Vec would say, we were quite willing to light ourselves on fire to get a little bit of attention, particularly as a minor league team in a major league market. And there are challenges and advantages to the... Disco demolition, no question.

Steve (18:20.192)
saying we were quite

to get a little bit of attention, particularly as a minor league team and Major League Market. And there are challenges in it. And by the way, literally with Mike's background with Demolition Day on Disco, Disco Demolition Day, a one-time wonder and literally lighting a fire, figuratively and literally. Thank you. Kamiski Park was lit on fire.

Derek Sharrer (18:38.984)
there was, Comiskey Park was lit on fire on that particular evening. so, and there are challenges and advantages to being a minor league team in a major league market, as we found in St. Paul, mostly advantages. But one of the challenges is being a minor league team in a major league media market to get the attention that might

Steve (18:48.184)
So, and there are challenges and advantages to being a minor.

So how does this transition, tangibly, what does it do? Because as a fan, not getting, so I understand it from a front office standpoint, but from a...

Derek Sharrer (19:06.936)
still craved for the franchise in those early years, you did have to virtually light yourself on fire.

Steve (19:22.742)
from a fan standpoint, I don't understand that nuance, meaning to me what you were prior to the affiliation with the twins, does that really come into play in my decision making? And for you, again, getting affiliated with the twins, so how did that vying for sponsorship, vying for media coverage, how does that affiliation then?

Derek Sharrer (19:26.829)
Yeah.

Steve (19:49.643)
I understand you're getting into the pipeline of a big, big entity with powerful, powerful individuals who run that organization with lots of money behind it. But how does that ultimately change your bottom line day to day? And if you could give us a before and the after of a few examples of why you're so pleased with the affiliation. Sure. So just very quickly, from a faint perspective,

Derek Sharrer (20:14.776)
Sure. So just very quickly, from a fan perspective, there were two aspects. One negative, one positive. It was important for us to make sure that our fans understood, that our community understood that the Saints experience wouldn't change. It was very important to understand that almost in spite of becoming part of much larger entity, Major League Baseball and the Minor League Baseball affiliate structure, that

Steve (20:18.892)
There were two aspects, one negative, one positive. It was important for us to make sure that our fans understood, that our community understood that the Saints experience wouldn't change. It was very important to understand that almost in spite of becoming part of much larger entity, Major League Baseball and the minor league baseball affiliate structure, that we wouldn't be corporatized by that.

Derek Sharrer (20:44.706)
we wouldn't be corporatized by that, that the experience of enjoying a Saints game would remain the same. So that was one thing that was incredibly important to be cautious about from a negative standpoint. From a positive perspective, it tied the baseball community together in the Twin Cities in a way that allowed us to, we were always open to everybody, but I think there were many who felt as though we weren't about baseball.

Steve (20:47.256)
that the experience of enjoying a Saints game would remain the same. So that was one thing that was incredibly important to be cautious about from a negative standpoint. From a positive perspective, it tied the baseball community together in the Twin Cities in a way that allowed us to, we were always open to everybody, but I think there were many.

felt as though we weren't about baseball, that we were only about the silliness and the fan experience. The baseball was always very good for the Saints, whether it was Darryl Strawberry or J.D. or Jack Morris historically, Isla Borders, some amazing baseball stories that have come out of the Saints' history. So we always took the baseball very seriously, but I think we were known.

Derek Sharrer (21:13.166)
that we were only about the silliness and the fan experience. The baseball was always very good for the Saints, whether it was Darrell Strawberry or J.D. Drew or Jack Morris historically, Isla Borders. Some amazing baseball stories have come out of the Saints' history. So we always took the baseball very seriously, but I think we were known for not taking anything seriously. the early...

Steve (21:36.729)
So almost a Savannah bananas type of identity if you And you're competing against them in August for two games for which you sold tickets this past November, correct? So it's like the Harlem Globetrotters coming through town

Derek Sharrer (21:42.567)
Yeah, I think the bananas before the bananas and certainly they've taken it to a new level.

Derek Sharrer (21:54.658)
Well, actually they, so we won't be competing against them. They bring their own show. they have their own, the banana, they have banana ball and they have, they bring their own. It is a completely, I don't want to get off on the tangent, but Jesse Cole with the bananas would argue vehemently that it's not the Harlem club charters because they, every game is played by every team to win. But yeah, you definitely understand.

Steve (22:06.904)
It is completely, I don't want to get off on the teams with Jesse Cole with the Bananas with RUV really, but it's not from the home coach because they think every game is played by every team to win. But yeah, you can totally understand. it. So you've integrated, you want to make sure you maintain, it's like a startup that grows, is acquired, but has that important culture and corporate culture that they don't want to lose.

Derek Sharrer (22:26.626)
Yes.

Steve (22:34.464)
to another company that might be an IBM that has a very different corporate culture. And you don't want to put on the blazer per se. You still want to be that very family-esque. Whatever you've cultivated over those 28 years, you didn't in any way want to compromise that. But again, there was this benefit.

Derek Sharrer (22:40.233)
Yeah.

Steve (22:55.796)
of coming into a larger system. And just before we carry on with your response, is there any equity ownership in your organization from the major, when you become a minor league affiliate of a major league team, is there now a legal structure for which you have some sharing of equity with that major league club? No, not necessarily. There are some scenarios where equity exists.

Derek Sharrer (23:16.822)
No, not necessarily. There are some scenarios where equity exists with the Major League franchise, but that's not part of the structure in any way, shape or form.

