MLB proposes eliminating 42 affiliated minor league teams

In separate articles published today in Baseball America and the New York Times, Major League Baseball is proposing a radical restructuring of the minor leagues that would limit major league teams to five minor league affiliates and eliminate 42 affiliated minor league teams. The various minor leagues would also be radically restructured and the Major League draft would be moved back to August. Pay for minor league players would also increase, but Minor League affiliates would be expected to cover some of the costs.

The business of Minor League Baseball is opaque and many fans don’t understand how it works. The important thing to remember here is that Major League Baseball and Minor League Baseball are separately-owned and operated organizations. Every seven years, they negotiate a Professional Baseball Agreement that governs the relationship between the two groups. This has been going on since 1903 and in recent years, the PBA negotiations have been fairly uncontentious with MLB making only modest demands.

But in the current negotiations, MLB is actually asking for a major restructuring. MLB has several major complaints. The first is the “affiliation shuffle” that takes place every four year that leaves MLB team scrambling for minor league affiliates. MLB wants longer Player Development Contracts (PDC) that would lock teams with their parent club longer than the current system, which allows for only two- and four-year PDC agreements.

MLB also wants to restructure the minor leagues so that their affiliates are more “geographically convenient.” What this means is that a team like the Washington Nationals doesn’t want their Triple-A affiliate in Fresno, CA, as it currently is. This seems like a no-brainer, except that the locations of the Triple-A teams do not neatly line up with the locations of major league teams. So MLB proposes that some teams get moved from Triple-A down to Class A and vice-versa. This potentially would have a major impact on the financial values of these teams.

The other, even more radical proposal would limit MLB teams to five minor league affiliates: one Triple-A team, one Double-A team, one in High-A, one in Class-A and one rookie league team that plays in the team’s Spring Training facility. This means the elimination of Short-Season A and Rookie Advanced leagues. Teams would also be limited to 150 minor league players under contract at one time. Most teams currently have closer to 200 to 250 players under contract in the minor leagues. (The Dominican League and international signings would not count against this, according to reports.)

To do this, 42 minor league teams would have to be eliminated. To allow those eliminated cities to still have summer baseball, MLB proposes two things. One is that some teams would convert to amateur summer league wooden-bat leagues like the Cape Cod League. The other is the creation of a “Dream League” that would operate something like a quasi-independent league that would be jointly owned by Major and Minor League Baseball. “Dream League” teams could sign any undrafted player and MLB teams would be be allowed to purchase the contract of any of those players for $5000. It’s unclear who would pay the (minimal) wages of the “Dream League” players, but it sounds like MLB would expect the teams themselves to pay the players, much like any other independent league.

MLB also wants to move the draft back to August and limit it 20 or 25 rounds. Newly-drafted players would not play in the minor leagues in the year that they were drafted. In their next year, former college players would report to Class-A (colloquially known as Low-A) and high school signees would go to rookie ball along with international signings promoted from the Dominican League.

Finally, MLB wants minor league teams to upgrade their facilities and teams that don’t upgrade would be left out of the new organization. This is less controversial as it is a demand in every PBA negotiations and even Minor League Baseball agrees that some teams need to upgrade. But Minor League Baseball worries that they don’t have the money to pay for such upgrade and the cities that own the ballparks are unwilling to chip in additional money for improvements. For this, MLB proposes that MiLB introduce a revenue-sharing system where the richer teams pay a tax to help subsidize the weaker teams, similar to MLB’s revenue-sharing programs. This is clearly a divisive proposal among Minor League owners.

Major League Baseball also agrees that it is finally time to increase the pay of minor league players. They would pay for those salary increases with these changes.

There’s a lot to unpack here. First, it should be noted that this is the opening proposal in a negotiations and not anything close to an agreed-to deal. If MLB wants to make major changes in their relationship with Minor League Baseball, it makes sense for them to start with the most radical proposal they have and then negotiate it back down to something fairer to both sides.

Obviously, the increase in pay for minor league players is a positive development. And it does seem that 40 rounds for the draft is too many and that currently there are many players in the minors who have little to no realistic chance at playing in the majors and only have jobs because their teams aren’t paying them anything. From a player development perspective, the current minor league system is bloated.

But from a business and marketing perspective for the sport, the many Minor League teams play a huge role. With ticket prices for Major League teams out of reach for many families, Minor League Baseball provides a cheap way to build a fan base and loyalty throughout America. On top of that, there are many fans who live too far from a Major League team to realistically regularly attend Major League games. Minor League Baseball fills that void. Cutting some of those teams could impact the game’s fanbase for years to come.

MLB proposal for a “Dream League” sounds like just another independent league and the independent leagues are struggling financially at the moment and many teams have left the business in recent years. It doesn’t seem like something that would survive financially without large subsidies from MLB.

On top of this, this proposal would have a major financial impact on the minor leagues. The financial value of many teams would change overnight. Many teams are locked into long-term leases with their stadiums and eliminating their tenant, or even moving them to a different classification, could lead to years of lawsuits by the municipalities that own the stadium. MLB proposes that teams moving from Class-A to Triple-A would have to pay a fee to compensate those going in the other direction, and clearly many of those teams don’t have the several million dollars that MLB would expect them to pay under this proposal.

Once again, this is only a proposal at the moment, but it is clear that Major League Baseball is serious about changing the way that Minor League Baseball operates, mostly in ways that benefit themselves and hurt the minors. Lots of people would lose their job under this proposal. Not just players, but the many people who work in the front offices and as staff in MiLB.

Read both articles and comment below. This is potentially a huge change in the way baseball operates in this country.