Mailbag: Answering Questions About The Future Of Minor League Baseball
Image credit: (Photo by Barry Chin/Boston Globe via Getty Images)
Editor’s Note: The story has been updated with an additional question at the bottom of the post on Oct. 6.
At Baseball America, we’ve written a lot about the negotiations between Minor League Baseball and Major League Baseball and the fate of the minor leagues in 2021 and beyond. But we also understand that not every fan has followed every twist and turn. With that in mind, we’re answering fans’ questions about the negotiation and what it could mean for the minor leagues.
Do you see MiLB St. Pete employees taking roles with MLB in similar capacities they have now, and what happens to the 16 League Presidents and all the league staff? Will MLB be offering any of these people who’ve been caught in the crossfire unnecessarily any opportunities?
Happy Kykendahl
@theregoeshappy
When it comes to individual employees, there is simply no way to know. We’re talking about discussions and no final agreements. Those decisions would likely be made after any agreement is finalized.
But when looking at the big picture, if MLB’s proposal is adopted, MLB would be highly unlikely to have anything close to the same number of employees working on MiLB issue as have been working at MiLB St. Petersburg (MiLB’s staff directory lists 58 employees currently, although that number is quickly diminishing as staff have been told to look elsewhere for jobs). The same could be said about the individual league presidents and staffs.
In its proposal, MLB has laid out a way for MiLB teams to cut costs while also potentially boosting their own revenues. MLB can do that by providing the same services as MiLB and league offices were providing, but at a lower cost. That means transferring some of the responsibilities currently handled by MiLB and league employees to current MLB employees.
While there would be new hires as well, MLB would most likely consolidate the responsibilities each league office currently handles into a much smaller staff that can serve the same roles at a regional or classification level. There are a lot of jobs individual league offices do that are the same from league to league, and I’ve talked to multiple people involved in MiLB operations who say that such roles could likely be handled by a significantly smaller number of people.
As for the second part of your question …
Is MLB prepared to address the hundreds of jobs it’s eliminating by the takeover? Team jobs, League jobs, etc…
Directly? No.
Major League Baseball has made clear throughout these negotiations that it is a separate entity that has a contractual agreement with Minor League Baseball through the Professional Baseball Agreement (PBA). That agreement obligates MLB to provide players and coaches to MiLB teams at no cost to those clubs. The agreement obligates the MiLB teams to provide quality facilities and handle all the business aspects of running MiLB games that provide the venues for those MLB-paid players/coaches.
Those MiLB team employees are employed by individual MiLB teams. MLB has had zero input into how many people a team decides to hire and how much they decide to pay them. So when it comes to the staffing at the MiLB team level, league level or even MiLB’s offices in St. Petersburg, MLB has been clear that those decisions are not within its control. It could opt to hire some of those people to fill roles at MLB that will deal with the minors (if its proposal to take over governance of the minors is accepted).
MLB has said it will accept responsibility for ensuring cities that lose affiliated MiLB teams will have the opportunity to have baseball in another form for 2021 and beyond, but that has been the limit of its promises.
In past reporting, there was discussion of an Org player Limit. Is that still a possibility?
Yes. It is a definite possibility. There’s no final clarity on whether MLB teams will be permitted to have two complex teams in the U.S. or be limited to one, and they will still be able to have Dominican Summer League teams, but the limit of four full-season clubs will reduce the number of minor league players each team is allowed to have under contract.
The Yankees in the past couple of years have had nine minor league teams (one DSL team, two Gulf Coast League teams, an Appalachian League team, a New York-Penn League team and four full-season clubs). Even if they are allowed to have two teams at each of their Florida and Dominican complexes (which is not a certainty) they will still be forced to cut at least one team.
And if the DSL and GCL are limited to one team each per organization, they would go from nine MiLB teams to six.
From the minute a player signs a pro contract, he is assigned to a minor league team. Just like the MLB team, an organization is limited in how many players can be assigned to each MiLB team. So if there are fewer MiLB teams, each team will have fewer minor league players.
With MLB increasing roster size to 26 (28 during pandemic) will future MiLB roster size also be adjusted?
Nothing is finalized, but there has been talk that Double-A and Triple-A rosters could be expanded for 2021 and beyond. Triple-A regularly has a problem where teams run out of bullpen arms in part because teams are very careful about how many relievers on the 40-man they allow to pitch on any given day (because those pitchers are candidates to be called up to the majors at any moment).
I would love more info on the Baseball Cup proposal. How realistic is this?