Steve (23:20.598)
with the Major League franchise, but that's not part of the structure in any way, shape, form. So the twins, there's no, so just to be clear, for the twins, just if, and again, just so I can process, because the message is so interesting. So from a twin standpoint, if I'm, you know, polar in team, what will I get from being the big boy on the block by saying I now have a minor league affiliate in the twin city?

Derek Sharrer (23:51.362)
The major league franchises, there are a few cases where they do have ownership equity in their minor league affiliate. That's really not what the major league franchises are interested in. What the major league franchise are interested in with minor league baseball is a place for them to develop players and fans for that perspective for the major league franchise. mean, that's ultimately what they're trying to do. That this structure has been in place for years and years and ultimately they

Steve (23:51.801)
Major League franchises, there are a few cases where they do have ownership equity in their minor league affiliate. That's really not what the Major League franchises are interested in. What the Major League franchise are interested in with Vitality Baseball is a place for them to develop players and fans for that perspective for the Major League franchise. That's ultimately what they're trying to do. This structure has been in place for years and years and ultimately...

They need to have four communities, four ballparks, four organizations that provide an incredible platform for their players, an incredible place for their players to live, work, play, be healthy, develop physically and mentally as they work.

Derek Sharrer (24:21.538)
They need to have four communities, four ballparks, four organizations that provide an incredible platform for their players, an incredible place for their players to live, work, play, be healthy, develop physically and mentally as they work through this path on their way to the major leagues. So when you have an opportunity as a major league franchise to have one of your...

Steve (24:43.384)
through this path on their way to the major leagues. So when you have an opportunity as a major league franchise to have one of your next step outlet, your AAA franchise, only nine and half to 10, 11 miles away, it is a distinct advantage. And is it usually, and again, please correct me, because I don't in any way suggest to be an expert at all. The numbers I came across, which I questioned until you validate them, I saw somewhere between nine and 10 %

Derek Sharrer (24:51.214)
your next step outlet, your AAA franchise, only nine and a half to 10, 11 miles away, is a distinct advantage.

Steve (25:13.879)
of minor league players, AAA, will ultimately get to play one game in the majors. Is that an accurate step? Yeah, I think it's very accurate. have four, do the math this way, have four minor league teams for every major league team, and then they're even up.

Derek Sharrer (25:20.654)
Yeah, I think it's very accurate. have four, do the math this way, have four minor league teams for every major league team. And then there's another smaller group of players that aren't on a minor league roster that are housed at spring training facilities that every major league team has. So give or take 25 to 30 players at each one of those four stops.

Steve (25:32.307)
There's another smaller group of players that aren't on a minor league roster that are housed at spring training facilities that every major league team has. So give or take 25 to 30 players at each one of those four stops. And then you have a major league team that has 25 to 30 players at the top of that ladder.

Derek Sharrer (25:49.83)
And then you have a major league team that has 25 to 30 players at the top of that ladder. On any given minor league team, the number gets greater as you move up from single A, there are two single A teams, one double A team, and one triple A team. And as a player moves up the ladder within that structure, or as you look up the ladder within that structure, I guess from the outside looking in,

Steve (25:58.873)
on any given minor league team and the number gets greater as you move up from single, there are two single A teams, one double A team and one triple A team. And as a player moves up the ladder within that structure or as you look up the ladder within that structure, I guess from the outside looking in, the number of players as you get higher gets larger proportionally. So there are more players on the triple A team

Derek Sharrer (26:19.948)
the number of players as you get higher gets larger proportionally. So there are more players on the AAA team that have an opportunity to make it to the major leagues than there are on the single A teams just by virtue of those players have advanced. So your numbers are close, maybe a little bit higher than that, but they're very close.

Steve (26:28.856)
that have an opportunity to make it to the major leagues than there are on the single teams. Just by virtue of those players have advanced. So your numbers are close, maybe a little bit higher than that.

So it makes so much sense that you're saying, again, I want to go back to what I said originally and you were absolutely correct to kind of correct my messaging. It's really in many ways a breeding ground for the sport itself.

Derek Sharrer (27:01.974)
No question.

Steve (27:02.58)
And traditionally, and again, I say this with all TLC, I'm just exploring in this capacity, frankly, as someone who's just fascinated by the business model of minor league baseball. And so when I think about it, I get it. If I love the Dodgers and I live in Oklahoma City and I'm 1,100 miles away from LA and I get to see some, an insignia.

of Los Angeles. And for some reason, although I live in Oklahoma, I get to have this affiliation with such a successful storied franchise like Los Angeles. And I'm not too often going to fly my family to Los Angeles to watch a game. This gives me some real, wonderful, meaningful A, baseball exposure, family nostalgia.

memorabilia, the whole sports experience in the most beautiful fashion, know, popcorn, peanuts, mom and apple pie. So I just want to try to again, try to process it. When your team made the decision, and I'm not trying to be invasive at all, it's not my objective at all. Because this is all just publicly consumed knowledge and just trying to understand the process of why

Derek Sharrer (28:18.775)
Yeah.

Steve (28:28.788)
your team that doesn't share equity, and there wasn't this pressure or this financial need to sell equity to the ownership of the Minnesota Twins. And therefore, for you as a beneficiary, I understand you got more games to play, which means in theory we can increase sponsorship revenue, we can obviously increase ticket revenue.

And we should be able if there was substantive media rights sold then I would be increasing my media rights revenue among other aspects of You know poor pure demonstrable revenue generation The altruism is part of I think a minor league experience. I'd really believe that I believe people like you who spent 30 years giving your life to minor league and to

to cultivating the game. You're passionate about it. You became general manager of the St. Paul Saints, if I remember correctly, in the early 2000s. And you've assumed this role over a very patient process. Because you're obviously, I'm not gonna speak for you, but you love the game so much that this is something you gain visceral joy from.

