Thank you for your patience and consideration over the last two months as the League worked to determine our course of action regarding Little League baseball this spring. From a personal perspective, this decision has been weighing on me for the last six weeks as I balance what’s best for our players, our families, our community, and the league itself. It is with a heavy heart that I am announcing LSLL is officially canceling our spring 2020 season at this time. Please let your children know that I am as heartbroken as they are at the loss of our season. I enjoy seeing their smiling faces on the field each spring and that is something I truly miss right now.
I am especially saddened for our League Age 12 players who have missed out on their final year on the “small field”. I know many of these players personally as my youngest is in this age group. We’re hoping to celebrate you and give you one last “trip around the bases” at some point in the future.
While we have been holding out hope these past weeks for a return to baseball, we have also been planning for this possibility of cancellation since we began this battle against COVID-19. This message contains a lot of information and data to provide some insight and transparency into our decision making. I apologize for the length but please take the time to read it in its entirety as I’m hoping to answer many questions you might have.
As I’ve stated since mid-March, the league was collecting and evaluating data to help us make the most informed decision possible. In addition to the health and safety of our players we also had logistical concerns to consider such as field access, scheduling of events, and the availability of players and volunteers. We had 2/3 of our population respond to our recent survey so thank you to all who took the time to provide your input - it was invaluable! That data revealed that while the vast majority of our league was willing to move forward with a season (55% responded yes; 33% responded maybe) there were also vast differences in “how” to move forward safely. We also continue to have a large unknown regarding access to fields. Based on our conversations with various officials we believe the county would need to be in a Phase 2 status before field access would begin. We believe the earliest this could occur would be mid-June but the events of the past weeks have slowly and steadily eroded our confidence in hitting that date. This is important as the Board felt mid-June was our “drop dead” for getting started as we wanted 10-14 days of practice before playing games. We also strongly felt that a delayed season should not extend into August - so not being able to start in mid-June became a major logistical hurdle. It was this combination of data that led the Board to vote for canceling the spring season at our meeting last evening.
I’d now like to turn our attention to the league finances for a minute. Some of this information has been communicated previously so I apologize for the repeat, but I felt it was important to have all of the data in one place. LSLL is a non-profit organization focused on enriching our children and bringing our community together. We operate each of our seasons “independently” with our registration fees and sponsorships covering the costs incurred for that particular season. We do not carry large cash balances between our seasons nor do we incur any negative cash balances using credit lines. Looking at this spring season specifically, the league has incurred a number of sunk costs including player uniforms, equipment, Little League dues, insurance, and facility rentals for player evaluations. These are normal and routine costs we incur every year in preparation for a successful season and costs which hit our financials and consumed our cash in advance of COVID-19’s impact on our lives.
As President, I have a fiduciary responsibility to the league and our community to ensure we operate within our limits. I personally feel responsible to ensure the decisions we make today don’t result in the closure of our league in the future. To that end, the league halted all discretionary spending in mid-March and we have been conserving our cash balance since then. We have been performing extensive financial modeling to understand what might happen if we reached this point of canceling our season. Based on those models we determined that a 50% partial refund is possible for each paid registration this year. Let me explain how we arrived at that decision.
Attached to this message are two documents showing the data we used. The “Cash Flow Projection” file details the league’s current and future cash balances. The “Spend per Player” file details the sunk costs we’ve referenced above. The cash flow file contains four columns:
Our 2020 income and expenses from January 1, 2020, through May 12, 2020
Our expected income and expenses through the end of August
Our expected income and expenses for a Fall 2020 season
Our full 2020 yearly income and expenses (columns 1,2,3 added together)
In mid-March, when we entered our delay status, we had 980 players who had paid registration fees to the league. This does not include any player on a waiting list nor any player in the Middle School division as we have not received any funds from those players.
