With Reno 1868 ceasing operations, Edelstein discusses Aces’ future
March 12, 2020, is a date that rocked the sports world. By the end of it, Americans would see March Madness canceled and all four major leagues put on indefinite hold, set in motion by the NBA suspending its season the night before.
Games with thousands of cheering fans were now seen as potential superspreader events for the novel coronavirus. In a blink, the sports world was sidelined by COVID-19.
It was around this time when Eric Edelstein, president of the Reno Aces and Reno 1868 FC, knew there was no playbook for what the business of sports was going to face this year.
“It was March 16 or 17, we sent everyone home,” Edelstein told the NNBW in a recent interview. “And at that point we just thought, all right, 2020 is really screwed. We’re just going to have to gut through 2020.”
Nearly eight months later, on Nov. 6 — less than three weeks after losing in the USL conference semifinals to Phoenix Rising FC via penalty kicks — Reno 1868 FC announced it was ceasing operations after four seasons.
It was decision, ultimately made by owner Herb Simon (who also owns the NBA’s Indiana Pacers and WNBA’s Indiana Fever), that Edelstein could only describe as “gut-wrenching.”
“We’d been really looking hard at the business and the long-term impact of COVID and what the other side looked like,” Edelstein said. “We did a lot of very, very difficult evaluation over a very, very short amount of time and just concluded that this was the right thing for the company at large.”
Reno 1868 FC played its shortened 2020 season inside a mostly empty Greater Nevada Field due to social distancing measures. Meanwhile, fans of the Reno Aces didn’t see a single pitch this season, as the baseball club canceled its 2020 season entirely due to COVID.
As a result, the company lost “somewhere between $7-$8 million” in ticket revenue alone, Edelstein said, and “millions more” from lost in-venue sales, sponsorships and media income.
As the year comes to a close, the long-term consequences that COVID will have on the sports industry are still coming into focus. With that in mind, the NNBW spoke with Edelstein about the pandemic’s impact on professional sports and minor league franchises and what Reno 1868 FC’s folding means for the future of the Reno Aces.
Q: Why has COVID had an especially negative business impact on minor league teams in mid-size markets like Reno?
Edelstein: We are live-action dinner theater — that’s the role we play. The entire business model is built around live people coming together at the stadium. And when that’s the one thing you specifically can’t do, the success on the field … it matters because that’s why you play sports. But, it doesn’t bring the positive impact to the business when people can’t come.
Specifically, for baseball and soccer, our spring and summer seasons, from the moment one season ends, the income stops. And you begin investing, and all of that money that you’re spending is for the next season. For the timing of COVID, particularly for our industry, we were at the tail end of that spend period when we would start to generate income. And it all stopped. And for us, it never returned. Even though we played a soccer season, we’d have a total of 950 spectators between two games. That’s clearly a drop in the bucket. And baseball didn’t play at all. So we are now, at the earliest, another six months away from getting another drop of revenue.
I think it was probably August that it hit us that this is going to be a multi-year rebuild that’s going to take a lot of work. We’ve got a road ahead of us, but I think it’s going to be a multi-year rebuild.
Q: How did the pandemic impact the team’s sponsorships and relationships with those sponsors?
Edelstein: I think we were able to retain somewhere in the 15% to 20% of our soccer sponsorships just based on television. So, we were able to carve out just a small piece that we were able to retain for those who had field signage and some exposure on the broadcast. But still, the vast majority of it is built upon in-stadium attendance, so it wasn’t able to be realized.
We’ve worked very hard with our sponsors, many of which paid ahead of the season to create credits and rollovers to give them credit for the future. We do plan to be here for a long time as a business, so I think we’ve done right by all of our sponsors for the long term.
Q: On that note, what does Reno 1868 FC’s shutdown mean for the future of the Reno Aces?
Edelstein: Even though they are owned by the same person, they need to be completely separated. The history, longevity and value of the (Aces) franchise, the lease partnership we have with the city of Reno — Greater Nevada Field was built for the Aces. So, the long-term future of the Aces is very secure.
And, if anything, with the unfortunate decision (to fold Reno 1868 FC), we double down on the core business, which is why the stadium is here in the first place. No one should be concerned about the Aces’ future; we have a long-term future ahead of us.
Q: What do you think needs to change for the financial outlook of the business to get back to where it needs to be?
Edelstein: A lot of businesses have been affected by the pandemic. The reality is that we need the health and safety of our community to be well. Whether that’s the vaccine, whether that’s therapeutics, we need to get to a point where this disease that we’re living with doesn’t threaten lives, and only at that point can our business even begin to sort of come out of it. And I think at that point, it will return fiercely, because I think we’re all missing those simple pleasures that were taken away from us this year. But, the bottom line is the health and safety of the community. When it’s right, we’ll be right.
Q: What are the main things you’re focusing on between now and the Aces’ next season?
Edelstein: A few things. One is continuing to stay relevant and communicate with our fans, keeping in touch with our with our fan base, continuing to build our distribution, and make sure that we’re updating people. And celebrate the accomplishments of our players. (Cincinnati Reds pitcher) Trevor Bauer, Aces alum, just won the NL Cy Young (Award).
And we’re looking at making sure that our digital footprint is correct, that it’s easy for fans to buy tickets, it’s easy for fans to get information about us. So, we’re really evaluating all throughout the business, are we the most efficient we can be?
And so, sort of getting our house in order is the main objective, while also communicating with our community leaders, our sponsors, our season ticket holders, to make sure that we know that they’re there. We still love them and we can’t wait to bring them back as soon as we safely can.
Editor’s Note: This interview has been edited lightly for length and clarity.