I get the fan journey, but I'm still not getting it in the Twin City. I get it from the New York Mets standpoint that the Buffalo Mets, I believe, is it the Buffalo Mets that are? Syracuse, excuse me, Syracuse Mets. So the Syracuse Mets are a six hour drive for us from the five boroughs. I get that, I get it. New York State, I've got two teams and.

Derek Sharrer (29:56.142)
See you, cubes. Yeah.

Steve (30:10.206)
and I'm gonna be loyal to my New York teams and it's Upstate New York.

Can we try to understand the material benefit for you? it just, is it that, if you will, monolithic? Is it really about additional games, additional revenues at the gate? Is that what it ultimately boiled down to in that decision making process?

Derek Sharrer (30:36.918)
No, there's definitely more than that. look at the, I guess look at the experience. I can speak to the Saints experience, obviously better than any other, but look at the Saints experience in the form of a pie chart and everything that a fan gets out of coming to a Saints game, which in turn is what benefits the Saints, right? Our relationship with our fans is the most important relationship we have. So.

Steve (30:40.312)
guess look at the experience, I can speak from the Saints experience obviously better than any other, but look at the Saints experience in the form of a pie chart and everything that a fan gets out of coming to a Saints game, which in turn is what benefits the Saints. Our relationship with our fans is the most important relationship we have.

So one of those slices of the pie is the baseball. And in some cases, what makes that piece of the pie a little bit bigger, a little bit smaller is the brand affiliation with the Major League franchise. You mentioned the Oklahoma City Dodgers.

Derek Sharrer (31:05.294)
One of those slices of the pie is the baseball. And in some cases, what makes that piece of the pie a little bit bigger, a little bit smaller is the brand affiliation with the major league franchise. You mentioned the Oklahoma City Dodgers and Dodgers fans with LA Dodgers fans. So.

Steve (31:25.56)
and Dr. Spence with LA Dr. Spence. So, affiliating with the twins, we know that we're in, obviously we're in the Minnesota twins market.

Derek Sharrer (31:32.238)
Affiliating with the twins, we know that we're in, obviously we're in a Minnesota twins market. We're 11 miles away from Target Field and we've been operating successfully in twins territory as they call it for over 30 years. So we know that from a baseball fan perspective, there is a relationship in Minnesota with the Minnesota twins. We had developed a brand for the Saints.

Steve (31:38.457)
11 miles away from Target Field. We've been operating successfully in twins territory, as they call it, for over 30 years. So we know that from a baseball fan perspective, there is a relationship with the Minnesota Twins. We have developed a brand for the Saints, exclusive of the Twins, for 28 years prior to affiliating.

Derek Sharrer (31:59.786)
exclusive of the twins for 28 years prior to affiliating. What we felt we could do by entering into this relationship with the twins, this affiliation, was we could make that piece of the experience pie for the Saints just a little bit larger and a little bit more depth. Fans now, as I was saying before, the baseball was important for us as an independent franchise.

Steve (32:04.716)
What we felt we could do by entering into this relationship with the Twins, this affiliation, was we could make that piece of the experience of high for the Saints just a little bit larger and a little bit more depth. As I was saying before, the baseball was important for us as an independent franchise, but it could only be so good. We could only provide...

Derek Sharrer (32:29.346)
but it could only be so good. We could only provide a certain level of play on the field. And there was never going to be the attachment to the baseball on the field the way there is at the major league level. And we're okay with that. And we were successful without having that major league connection on the field. But by entering into that, entering into that relationship,

Steve (32:34.622)
certain level of play on the field. And there was never going to be the attachment to the baseball on the field the way there is at the Major League level. And we're okay with that. We were successful without having that Major League connection on the field. But...

By entering into that relationship, we were able to now provide all the things that we provided to our families over the years. The affordability, the fun, the laughter, the time with family and friends, all of the things that are the most important to the Saints' Grand, we were now able to add.

Derek Sharrer (32:57.95)
we were able to now provide all the things that we provided for our fans over the years, the affordability, the fun, the laughter, the time with family and friends, all of the things that are the most important to the Saints brand, we were now able to add the top level of minor league baseball available. We were able to add the top prospects, whether they are with the twins or with the visiting team coming through.

Steve (33:14.744)
Excellent.

Derek Sharrer (33:24.11)
As well as being only nine miles away from the major leagues, there was the occasional opportunity that a major league player would be playing on our field, whether it was Byron Buxton on a major league rehab. So we were able to bring something new to the value proposition. And in 28 years of the Saints, this provided us something different for the next at least 10 years and to provide something additive that didn't exist.

Steve (33:44.651)
This provided us something different for the next at least 10 years and to provide something additive that didn't Clear, clear. Derek, just to interject for one quick sec. So even if you could have had 150 games without being affiliated with the Minnesota Twins and we doubled your, in other words, if we increased your schedule by 50%, went up to the 150 from the 100 that you had for 28 years.

Derek Sharrer (33:53.934)
So just providing even more of that. Yeah.

Steve (34:12.66)
at the end of the day, the caliber of play has increased. From a sales standpoint, selling sponsorship rights, I am far more grateful to you in management that I get to walk in as a sales exec for your company, for your brand. And the first thing that comes out of my mouth is we are the triple A team for the Minnesota Twins. So there's that gravitas, that...

elevated brand value, goodwill, just qualitative understanding that I am, maybe I can't afford a sponsorship at the Twins, but I can perhaps play in the sandbox with the St. Paul Saints knowing that I'm still part of that family that makes it far more palatable to appropriate a part of my budget your way. And if I'm CHS,

I'm tickled pink because they came in in 2014 as your naming rights sponsor for what was the Midway Stadium and you had a 64 million billed money coming from all parts of the community from your own holding group and are preceding your holding group but those who were affiliated with the team.