No easy way to know, but as the story laid out, there are significant hurdles. Getting MLB players and MLB owners to agree to have players play a concurrent tournament (and risk injury) during the MLB season seems difficult.
Once the transition to the new operating environment takes place, how will this impact MLB valuations?
Joe Rizzo
@joemktg
For MLB, the effects will likely be very minimal. They likely could make some profits in the long run from the sharing of digital/national sales, but the big thing MLB gets is control to be able to resolve issues as they arise in the future.
That’s one of the big debates revolving around MLB’s proposal. I would describe many MiLB owners as being cautiously optimistic about the general concepts of MLB’s proposal, but their big concerns revolve around franchise valuations and the length of the licensing agreements. If MLB is going to have the ability to take away franchise licenses (at the expiration of the terms of the license), MiLB owners feel it is very important that they either have a system where the payoff amount is a realistic valuation for the franchise, or that the length of term is long enough to ensure that it will not be a significant factor in the value of the club.
MLB is right to point out that MiLB teams in the past have never had any assurances that the Professional Baseball Agreement would be renewed every time it came up for renewal over the past 30 years. But MiLB owners also rightfully point out that when it came to franchise values those PBA renewals were treated by all parties involved as virtually automatic. That has changed now, and MiLB owners want some structures in place to help try to super-glue back together that now shattered assumption.
It seems many minor league teams run a better fan-based business than MLB (e.g., #RichmondFlyingSquirrels) so why would MiLB want this?
Robert Thomas
@CommonSense891
If MLB assumes “total governance” does that mean the end of minor league teams being affiliated with major league teams? So the players are divvied up among the minor league teams without any regard for which big league team has the rights to the players?
This is probably the biggest point I can make here to clear up a somewhat common misunderstanding. I’m linking these two questions together because they are tied together in fans’ assumptions.
If you are a fan of a team that is among the 120 who remain in affiliated baseball for 2021 and beyond, very little will change in your experience between 2019 and 2021 (assuming we are on the other side of the coronavirus pandemic).
A significant number of affiliations may change, but that switch is much like what has gone on every two years in the past during the affiliation shuffle. For quite a while, the low Class A Greensboro Grasshoppers were a Marlins affiliate. In 2019 they switched to being a Pirates affiliate. The MLB team that was providing the players for Greensboro changed, but the local ownership of the Grasshoppers, the stadium experience and the front office did not change. Only the affiliation that changed.
Under MLB’s proposed system, the Grasshoppers could end up with a new MLB affiliate again (although this time on a longer term of agreement). All that means is a new MLB team will provide the players who play for the Grasshoppers. Again, like it was in affiliation shuffles of the past, the local ownership of the Grasshoppers, stadium experience and the front office will not change.
MLB governance means MLB replaces MiLB and league presidents as the ones responsible for running the many aspects of the minors that require organization above the team level. There is a lot involved in that including setting the schedules, umpire assignments, ensuring teams are adhering to travel and hotel requirements, filing the copyright and licensing legal forms to ensure all MiLB teams’ trademarks and logos are protected and many, many other details.
It would mean that MLB has a more direct stake in the financials of MiLB, since the two sides would be partners when it comes to splitting national revenues.
But on the individual MiLB team basis, this does not change anything significant for fans (if the team is among the 120 that remains affiliated). Most MiLB teams are not owned by MLB clubs. After this negotiation is resolved, in whatever way it is resolved, most MiLB teams will not be owned by MLB clubs.
And those individual MiLB clubs will continue to decide how they market in their community. They will set ticket prices, decide which promotions they want to do and how they can best serve their communities.
Nothing in any of these proposals changes that.
I’d like to know more about what it would mean for minor league players.
Much of this proposal has little to do with the players because this is a negotiation on a franchise agreement (or some other contractual mechanism) between MiLB teams and MLB. MiLB teams have very little control over MiLB players’ conditions because they are not the ones who employ and pay the players.
Even though MLB pushed MiLB strongly to have MiLB teams help get legislation passed that kept MLB teams from having to pay overtime for MiLB players, MiLB teams have zero control over how much MLB teams choose to pay MiLB players.
If you are a minor leaguer at any level, your paycheck comes from your MLB team. MiLB teams do provide the per diem money for minor leaguers at the start of road trips in some instances, but even in those cases, it’s simply something where the MiLB teams provides that money and is then reimbursed by the MLB club.
Having offered that lengthy caveat, here’s what it means for MiLB players:
- There will be less of them.
