MLB is threatening to kill the minor leagues

Let’s start out with the good news. In a recent piece by Dave Sheinin in the Washington Post, the latest negotiations between MLB and MiLB about a new Player Development Contract (PDC) were described as “more cordial” than the previous ones. Even if no progress was made (and we don’t know whether any was or wasn’t), progress in any negotiation is more likely if the two sides aren’t throwing shoes at each other.

Now for the bad news. At the end of the Winter Meetings last week, Minor League Baseball and Major League Baseball issued dueling press releases and the fur was flying in that dogfight. Minor League Baseball started by issuing a statement that laid out their position on the issues point by point. MiLB acknowledged the need for some changes, but complained that MLB has not been clear about the exact standards that they want met. They also said that the contraction of 42 teams was unacceptable for them. Minor League Baseball said they were willing to negotiate, but they were not willing to be bullied into a deal.

Major League Baseball responded with a statement that can only be interpreted as an attempt to bully. First, they expressed their anger that these negotiations have been made public. Then, they dropped the hammer:

If the National Association has an interest in an agreement with Major League Baseball, it must address the very significant issues with the current system at the bargaining table. Otherwise, MLB Clubs will be free to affiliate with any minor league team or potential team in the United States, including independent league teams and cities which are not permitted to compete for an affiliate under the current agreement.

What MLB is saying, very simply, is that if the two sides do not come to an agreement, then Major League will simply start their own minor league in 2021.

Could they do that? Simply put, yes they could, although it would not be ideal for MLB. There are 28 minor-league teams currently owned by major league owners. On top of that, teams could be housed in the Spring Training complexes or even in some Major League stadiums when the Major League team was out of town. Some teams might need to double-up in a stadium, but MLB could live with that for the short term. Current independent leagues, like the Atlantic League, would be offered the chance to host minor league teams. It wouldn’t be ideal and each major league team probably couldn’t run six minor league teams like they do now, but MLB doesn’t want that many minor league teams anyway.

For currently-affiliated minor league teams, this would be a disaster. They would all instantly become independent league teams and quite frankly, they are currently ill-equipped to do that. General managers in Minor League Baseball are great at promotions and running a staff of employees that work hard to make sure you have the best fan experience possible when you walk into a stadium. Many of them are also terrific at navigating the murky waters of local politics and zoning regulations. But scouting and signing baseball players? That’s something that none of them have had to do in at least a generation. Nor do their current budgets account for the salaries and insurance necessary to field a baseball team.

(By the way, the fact that MLB believes that the current independent leagues would jump at the chance to be affiliated teams contradicts their stated position that the independent “Dream League” would be just as attractive to fans as affiliated ball.)

The minors would not be able to hold out for long in such a situation. These aren’t organizations with a huge reserve of cash to get them through business war like this. They would likely be forced to quickly fold and agree to all of MLB’s demands, which would probably include even more draconian cuts to the minor leagues.

Major League Baseball’s position is that if you were designing a player development system like this from scratch, you wouldn’t do it the way the minor leagues currently operate. Diamondbacks GM Mike Hazen and Blue Jays president and CEO Mark Shapiro make that point in this article by Tim Brown. They say that by cutting and streamlining the minor league system, MLB teams could spend more time and money developing the players with a more realistic chance of being major league ballplayers. They also make the whole “leveling the playing field” argument that is beloved by small-market owners. How much you feel that MLB should do to make the Miami Marlins and the Milwaukee Brewers better is a philosophical argument that has no real answer, but most people’s opinion is dictated by whether or not they are a fan of one of the 10-12 most popular and lucrative major-league franchises. (That includes Cubs fans.)

The honest truth of the matter is that it’s true. If you were designing a player development system for MLB, you wouldn’t have created the current system. But the current system wasn’t designed for player development. It was designed to limit and eliminate the competition.

Without getting too deep into the history of the Minor Leagues, the minors used to be free and independent. They operated exactly like a major league team did, just in a smaller market with a lower payroll. This meant these leagues were competition, not just for fans, but for the services of players. The two sides quickly realizes that competing was driving up costs for both sides and started making agreements to limit that competition. Eventually, the current system was created where MLB would supply the players for the minor league teams. MiLB got players for their teams and MLB got a place to stash dozens and eventually hundreds of quality ballplayers while still keeping them under team control. That was not only great for player development, it was also great to keep those players from forming the core of a competing third major league.

This deal freed the minor league teams from the burden of building a team and allowed them to concentrate on their core business of creating a family-friendly fun experience for fans at the ballpark. Most minor league teams are very good at this. Over the past 30 years, this has become very successful and quite lucrative for the top minor league teams.

Now that the threat of competition from the minor leagues (and even a third league) is pretty much over, MLB wants to re-write the rules yet again to the benefit of their interests and against the interests of the owners, executives and fans of Minor League Baseball.

What leverage does MiLB have? As noted above, very little. Most would struggle to stay in business without MLB supplying the players, coaches and trainers. The only real leverage they have is public opinion. That’s why commissioner Rob Manfred is so upset that these negotiations became public. As one minor league owner said last week:

Rob is attempting to decimate the industry, destroy baseball in communities and eliminate thousands of jobs, and he’s upset that the owners of the teams have gone public with that information in an effort to save their teams. That’s rich.

This is why, no matter what you think about him in other areas, the work that Senator Bernie Sanders is doing in calling attention to MLB’s proposal is important. Shame, and the threat of the loss of what is left of their antitrust exemption, the only way that MiLB can gain any leverage in these negotiations.

To be fair to MLB, commissioner Rob Manfred has said that the proposal to contract 42 minor-league teams is only that, a proposal. It is not a “take-it-or-leave-it” demand. But if MLB wasn’t clearly interested in a significant contraction of the minor leagues, they would have issued a more firm statement about that by now in the face of these stories.

It should also be said that if this proposal to cut about a quarter of minor league teams goes through, it will affect far more teams than the ones contracted. The value of every other team would go down, knowing that they could be snapped out of existence at the whims of MLB during the next PDC negotiations. Commissioner Manfred is inevitable.

The minor leagues, as we know them, are currently hanging by a thread. The only thing that can stop this is the disinfectant of public opinion.