Derek Sharrer (35:11.662)
Yeah.

Steve (35:26.484)
multiple areas of sources of funds to fund that new stadium and in comes in 2014 CHS and they have a hundred games that are getting media coverage and now let me rephrase that there are 150 games for which half of them are played at home they had 50 games and now they have another literally 50 % increase in number of home games

Without getting into it, the presumption is that therefore there is going to be an inflated fee naturally for the next time that deal is up, depending if that was a 10, 12, 15 year deal or 20 year deal. I don't know how minor league deals are structured. So for title sponsor rights, naming rights of a stadium, but let's just say it was an eight to 10 year deal. And that certainly puts you in a better position because CHS will be happier.

And they've got more play more media coverage more fan engagement more exposure to their brand along with all your other Sponsors and they're quite a number of

Derek Sharrer (36:26.764)
Yeah, it's all of that is 100 % correct with just a slight spin in St. Paul's situation. were, to be clear, we weren't seeking the opportunity to affiliate with a major league franchise. We weren't seeking the opportunity to become the AAA affiliate of the twins. You referred to it earlier about sort of the...

Steve (36:38.924)
We weren't seeking the opportunity to affiliate with a major league franchise. We weren't seeking the opportunity to become the AAA affiliate of the twins. You referred to it earlier about sort of the...

Derek Sharrer (36:51.374)
the change from 2020 to 2021 in minor league baseball where major league baseball in essence took over minor league baseball operations and restructured going from 160 to 120 teams. We were faced with just an incredible opportunity and decision that we weren't seeking. And you mentioned CHS. CHS was incredibly excited and satisfied and pleased.

Steve (36:51.704)
the change from 2020 to 2021 in minor league baseball where major league baseball in essence took over minor league baseball operations and restructured going from 160 to 120 teams. We were faced with just an incredible opportunity and decision that we weren't seeking. And you mentioned CHS. CHS was incredibly excited and satisfied and pleased with the relationship

Derek Sharrer (37:20.462)
with the relationship they had with the Saints. They entered into that relationship with really no, in 2014, with no vision of that changing from being an independent franchise to an affiliated. we were in a very, again, a wonderful 28 year history of a tremendous fan base, a tremendous community. We had worked with the state and the city of St. Paul to build an amazing ballpark that opened in 2015.

Steve (37:21.658)
they had with the same state they entered into that relationship with really no in 2014 with no vision of that changing from from being an independent franchise to an affiliate so we were in a very again a wonderful 28 year history of a tremendous fan base a tremendous community we have worked with the state and the city of st. Paul to build an amazing ballpark

that opened in 2015, great partners and partnerships. Everything was exactly where we would have wanted it to be. And then because of this restructure at the major league level, this opportunity presented itself. while it seems like a no-brainer, from a Saints brand perspective, it wasn't. mean, we had to think long and hard about whether...

Derek Sharrer (37:49.272)
great partners and partnerships. Everything was exactly where we would have wanted it to be. And then because of this restructure at the major league level, this opportunity presented itself. while it seems like a no brainer, from a Saints brand perspective, it wasn't. I mean, we had to think long and hard about whether this decision made sense for us and.

Steve (38:13.336)
decision made sense for us and ultimately we decided it did for many of reasons that we've been talking about and no question the end result of that as happy as CHS was with the deal they ended into in 2014 but for the opening of CHS 2015 they're even more happy now that they

Derek Sharrer (38:16.14)
And ultimately we decided it did for many of the reasons that we've been talking about. And no question, the end result of that as happy as CHS was with the deal they entered into in 2014 for the opening of CHS Field in 2015, they're even more happy now that they, for all the reasons you mentioned, that the additional games, the additional exposure, that they've even developed a relationship now at the major league level with the Twins that didn't exist.

Steve (38:34.488)
for all the reasons you mentioned, the additional gains and the additional exposure, that they've even developed a relationship now with the major league level twins that didn't exist prior to the affiliation. So I think I've used the term earlier in the conversation of tying the baseball community together in a way that it never was before the affiliation. That's a perfect example of the relationship that CHS has with the Saints that has now expanded its way to target field.

Derek Sharrer (38:44.76)
prior to the affiliation. So I think I've used the term earlier in the conversation of tying the baseball community together in a way that it never was before the affiliation. That's a perfect example that the relationship that CHS has with the Saints that has now expanded its way to target field is a perfect example of how sponsors in our market, how corporate partners in our market have found the value. That's happened in reverse as well.

Steve (39:04.442)
is a perfect example of how sponsors in our market, how corporate partners in our market have found the value. That's happened in reverse as well. We have had a relationship with a grocery, Cub is the name of the company, formerly Cub Foods, now Cub, based here in Minnesota, an upper Midwest regional entity. They have been a partner of ours for years. They've been a significant partner of the twins, but...

Derek Sharrer (39:13.198)
We have had a relationship with a grocer, Cub is the name of the company, formerly Cub Foods, now Cub, based here in Minnesota, but an upper Midwest regional entity. They had been a partner of ours for years. They had been a significant partner of the twins. But as we entered into this partnership with the twins, this affiliation,

Steve (39:33.785)
while as we entered into this partnership with the twins, this affiliation, Cub has stepped up their partnership with the Saints because they feel like there's a synergy between the relationship with the twins, the relationship with the Saints, and the relationship with the baseball fan community in 26. Point of sale activity through a partner like that? How significant is the promotional side of that? And how much have you seen any incremental? Have you seen when you have a brand like that

Derek Sharrer (39:39.352)
CUB has stepped up their partnership with the Saints because they feel like there's a synergy between their relationship with the Twins, their relationship with the Saints, and their relationship with the baseball fan community in the Twin Cities.