With fewer teams, there will be less opportunities in affiliated ball. A number of teams have already released a few more players than they would in a normal season, but next year’s spring training is shaping up to be a survival of the fittest, with players fighting for a significantly smaller number of roster spots.
- They will be paid more.
It’s not part of this negotiation, but MLB has announced previously that MiLB players will be receiving pay raises in 2021. Rookie ball salaries will go up to $400 a week during the season. Class A jumps to $500 a week—both of those levels received $290 a week in the past. Double-A goes to $600 from $350 and Triple-A increased from $502 a week to $700.
A few teams had already put those raises in place before the 2021 season and nothing prevents teams from paying above that rate. But those are the minimums.
- Their working conditions will improve.
Final facility standards have not been released, but everyone Baseball America talks to expects that there will be increased requirements. Many of those requirements focus around coach and player facilities. It’s likely that all-weather batting cages will be part of the requirements. There’s an expectation that larger locker rooms for coaches and trainers will be included to correspond with the increase in the size of MiLB traveling parties. There have been discussions about locker room and shower facilities for female coaches and staff, something that is not currently available in many MiLB stadiums.
There have also been rumors of increased lighting standards.
Travel requirements are also likely to be improved. The expectation is that there will be a requirement for sleeper buses for trips beyond a certain distance. Hotel requirements are also likely to be increased. In discussions with a number of MiLB players, coaches and officials who travel, the general sense is that most of the hotels teams stay at are fine, but there are definitely cities where the hotels are less than desirable.
Will MLB start deciding who the announcers will be with affiliates? Or will Manfred’s creeping shadow allow people with no MLB ties to make those selections?
No. As mentioned above, the remaining MiLB teams will be run like they have been in any other MiLB season. The MiLB team hires its front office staff, radio and tv announcers and will operate like always. This negotiation is about whether MLB will be in charge of all the items that MiLB’s St. Petersburg offices and league presidents do now, and whether MLB will be in charge of selling digital rights, advertising and other items like that for MiLB teams.
But when it comes to selecting who does radio in Charleston, San Jose or Amarillo, that will remain a local MiLB team decision.
Will teams that don’t necessarily want to change affiliates be forced to accommodate other teams? Example: Twins are happy with Pensacola but Marlins/Rays make more sense.
Will there be a shuffle of affiliates currently assigned to teams? The White Sox have affiliates in key Southern markets (Charlotte, Birmingham), will they continue to have those affiliates or be assigned new ones?
Two questions, one answer.
This is a tricky one. The expectation is that MLB teams will not get 100 percent of their wish lists. But MLB officials in New York did contact all 30 MLB clubs to hear their thoughts and wish lists for their MLB affiliates.
MLB’s desire is to have more geographical continuity for leagues—which equals less travel—and for MLB organizations, which means less travel for rovers, scouts, front office officials and players.
But how far do you go to improve the geographical proximity of an MLB team’s affiliates? There are West Coast teams who are quite happy with their Midwest League affiliates, so should MLB force them to move out West to the Northwest League? It’s a good question without any clear answers.
Most likely the announced list of 120 teams and the reworking of leagues will not be unveiled until very late in this process.
The few teams that were “saved” from reduction of 40 short season teams how do they go about obtaining a team for their stadiums if no league is near their facility? Did MLB pay money to teams that will not play Short Season? MLB should have a do over for those 40 teams next season?
For teams in the leagues lost, like rookie leagues, could you see more summer collegiate leagues move in? Could you see the Coastal Plains league moving into where the Appalachian league was like Burlington?
Yes. I would be shocked if we don’t see summer collegiate leagues playing in many of these cities in 2021 and beyond.
Updated Answer (Oct. 6, 2020): The Appalachian League has now announced that all 10 teams from the league will be playing as a summer wood bat league in conjunction with USA Baseball in 2021 and beyond.
In the case of the Appalachian League, I would expect that most of them will end up in a new, MLB-run summer wood-bat league. While MLB has moved away from its “dream league” proposals, it has been clear about its desires to have more summer wood-bat leagues. The pushing back of the draft to July only increases the utility of summer wood-bat leagues for scouting purposes, as it will likely add a number of draft-eligible juniors who have foregone playing in the past because they were drafted and signed in June.
Those summer wood-bat leagues are not allowed to pay players, who must remain unpaid to keep their NCAA eligibility. As such, they are an excellent fit for MLB and MiLB owners in cities where paying indy ball players salaries seems impossible.
I would also expect that there will be teams left out of the 120 that end up in existing summer wood bat leagues as well.
