Let’s Talk About the Minor Leagues

Unbeknownst to the rest of us, Jeff Luhnow evidently assumed the helm of the Houston Astros franchise with a mandate to emulate a mustache-twirling villain as faithfully as possible. His latest gem, the so-called “Houston Plan” to overhaul the minor leagues, would eliminate over a quarter of all minor league baseball franchises— including entire leagues. Rob Manfred has been an eager proponent of the plan, even threatening to end MLB’s affiliation with the minor leagues entirely if they don’t accede to it. Essentially, MLB is telling Minor League Baseball to either accept the loss of 42 teams, or cease to exist.

Let’s start with an important predicate: minor league baseball teams are not owned by MLB or MLB teams. Major League Baseball teams, contrary to popular belief, do not own, or manage the operations of, their affiliates. Instead, it’s a complex relationship governed by a series of contracts:

The arrangement that binds the two entities is called the Professional Baseball Agreement (PBA), which, most crucially, provides industry stability with its assurance that Major League Baseball will field at least 160 Minor League teams. This guarantee is formalized through Player Development Contracts (PDCs), the two or four-year agreements that bind Major League teams and Minor League affiliates.

The current PBA expires in 2020, which is why MLB and MiLB negotiators are currently working on a new agreement, and that’s the context of this new proposal, as explained by Tim Brown for Yahoo,

MLB and the National Association of Professional Baseball Leagues are negotiating a contract that would replace the current agreement, which expires after the 2020 season. As part of that negotiation, MLB submitted a proposal that would pare the number of affiliated minor-league teams by 42, most of those in Class A or below. The remaining teams would be realigned, primarily by geography.

In response, Pat O’Conner, president and CEO of Minor League Baseball, the communities of the teams that could lose their affiliations, and various politicians — including presidential candidate Bernie Sanders — have vowed a fight to maintain the status quo. A slew of lawsuits from eliminated teams and their fans have been predicted. Sanders appeared to threaten the standing of baseball’s antitrust exemption. In a recent address that opened the minor-league version of baseball’s winter meetings, O’Conner said, “Big storm clouds loom on the horizon.”

The Minor Leagues last faced a major contraction in the early 1950s. Then, however, minor league baseball was facing a significant reduction in attendance, from over 41 million fans in 1949 to less than 26 million fans by the middle of the decade. Back then, the rapid decline in attendance, perhaps spurred by broadening radio broadcast rights, financially justified the cuts. Now, however, there is no such decline. Instead, the minor leagues have never been so popular.

A total of 41,504,077 fans passed through the gates at Minor League Baseball games in 2019, marking the 15th consecutive season that Minor League Baseball’s 176 teams in 15 leagues drew more than 40 million fans.

The increase of 1,053,740 fans over the 2018 attendance total was a 2.6 percent increase and marked Minor League Baseball’s largest year-over-year increase since the 2006-2007 seasons and marks the ninth-largest single season total in Minor League Baseball history. Average attendance across Minor League Baseball (4,044) was up 84 fans per game (2.1 percent) over 2018.

The Triple-A Las Vegas Aviators led all teams in total attendance (650,934) and average attendance (9,299), while becoming the first team since 2015 to top the 650,000 mark in total attendance. The Aviators recorded 47 sellouts in their inaugural season in Las Vegas Ballpark. The Frisco RoughRiders (455,765) led the Double-A level for the 15th consecutive season, the Dayton Dragons (545,108) led the Class-A level and the Vancouver Canadians (235,980) topped the Short Season and Rookie level leagues.

Eight leagues saw total attendance increases in 2019: Appalachian (5.5 percent), Carolina (6.2 percent), Mexican (22.4 percent), Northwest (2.4 percent), Pacific Coast (1.2 percent), Pioneer (18.8 percent), South Atlantic (2.5 percent) and Texas League (4.3 percent).

So what gives? Major League Baseball has proffered four primary arguments to justify the proposal, ranging from substandard facilities to overlong travel times. But the argument made the most by MLB is that analytics have progressed to the point where we can safely identify players who will never make the major leagues without the use of the minors to weed out those players. This isn’t brand new— back in September, the Astros floated the idea to Travis Sawchik that the minor leagues themselves were essentially superfluous. As such, MLB says there are too many minor leaguers, and no use for them.

The problem with that argument is that it’s wrong, and there’s no need to invoke Mike Piazza or Albert Pujols in order to prove it. Mookie Betts was a fifth-round draft pick. Tommy Pham was drafted in the sixteenth round. Brad Peacock was drafted in the 41st round. Kevin Kiermaier was drafted in the 31st round.

Simply put, even in the age of analytics, teams haven’t shown a sustained ability to discern MLB talent based solely off of scouting reports and a draft board. In the 2014 MLB draft, John Means, Kevin Cron, Ramon Laureano, and Trevor Hildenberger were all drafted after the tenth round. Astros wunderkind Josh James was drafted in the 34th round of that draft. Even more recently, Indians Pitcher Zach Plesac was a twelfth-round pick in 2016. As it turns out, unheralded players can still make the long climb to the major leagues.

So why does MLB really want to cut minor league teams? Cost savings, as Kevin Reichard writes for Ballpark Digest.

This is more an internal MLB debate than anything to do with Minor League Baseball, with the Astros and several other MLB teams (Milwaukee, Baltimore, Colorado) saying that bigger-budget teams have an advantage by signing more minor leaguers to contracts. Their solution is to limit the number of MiLB players under contract to 150, down from the 200-plus contracts controlled by the likes of the Yankees, which would lead to cost savings.