Steve (40:03.818)
that has a very strong retail presence. Are you starting to see any metrics from a measurement standpoint that suggests having that very positive partner that's willing to promote and take the IP that you have and put it out to the fan front and center at point of sale? Are you seeing activations in that capacity at this time? Yeah, no question. The opportunity to work

Derek Sharrer (40:29.548)
Yeah, no question. The opportunity to work with Cub on various vendor relationships that they have. Certainly the opportunity to put information in people's hands and in significant retail locations. Again, we did have a relationship prior to the affiliation with the twins. that we had already had an opportunity as a minor league franchise in the twin cities to experience those types of retail activation.

Steve (40:35.864)
that they have, certainly the opportunity to put information in people's hands in significant retail locations. Again, we did have a relationship prior to.

the affiliation with the twins so that we had already had an opportunity as a minor league franchise in the Twin Cities to experience those types of retail activation partnerships. But no question, again, sort of knitting the baseball community together for the first time in 28 years from when we operated separately to operating as partners in the market.

Derek Sharrer (40:58.894)
partnerships, but no question, just sort of knitting the baseball community together for the first time in 28 years from when we operated separately to operating as partners in the market has been an advantage.

Steve (41:14.936)
And if you look at the average friend, what's the average ticket price if I want to go to your game? Over the next few days What would be an average ticket price at your stadium and by the way just on the size of stadium? What what is the overall capacity?

Derek Sharrer (41:31.534)
So our seating capacity is listed as 7,210. One of the smaller AAA ballparks, there was a, prior to Major League Baseball taking over Minor League Baseball and that relationship becoming much closer, there was a 10,000 seat rule, so to speak, that to be a AAA team, had to...

Steve (41:44.665)
taking over minor league baseball and that relationship becoming much closer, that there was a 10,000 seat rule, so to that to be a AAA team, you had to, in some way, or form, have a capacity of 10,000. And that's changed now. And that 10,000 capacity didn't mean 10,000 seats, it just meant you gotta be able to put 10,000 people in a building.

Derek Sharrer (41:58.048)
in some way, or form have a capacity of 10,000. That's changed now. And that 10,000 capacity didn't mean 10,000 seats. just meant you had to be able to put 10,000 people in a building. But so if you look at, but if you look at AAA ballparks that were built in the early 2000s, they're big. They're incredibly big. You mentioned Oklahoma City. It's a two deck.

Steve (42:11.489)
So in the bullpen you had like 600.

They're incredibly big. You mentioned Oklahoma City. It's a two deck facility that can see, don't know their capacity exactly, but probably up to 12,000 people. The ballpark in Indianapolis.

Derek Sharrer (42:25.368)
facility that can seat, I don't know their capacity exactly, but probably upwards of 12,000 people. The ballpark in Indianapolis similarly can seat up to 15,000 people. There's a ballpark in Memphis that closes in on, that at one point closed in on 20,000 seats. So some really big ballparks. so by comparison, CHS field is fairly small. wasn't designed to be, it wasn't built with AAA baseball in mind.

Steve (42:34.794)
similarly, can see that to 15,000 people. There's a ballpark in Memphis that closes in on, that at one point closed in on 20,000 seats. So some really big ballparks and so by comparison, CHS Field is fairly small. It wasn't designed to be, it wasn't built with AAA baseball in mind.

Derek Sharrer (42:54.648)
But I think what the industry has learned over time is that sell-through rate is so important. To match your capacity with your sell-through rate and the rate of sale that you're, you want a full building. From an experience perspective, a full building is a lot more entertaining for fans. The experience is better than a big building that isn't full. There's just...

Steve (42:54.936)
But I think what the industry has learned over time is that sell through rate is so important to match your capacity with your sell through rate and the rate of sale that you're, you want a full building. From an experience perspective, a full building is a lot more entertaining for fans. The experience is better than a big building that isn't full. There's just, you know,

Derek Sharrer (43:23.278)
You know exactly, you've been in a beautiful big building that wasn't full and the energy isn't there the way it is in a smaller building that is close to...

Steve (43:24.89)
You know exactly, you've been in a beautiful big building that wasn't full and the energy isn't there the way it is in a smaller building that's out. In fact, many leagues that are trying to get off the ground very often make that fatal flaw and they go to large venues and they have a fraction of what's needed to create any critical mass and it's a real disservice to building a property.

to building a meaningful relationship because it just never works out well for the sports, particularly a burgeoning or growing potentially successful entity. But again, you guys have had a history in some capacity for over 140, almost 40 years as a quote unquote, if I look back at the oldest minor league teams.

And when you look at sponsorship, look at an announcement came out yesterday that the MLB announced they have 40 official partners of the MLB. And they're paying some serious, you know, contribution to the Major League Baseball for that. When you look at minor league, first of all, from a league structure in the international league, you recall the international league. Again, I just learned this in the past week because Cuba and Puerto Rico had at one point

had teams represented in the international league many, many, decades ago. The game for, I believe Cuba was played here when Castro took over and literally the games were played in the United States. So there are no international teams but it's called the international league. Do we have in minor league baseball, triple A, do we have?

league sponsors the way traditional pro leagues will have contributors to the overall entity itself of the National League.