To address Dan Carubia’s question, in the cases of teams who do not fit geographically into an existing league, those are likely to be places where MLB tries to set up its own summer wood bat leagues—I would expect to see MLB propose a wood-bat league for the Pioneer League cities as well as the Appalachian League, for example.
In other cases, cities will be encouraged to join existing independent leagues.
MLB has promised to provide opportunities in cities that lose affiliated minor league baseball. From everything I am hearing, those opportunities will likely end up being summer wood bat leagues or professional independent leagues. With the demise of the dream league idea, I’ve not heard of any other likely options.
Could you explain in a economic terms how the existing minor league teams have been devalued ? I would assume that it centers around the fragility of PDCs. MLB has proven that anything team can lose their affiliation at a moment’s notice.
Yes, that’s the largest reason for franchise devaluation. Technically no team was guaranteed a player development contract for longer than the life of the current Professional Baseball Agreement at any point over the past 30 years, but that is not the way the system has operated. Until MLB signaled its desire to completely rework the system, many within the system (and prospective buyers of teams) treated PBA renewals as a fait accompli.
Before 1990, only Double-A and Triple-A teams were guaranteed of a player development contract. Teams in Class A could have a PDC for one or two years, only to see that MLB club opt to go in another direction the next year with no guarantee that another MLB team would affiliate with them. When that happened, the MiLB team could either continue in the league as an independent team (with the owner paying non-affiliated players) or it could decide to shut down. Because of this, Class A franchise valuations were significantly lower than Double-A and Triple-A teams.
The agreement before the 1991 season changed that. Class A teams were guaranteed of having an MLB affiliate every year. The exact MLB team could change every two years with the affiliation shuffle, but Class A MiLB teams were guaranteed to continue to receive an MLB affiliate every year for the length of the MLB-MiLB Professional Baseball Agreement.
That immediately gave Class A MiLB teams a significant boost in franchise valuations thanks to the security of a guaranteed MLB affiliate. Technically, those affiliations were only guaranteed through the life of the current Professional Baseball Agreement, but after the PBA was renewed with no issues and then again and yet again, most everyone involved seemed to no longer factor in the possibility that those PDCs could go away in a future MLB-MiLB agreement.
In the deal books put together in preparation for the sale of a minor league team, the risks for the purchaser have to be spelled out. For years, those risks may have briefly mentioned the expiration date of the MLB-MiLB agreement, but there generally was nothing that spelled out the true risk that the number of PDCs MLB offered to MiLB teams could be reduced in a future MLB-MiLB deal.
With everyone treating PDCs as permanent, the risk of losing an MLB affiliation wasn’t factored into the calculations of what teams were worth, while the scarcity of teams with MLB affiliations was factored into the sales prices. Prices have steadily appreciated, not because the balance sheet of MiLB teams have grown dramatically, but because there always seemed to be a steady supply of interested purchasers while there was always a limited supply of available teams to purchase.
Now that MLB has demonstrated that PDCs are quite clearly not permanent, the sales market for MiLB teams will undoubtedly be affected.
Right now, the market is effectively frozen, as no sales are likely to happen until the full parameters of a new deal are understood. But even once there is a system for 2021 and beyond, the details of that deal will have a significant impact on MiLB team values for years to come. The system treated the PDCs as permanent before, even if they maybe shouldn’t have been. MiLB owners are looking for a system going forward that provides some form of permanence (or at least very long-term security) for the licenses that MLB is offering in the new system.
MLB’s proposal seems to recognize that, as there are provisions that would pay compensation for MiLB teams that remain in compliance with MLB’s franchise standards but lose their team at the expiration of their player development license. But the details of the formula that would be used to compensate MiLB owners, and exactly what that compensation would mean (does it pay for just the PDL, or does it mean MLB can take over the team/market?) remain to be worked out. Similarly, MLB could preserve the ability to reduce from 120 to a smaller number of teams in the future, but it would likely come with a system to compensate MiLB owners left out in such a reduction. Spelling out the details would be key in such a deal.
MiLB owners argue that figuring out a way to ensure franchises regain their previous values and have room for future appreciation is in both their and MLB’s best interests. As they lay it out, such a system ensures that MiLB continues to attract well-funded, top-notch operators. And steady franchise appreciation provides incentives for MiLB owners to continue to spend to upgrade their facilities to remain within MLB’s proposed system.
Have a question that isn’t answered here? Ask JJ Cooper on Twitter @jjcoop36.
Comments are closed.