At the end of August we expect our cash balance to be $22,199 (the bottom row in column 2). The expenses the league will incur between today and the end of August are related to our field maintenance contract for the Lions complex. This contract runs through the end of the year and that expense of $27,972 is reflected in the first row of column 2. In August we’ll be deciding if our fall season is capable of operating based on field closures or other COVID-19 related issues. If we’re able to host our fall season then the income & expenses shown in column 3 become a reality and the league ends the year with a final cash balance of $10,596. If the fall season is cancelled the league will incur $20,369 in expenses related to the final months of our field maintenance contract. This would reduce our final yearly cash balance to approximately $1,830.
As these last two months have shown, we have to plan for the worst-case scenario which would be the cancellation of our fall season as well. Based on the projected final cash balance of $1,830 the Board voted for 50% refunds for all paid registrations as the maximum we could provide and still remain financially solvent. This refund expense of $110,250 is reflected in row 4 of the cash summary table.
The question that naturally comes up is “where did the other 50% of the registration fee go?” The “Spend per Player” file helps to answer that question based on a paid registration fee of $225. Besides our ongoing field maintenance contract all other fees were incurred prior to mid-March and the halt of our discretionary spending to conserve cash. The main expense categories and costs per player include:
Uniforms ($55.38) for players, managers, and coaches
Player Equipment ($25.49) which includes catcher's gear, equipment bags, tees, baseballs, etc.
Field Maintenance (16.94) which includes expected costs through August 2020
Field Improvements ($8.67) which includes budgeted and approved field improvements completed in February this year
Other ($6.02) which includes LL charter fees, insurance, county fees, background checks, facility rentals, etc.
As you can see, our largest per-player expense is uniforms and those were disbursed to managers prior to our delay in mid-March. In most cases they have not been further handed out to players. The league does not plan on collecting those uniforms for future use and we expect all players to receive those when it is safe to do so.
The last topic I’d like to cover is the logistics of the player refunds. These will be credited back to the card information we have on file from the original registration. Once processed it normally takes 3-4 days to appear back in your account. We will begin this process on June 1st and it will take us a bit to get through all of the refunds for our 980 players - we appreciate your patience as we work through that process.
I have had a few families express interest in having their registration fees stay with the league instead of receiving a refund. These “vested” funds would be used to offset future costs, make capital improvements, and keep future registration fees low. We are certainly not tax experts and nothing in this message should be used as tax advice, but we’ve been informed by our accountant that these vested funds do not qualify as a tax deduction for families.
We’ve created a survey where families can expressly request their player refund or request their fees to vest with the league. The survey will close at 11:59 pm ET on Friday, May 29, 2020. Any responses not received by that time will default to a refund being issued for their paid registration. You can access that survey here - https://www.surveymonkey.com/r/L5CCSNM
I’ve also had a few families ask about using their refund amount as a credit for a future season with LSLL. To answer that question I’ll return to the “Cash Flow Projection” document and my earlier statement about operating each season independently from each other. Row 1 in column 3 shows our expected cash flow in the fall as negative $11,603. This is the result of our fall operating expenses exceeding our fall registration fees collected. Remember that we’re talking about cash in the bank right now and not our annual budget. Our league budget balances to zero for the fall as we utilize sponsorship money received earlier in the year to cover fall operating expenses. Putting financial terminology aside for a minute, the issue with using registration credits in the fall is that our incoming cash is reduced while our expenses for the fall remain constant. This means that the negative number in row 1 / column 3 gets larger while our positive cash balance in row 5 / column 3 continues to shrink. The league would quickly run out of operating cash and we would lose our ability to continue daily operations. Unfortunately, all of this means that we are not able to support a “credit” option for families.
I will close with this - my door remains open for conversations, questions, and communications with this community. I have received very gracious and encouraging messages from many families thanking the Board for our communications, our efforts, and for being unpaid volunteers. Thank you very much for the kind words! I would like to reiterate my sincere appreciation for your patience as we evaluated the best options for our players and our league these last two months.