Derek Sharrer (45:20.718)
At this point, no, I definitely appreciate what you've done in learning about the league structure and the history with the international league. And it's still important, but from a business perspective, it's become a little bit less important than it was even five years ago prior to the restructuring of minor league baseball.

Steve (45:39.205)
even five years ago prior to the restructuring of Miami League Baseball. Major League Baseball is now operating in a way where the leagues are incredibly important from a player development perspective and from a league scheduling perspective and from a historical perspective as well. in essence, there isn't the league office the way they're supposed to be. Is there a commissioner, the way?

Derek Sharrer (45:44.94)
Major League Baseball is now operating in a way where the leagues are incredibly important from a player development perspective and from a league scheduling perspective and from a historical perspective as well. But in essence, there isn't the league office the way there used to be. Historically, not of minor league baseball, In essence, it's...

Steve (46:09.816)
So you have like a COO or you have a...

Derek Sharrer (46:14.906)
You may have heard of the phrase one baseball and that is the way major league baseball now looks at all of baseball. Professional minor league baseball, triple A, double A, single A, to independent leagues, which are now called partner leagues, to amateur baseball. There's an effort on the part of major league baseball to tie all of baseball together under the one baseball umbrella.

Steve (46:37.282)
baseball to tie all of baseball together under one baseball umbrella. there isn't this separation of league operations the way they're used to. Each league they used to have a commissioner and a president. In a lot of cases, leagues have their own.

Derek Sharrer (46:43.342)
So there isn't this separation of league operations the way they're used to be. Each league did used to have a commissioner and a president. In a lot of cases, leagues have their own sales and marketing team that did go out and sell league related partnerships. Now that's all done out of Major League Baseball's office. And those partners are sought for minor league baseball as a whole, as opposed to each league.

Steve (46:55.352)
sales and marketing team that did go out and sell league related partnerships. Now that's all done out of Major League Baseball's office and those partners are sought for minor league baseball as a whole as opposed Clear, clear. So we don't have it on a quote unquote national level or trans league level.

When you look at the sponsorship again, and again, I bring up the issue of the 40 and growing number of partners, it's a lot. It's a lot, first of all, to compete against 39 other companies, many are super brands, and try to reach the same mindscape of the consumer with a message, and I'm sponsoring something nationally called a league. It's very competitive, very difficult, lot of dollars going after the same, many of the same folk.

And that's not an easy undertaking. And obviously when you look at minor league, you cultivate a group of lots of local partners and some national partners, but those who want to come in with a regional play or in particular. When you look at that sponsorship drive and feeling committed to the brand, your brand,

What would you say if I, if we together did a sampling of all of your partners, and I'm going to take a shot and say setting aside any type of what we'll call VIP corporate hospitality. Let's say there's somewhere between 23 and 30 partners that you might have of name brands that the folk that anyone locally would know of. and that could be an auto dealership. That could be a local health partner. and then to a porting, pouring rights partner that you might have with a Pepsi type of,

relationship if we could look at that and we did a sampling of all of your relationships and sponsorship and We said to them look many of you have many sponsorships, right? You have sponsors with athletes Stadia, know teams leagues events What would you say on average? would be This kind of unit if there was one unified message

Steve (49:00.49)
of why they said this is just going back to the value proposition that we get as a sponsor. I've paid X number of dollars and Derek as president of the team and again involved regionally with other properties, your group as I understand it has about 40 minor league teams affiliated with Diamond Baseball. What do you think would be that resounding message of affirmation?

Derek Sharrer (49:22.435)
Mm-hmm.

Steve (49:30.326)
towards the St. Paul Saints, if we polled those, let's call it 20 plus companies that have paid you money to get clear cut value to their brand, what would be the response? Two words, access and connection. Okay, define access. Sure, sure, the access that partners, like you mentioned, the access that partners have to...

Derek Sharrer (49:44.492)
Yeah, two words access and connection. Sure, sure the the access that that partners. Like you've mentioned the access that partners have to to the Saints fan, the Saints experience, the Saints community. We're just minor league baseball. I'm speaking of the space Saint specifically, but minor league baseball of which you mentioned Diamond Baseball Holdings.

Steve (49:59.021)
to the Saints fan, the Saints experience, the Saints community. We're just, minor league baseball, I'm speaking of the Saints specifically, but minor league baseball, of which you mentioned, diamond baseball holdings, now owns a significant number of teams and has a...

Derek Sharrer (50:13.612)
now owns a significant number of teams and has another view of, you've talked about leagues, you've talked about Major League Baseball, Diamond Baseball Holdings brings sort of another collection of teams that have an opportunity to create a value proposition in and of themselves. But access and connection are the things that stand out that differentiate Minor League Baseball.

Steve (50:36.632)
You said access to fans. gather access to athlete, to player. Would you say it's a much easier undertaking than it might be?

With I'm trying to reach Aaron judge at the Yankees and facilitate that do I have greater access in the minor league? as a sponsor

Derek Sharrer (50:57.466)
In some ways, yes, not necessarily to specific players, because even at the AAA level and even at the single A level, minor league players are part of a players union. They all have agents. So the difference from major league to minor league baseball isn't that significant from a player perspective, but from a sort of broader view of access to the team.

Steve (51:14.488)
I would never have thought that thank you for sharing that

Derek Sharrer (51:26.452)
and the team, the players on the field holistically, yes, maybe not individual players. You're still going to align with a top prospect working his way to the major leagues. I'll use Walker Jenkins as a player in the Twins organization, the number one draft choice a couple years ago, the top prospect in the organization working his way up. You're still going to have to go through everything that you go through with a major league team, with a major league player that you do with a Walker Jenkins.

But access to the team holistically, yes, is easier at the minor league level.

