“This was the perfect storm,” Murphy said Thursday.
More recently, the team has offered season-ticket holders — many of whom are weathering their own cash-flow challenges —refunds on the cancelled 2020 season.
But the team is asking for patience on that front. Murphy said it’s the organization’s goal to refund ticket holders before the end of the year, and the team is securing financing to get through the months until the 2021 season.
“We are unable to provide you with an exact date at this time as to when your refund request will be processed,” a letter to season-ticket holders from the Dragons organization says.
“When it comes to refunds, we will get refunds paid, but we’re going to be fair to everybody, and do it at once,” Murphy added.
For months as the season’s spring start approached this year, the team continued to spend on staff, capital projects, maintenance, concessions equipment, supplies and more.
“We were proceeding with our normal course of business," Murphy said.
Most of the team’s annual revenue is generated during the season.
Then, in mid-March, DeWine prohibited gatherings of more than 10 people as concerns about the global pandemic escalated. The new baseball season was immediately imperiled.
“From a business standpoint, we were going to go 18 months without revenue,” Murphy said.
For a seasonal business, that is incredibly challenging, he said.
“Payments (refunds) are most difficult for us to execute given our current financial situation,” Eric Deutsch, the team’s executive vice president, said in an email to a ticket holder obtained by the Dayton Daily News.
“As you know our business cycle is nearly 100% seasonal, much like an amusement park in the summer or an accounting firm at tax season,” Deutsch’s email added. “The majority of our annual revenue is generated once the season begins, while the majority of our expenses for that season occur in the fourth quarter of the previous year and the first quarter of the current year, as we prepare for Opening Day.”
Early in August, the team notified season-ticket holders of three options for recovery, as one of those holders told the Dayton Daily News. The team told fans they could choose to apply half of their deposit to 2021 and the other half to the 2022 season.
Another option: move the deposit to 2021 as paid-up season tickets.
A third option was the refund request.
That is the most difficult option for the team, Murphy told the Dayton Daily News Thursday. But he also said he is encouraged by the response of fans so far.
The team at this point has more people committing to season tickets coming out of the pandemic than before, he said.
Fewer than 10 percent of season-ticket holders have asked for a refund, Murphy said.
And many of them are telling the Dragons this is a cash-flow need for them, but they want to renew subscriptions as they near the 2021 season.
“I think that’s a testament to how people have viewed the Dragons contribution to this community over the last 20 years,” Murphy said.
The new financing the team is completing now is key.
“That financing is going to be the mechanism that bridges the gap from September 2019 to April 2021,” Murphy said.
He declined to say how much in financing the team is securing. But it consists of support from Main Street Lending, a federally backed program, as well as an owner equity contribution.
“It will be effective for us to get to where we need to go in April 2021,” he said. “It will bridge the gap.”
He declined to comment on whether the Dragons have had to furlough employees.
The Dragons' history in Dayton goes back to 2000, when the team became affiliated with the Cincinnati Reds and started play in the Midwest League.
The team says it has had 1,385 straight sold-out games since April 2000, with 11.5 million fans watching games at what was Fifth Third Field in that time.
In January this year, the Dragons announced a new naming rights agreement with Day Air Credit Union, re-branding the downtown stadium as Day Air Ballpark.
“We have had conversations with the Dragons and they have remained a great partner throughout the COVID-19 situation, both organizations are looking forward to the first pitch being thrown at Day Air Ballpark,” Joe Eckley, a spokesman for Day Air Credit Union, said in an email Thursday. “We’re hopeful for a return to normal in 2021 and anticipate Day Air Ballpark will continue to be the center for family fun and entertainment in the community.”