Let’s crunch the numbers. Most of what MLB pays in MiLB salaries comes in the form of signing bonuses and Triple-A players, and these numbers would not change. Take away these numbers, and MLB teams spend $40 million or so in player salaries. Limit the number of players and the industry saves $20 million annually—not a huge number when you consider MLB is a $11-billion industry. But this is not a net cost: despite what many assume, MiLB teams do pay MLB for the use of players in the form of a 7.5% ticket tax, some $18 million annually.

In other words, MLB is threatening to cut 40 minor league teams in order to save $20 million, even though the league makes 90% of that figure back in the form of payments made by minor league teams. And whilst it’s true that the Yankees do have more minor leaguers than anyone else— as many as 340 in 2018— there’s no reason why every team couldn’t match the feat. After all, the total annual pay for all minor leaguers for all teams across all levels is less than ten million dollars. That’s right— all minor leaguers earn, combined, about half of what Mike Moustakas will earn in 2020.

That said, this isn’t the first time that MLB has tried to use minor leaguers as a cost-saving measure, as demonstrated last year with the noxiously and inaccurately named “Save America’s Pastime Act,” a bill which didn’t save anything other than MLB team owners a few million dollars. That’s right— paying minor leaguers minimum wage would cost MLB teams a grand total of $5.5 million annually, and yet the league paid a veritable army of lobbyists to not just push federal legislation exempting minor leaguers from the minimum wage, but state laws as well. As such, given MLB’s efforts to save $5 million per year on minor league salaries, the idea that they’d threaten the minor leagues with annihilation unless they could save another $20 million per year doesn’t seem that far fetched.

Simply put, MLB wants to turn the minor leagues from a development system into a revenue generator, increasing fees paid by MiLB teams for the use of prospects and decreasing the number of minor leaguers to save money. That the players in question are making literal starvation wages is evidently of no moment to the league, which sees the minors as a potential new revenue stream. At the same time, although Minor League Baseball is, not incorrectly, finally pointing out the flaws in MLB’s plan to monetize the minor leagues, the fact remains that MiLB was for far too long a willing participant in MLB’s plans so long as it was the players, not MiLB owners, on the short end of the stick. Minor League Baseball has, for years, partnered with MLB to depress minor league wages.

With that in mind, the time has come for minor leaguers to unionize. This idea isn’t new— Nathaniel Grow wrote about it last March.

Minor-league players have always had the ability to better their conditions themselves, should they decide to do so. Indeed, if minor-league pay and working conditions were ever going to be substantially improved, it wasn’t going to come from the current litigation — which only seeks to force MLB to pay players the bare minimum required under federal law — but instead would come from minor-league players finally taking matters into their own hands by forming their own union.

A minor-league players union would have considerable new leverage over MLB. The existing minor-league wage scale would be subject to collective bargaining, for instance — as would MLB’s refusal to pay players for spring training, instructional leagues, or offseason work. Unionized minor leaguers would also be able to force MLB to negotiate regarding the quality of medical care and food provided to prospects, and could challenge the league’s existing penalty structure for the use of performance-enhancing and recreational drug use.

A few months later, Marc Normandin wrote that the largest obstacle facing the formation of a minor league union was the players’ understandable fear of reprisal.

“Fear is the predominant issue for players,” [attorney and former MiLB player] Garrett Broshuis recently told SB Nation. “When I was talking to players [about organizing], it’s not that they didn’t recognize the benefits of a union, but they were scared. They looked at me as if I might as well have been asking them to jump off of a cliff with me. They are so fearful of those owners, and what they might think about it, and how the owners might judge that decision to act collectively.”

Writer Michael Arria noted this fear also back in 2017.

The most obvious — if daunting — solution to unjust treatment is to form a minor league players’ union. Yet a union drive would quickly run up against staunchly anti-union front offices. A whiff of organizing would be enough to endanger players’ future prospects. Curt Flood’s crusade cost him his career — what incentive does a kid playing low-A ball have to challenge the system?

Now, let’s be clear: it’s absolutely illegal for an employer to take adverse action against someone for joining or starting a labor union. In theory, MLB can’t refuse to call up a player because they organized the minor leagues. But MLB isn’t stupid, and that’s a key reason why the league insists on referring to minor leaguers as seasonal apprentices. MLB’s argument is that minor leaguers can’t unionize because they’re not employees. Legally, that’s probably bunk. But for minor leaguers, especially players from Latin America, who aren’t familiar with American labor law, MLB’s bluster sounds threatening in the extreme. Plus, it’s not as if the league doesn’t already have a reputation for blackballing players.

If the MLB Players’ Association were to step in, that would change. The MLBPA could expand to include minor leaguers tomorrow, and in so doing protect their futures. However, the MLBPA views minor leaguers as threats to their current members, because the job of a veteran today will be the job of a prospect tomorrow. It is, to be kind, a shortsighted view; nearly every other labor union in the United States which offers apprenticeships has been able to balance the needs of its members with those of the workers of the future.

That said, there is a potential alternative. Arria noted that in 2008, a lawyer named Donald Wollett, who’d worked as both a baseball salary arbitrator and advisor to Scott Boras, wrote a book called Getting on Base. In it, he suggested that another union, perhaps the Service Employees International Union, organize the minor leagues. It’s an intriguing idea; the SEIU covers workers across multiple sectors, ranging from hospitality to health care and airports to libraries. The SEIU, as a pre-existing, powerful union with a well-regarded lead counsel, would be uniquely positioned to challenge MLB on minor league contraction and compensation, and would not be intimidated by the league’s pushback against organizing minor leaguers.

Still, it would have to happen soon. As the idea of contracting the minor leagues gets bandied about at the negotiating table between MLB and MiLB, we need to remember that the players— the ones most impacted by these decisions— have no voice at the table at all. The best way to change that is also the best way to save the minor leagues, and that is to create a vehicle for minor leaguers to collectively bargain, just as major leaguers do.