Steve (52:01.981)
So we want to do a promo night you're making it you to be frank you work so much harder

for the sponsor if you don't mind me saying in a minor league setting just having read about some of your past undertakings on behalf of Brands on behalf of just creating fun for the fan There's a there are a lot less barriers to trade if you will whether a it be financially be as you said if someone has a great idea and They're gonna tell you while you're using a group like stellar algos platform now

Derek Sharrer (52:10.616)
Sure.

Derek Sharrer (52:20.728)
Sure.

Steve (52:34.932)
to drive fan engagement, get more people in the seats and fill those 7,000 seats. Average capacity is a little over 6,000 for the average AAA team. One thing about, again, just for those who don't know, Stellar Algo is a tech platform and it was very highly rated in 2023 by Sports Business Journal as an upcoming platform. They have a relationship with a whole host of teams at all levels in sports and they're growing.

quite dramatically and favorably. And obviously for you, a fan engagement platform and technology, was the one part I wanna just capture before we do this again sometime in the future. And by the way, for those who don't know, if you wanna find someone who's growing in the ranks of a lot of power in the minor league, that's Derek Scherer right here. And he made a great point.

And it made me realize that one of the most important things to think about is that those 40 teams that your company has an affiliation with owns outright. That goes back to my earlier question about, do you have a lead that has an affiliation with league sponsors? Well, one need not be.

to AI intelligent or if you will Einsteinian to understand that right there those 40 teams comprise an investment platform from a sponsorship basis that creates its own critical mass at 40 that I can start getting some serious play routinely throughout this country of ours that gives me a lot of exposure at a base level of fan that has such a passion and appreciation for the sport.

that I can start tying in not only on a singular basis, but you can see obviously that it's just a function of time, if not already, where I'm starting giving the opportunity. And if I'm in the Diamond Baseball Holdings Group, I'm selling something on an aggregate basis that's giving me entree to St. Paul and many, many other teams which we own. I wanna just cap off with going back to Stellar Algo as one example of technology part.

Steve (54:51.19)
Look, we had Moneyball, we're in the world, my main company is SportsBiz, which is frankly a building software to help optimize, maximize, and measure sponsorship. I should mention for declaration, CHS is one of our clients. So with that said, when we look at technology being part of a big organization, obviously post-Moneyball,

with the Oakland A's and Billy Beane. We had the advent of data science teams coming into Major League Baseball and many other sports thereafter.

when you're in a minor league play and you have the same objectives very often of a major league team. We want to fill seats, we want to generate revenue, we want to get great, great, obviously distribution of media rights and start being seen by more and more people, right? We want to sell memorabilia, we want to increase our VIP corporate hospitality. There's so much we want to achieve. Do we see other aspects of technology in this very rapidly, you know, just...

almost exponentially accelerating tech environment on a daily if not weekly basis that you're starting to deploy Derek that's important to you to think about that maybe two years ago you didn't.

Derek Sharrer (56:10.574)
It's incredible. I mean, it's so incredibly fast moving. It's almost impossible to keep up with. You mentioned Stellar Argo. That's a perfect example of how minor league baseball teams, the industry as a whole, or Diamond Baseball Holdings, as you so eloquently described, these technology platforms, the tech stack that can be created with the multiple platforms,

Steve (56:25.42)
minor league baseball teams, the industry as a whole, diamond baseball holdings as you so eloquently described. These technology platforms, the tech stack that can be created with the multiple platforms just allow us the opportunity to understand our fans that much better. Understand who they are, where they come from, where they go.

Derek Sharrer (56:40.75)
Just allow us the opportunity to understand our fans that much better, to understand who they are, where they come from, where they go when they're not in the ballpark, how many times they visit us and why. There's so much information to be gained and utilized. The analytical side of the minor league baseball business, the sports industry in general, but obviously we're talking minor league baseball here.

Steve (56:53.272)
how many times they visit us and why there's so much information to be gained and utilized on the analytical side of the minor league baseball business, the sports industry in general, but obviously we're talking minor league baseball here. It's incredible how much it's changed and elevated over the past five years specifically. You can look back.

Derek Sharrer (57:10.958)
It's incredible how much it's changed and elevated over the past five years specifically. mean, you can, you can look back 10, 15, but this, this five year window has been incredible and, and diamond baseball, the teams working with diamond baseball holdings, many teams under the minor league, the entire one 20 minor league baseball team umbrella. Um, but, but these platforms that are being introduced.

Steve (57:21.016)
10-15 but this five-year window has been incredible and the team working with Diamond Baseball Holdings, many teams under the entire 120, the baseball team umbrella, but these platforms that are being introduced that help us again understand better who our fan is, where they come from, why they make their choices.

Derek Sharrer (57:39.464)
that, that help us again, understand better who our fan is, where they come from, why they make their choices. you know, a very simple goal for us as an organization, for diamond baseball holdings as an organization is, is, is to get fans to come to one more game. Like let's, we think we can get them here once we think we can entertain the heck out of them, but how do we make sure we get them here for one more game? And how does that compound?

Steve (57:48.569)
You know, a very simple goal for us as an organization, for Diamond baseball buildings as an organization is to get fans to come to one more game. We think we can get them here once, we think we can entertain the heck out of them, but how do we make sure we get them here for one more game and how does that compound?

Derek Sharrer (58:08.78)
relative to our business from a revenue perspective, it's almost absurd to start running those numbers. And there are several platforms that help us do that.

Steve (58:09.088)
relative to our business from a revenue perspective, it's almost absurd to start running those numbers. And there are several platforms that help us do that. And just as a closing note, our last episode, last week's guest was actually Mika White Harris, who's the EVP of revenue and chief business officer, chief business officer at the Chicago Bears.

And she was actually at the Minnesota Twins as I believe chief revenue officer for a short stint and Mika.

actually echoed word for word, Derek, what you just said. By the way, I should mention Chicago Bears are the 16th according to Sportico and the head of Sportico's valuation of these 153 teams in professional sport was the one who codified at Forbes the valuation methodology, Kurt Badenhausen, and he listed the Chicago Bears as 16th most valuable franchise in the country. So it's so interesting.

and we have you as president of this team and obviously regional head of many other properties. Your words were identical. We need to know what did my fans engage? What did they buy from us? What did they like? And yes, it's a revenue motivation, but you know, and it's very much totally symbiotic.

We want the revenue, but we can only get the revenue if we keep them satisfied and beyond satisfaction. We go ahead of the curve. Mika brought up a term called unreasonable hospitality of a book that came out not too long ago of a restaurateur who built up one of the most successful properties because they went out of their way where the client didn't expect something favorable was coming their way. Unreasonable hospitality. So they come back for one more game. Well, if they come back for one more game, that seeds baseball.

Steve (01:00:07.03)
that achieves an objective for both properties, the Minnesota Twins and your organization. It generates more revenue, which you have to have to pay the bills and grow your property. And maybe that's just one last query. Does a group like yours ever intend to sell on the open market this type of organization? Is this a build that when we see big franchises and pro sport being acquired increasingly?

Reliance on private equity to come in and help out even though you're holding company as a private equity group Would we ever see an organ minor league teams being built for sales purposes?

Derek Sharrer (01:00:46.83)
It's a great question. I'm not sure I'm the right person to answer it. Diamond baseball holdings, you mentioned the financing partner in Silver Lake, the private equity firm that owns Diamond baseball holdings. Diamond baseball holdings then owns the franchises. There is a curtain there that we haven't.

Steve (01:01:01.72)
And by the way private equity organizations don't usually they're usually not lifers holding on to what they they usually have an obligate the last I checked and my company's not at a private equity acquisition stage yet, meaning we being acquired we're not there yet

Derek Sharrer (01:01:13.286)
that we don't always get an opportunity to look behind relative to the private equity.

you

Steve (01:01:30.722)
But at the end of the day, I will say, as we all know, they usually have a fund that people ceded them money to make investments, to make them a return on investment. I will tell you this, Stephen, in my experience, which is now two years, virtually two years with Diamond Baseball Holdings and by virtue of being part of Diamond Baseball Holdings, was still related.

Derek Sharrer (01:01:42.446)
I will tell you this, Steve, in my experience, is now two years, virtually two years with Diamond Baseball Holdings and by virtue of being part of Diamond Baseball Holdings with Silver Lake, my experiences and completely understanding what private equity historically does, we don't see that yet in Diamond Baseball Holdings. What we see is an organization that is investing

Steve (01:01:56.217)
My experiences and completely understanding what private equity historically does, we don't see that yet in diamond baseball holdings. What we see is an organization that is investing incredibly in improving the operations of the 42 ballparks, the 42 franchises they own, improving the fan experience, the investment they've been making from a...

Derek Sharrer (01:02:10.702)
incredibly in improving the operations of the 42 franchises they own, improving the fan experience. The investment they've been making from a capital expenditure perspective, from a ballpark improvement perspective, from a fan experience perspective is incredible. So the commitment

from Diamond Baseball Holdings and then of course Silver Lake as the private equity firm behind Diamond Baseball Holdings has been unbelievable to watch.

Steve (01:02:42.149)
Great. Listen, what a pleasure. mean, for me, this was, I would say, unique as a transaction report.

because it really was for me almost like a master class in trying, and there's a lot, lot more that I would love to unravel with you, but it really is understanding some of the ins and outs of what it is to run a professional organization of very accomplished baseball players who are in the entertainment business, who all of them, or at least I would say the vast, vast majority have the aspiration.

to be playing in Major League Baseball in one of the Major League teams. And they have outstanding talent. And by the way, the distinction of the players on your team compared to those who are playing in Major League, it's that hair breath of distinction very often that sometimes it's just a blessing from above and it's just fate. you can't say sometimes why one player above the other

made it into the Twins or another major league team. So with that said, Derrick Scherer, as I said, I started off by saying you've been in this for a long time since 1994 when you were at Fort Myers Miracle. And by the way, I didn't know that was actually an affiliate with the Minnesota Twins. So interestingly enough, at a Class A affiliate. And from 2004, I believe, you've given your existence

Derek Sharrer (01:04:06.53)
Yeah.

Steve (01:04:16.76)
to this team called the St. Paul Saints. And it's been a heck of a journey. And if there was like SBJ has the 40 under 40, if there was a 10 of 10 to watch in minor league of the trajectory of where you're going, obviously, in this very important league to Major League Baseball and to minor league for the 30 million fans that come through the turnstiles every year in minor league baseball, those 120 teams.

I'll just say what a pleasure it was to have this opportunity to speak with you today on the transaction report. Thank you, Steve. I really appreciate the kind words. Master class and a conversation with me typically don't go with the same sentence, but I definitely appreciate the kind words and I enjoyed my time with you. Thank you. Thank you very much, Derrick. We'll wait for Kristen. She's going to, you'll see it says loading and. I'm going to stop now.

Derek Sharrer (01:04:49.774)
Well, thank you, Steve. I really appreciate the kind words. Masterclass and a conversation with me typically don't go in the same sentence, but I definitely appreciate the kind words and I've enjoyed my time with you.

Steve (01:05:12.099)
So, thanks.