MLB-MiLB negotiations look to redefine entire notion of minor leagues

  • Shifts to affiliated minors of baseball could include fewer teams, widespread geographic realignment
  • Facility improvements represent key early focus of ongoing negotiations
  • Current deal between the two organizations expires after 2020 season

Pat O’Conner, Minor League Baseball president, is essentially a baseball lifer, having spent all but 18 months of the last 38 years working in the sport since graduating college. As a result, he’s seen plenty of strife and conflict, including a 1990 contract negotiation with Major League Baseball that grew so tense, there were two separate sets of Winter Meetings, one for minor league operators and one for major league clubs, instead of the traditional shared event

But O’Conner says there’s been nothing in his long career quite like the Professional Baseball Agreement talks now ongoing with MLB.

The current master deal between MiLB and MLB, which governs a wide range of elements for player development in the affiliated minors, expires after the 2020 season. And rather than essentially tweak the basic relationship, as has been done since that tension of the early 1990s, MLB this time is seeking much more dramatic changes.

Among them: a potential 25-per-cent reduction in the number of affiliated MiLB teams from 160 to 120, a broad geographic reorganization of clubs that would change the classification level of some of them, and sizable shifts in how individual MLB and MiLB teams reach affiliation agreements with each other. The franchises excised from MiLB would become part of a so-called “Dream League” that would be independent and be comprised of undrafted prospects.

Among those teams targeted for potential removal are low Class A and Rookie League teams, including the Pulaski (Virginia) Yankees, who this year won Minor League Baseball’s prestigious John H. Johnson President’s Award as the most complete franchise in the affiliated minors.

The measures, if they become part of a final agreement, would represent some of the most radical shifts in Minor League Baseball’s 118-year history.

“There is a very different feel to the talks this time,” O’Conner said. “This feels more like a labor negotiation than the continuation of a partnership. We’re not afraid of change, and we’re not stuck in the past. We’re open to reform. But the severity of some of this coming in all at once could certainly be tough.”

MLB Commissioner Rob Manfred, for his part, said the league’s primary interest in the PBA talks with MiLB are to improve facility conditions throughout the system. Major league teams each year collectively spend hundreds of millions of dollars on signing bonuses for their draft picks, and then promptly send them off to minor league facilities that in some cases are considerably worse than the high schools and colleges they just came from.

“I don’t think it’s unreasonable to expect that we have facilities that are first class for some of the greatest athletes in the world, and that we have league alignments that are reasonable and not onerous for those same athletes,” Manfred said.

MLB Commissioner Rob Manfred presiding over the 2019 MLB Draft this past June, which saw another crop of players brought into the professional ranks and sent to the minor leagues. But Manfred is actively seeking a large-scale improvement to MiLB facilities.

Who pays?

There is little disagreement among the two sides that there are indeed at least several dozen facilities across MiLB in need of some type of meaningful upgrade. MLB in particular sees about a quarter of the teams playing in ballparks not up to acceptable standards, helping inform the early proposal to cut the number of teams. 

The immediate question is who pays the bill for all that renovation work, a sum that collectively would easily reach somewhere in nine figures across all of MiLB. 

Some early press reports suggested that MiLB team owners had no interest in absorbing that cost, something that O’Conner disputes. But he added there are also other considerations to the stadium revamps.

“It’s just not true that we won’t be part of improving the facilities that need work. We’re definitely in for improving player health and welfare, and we’re definitely in for improving facilities,” he said. “But it’s not just age of ballparks that we’re fighting against. The game has changed around us, and there are different needs we now have to address. 

And within that, it’s not just money we have to consider, but it’s time and how fast we can do this, and then the space within these facilities. And in a lot of cases, it’s finding the space to do all what needs to be done that can be the most challenging,” O’Conner said.

As of now, there appears to be relatively little sympathy for that position on the MLB side. Under the current economic structure of the affiliated minor leagues, MLB clubs already pay for player and coaches salaries, and the signing bonuses to help attract the talent, while the minor league team owners are generally responsible for the stadium upkeep and travel of the players.

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“I think the important points of this, there’s an economic system in minor league baseball where we heavily subsidize what goes on,” Manfred said. “We are more than prepared to continue to do that.

“Our preference was never to reduce numbers. It was to get to first-rate facilities. If we can’t get to first-rate facilities, I’m not sure it makes sense for us to send people to play in facilities that are inadequate, and continue to subsidize those inadequate facilities,” he said.

There is also the question of team equity. Thanks in part to Minor League Baseball’s continue popularity and steady ability to draw more than 40 million fans each year, top-performing team franchises have sold for more than $30 million, and values continue to escalate, just as they have at the major league level, albeit to much smaller numbers. 

But O’Conner estimates that the reduction of affiliated minor league clubs and changes in classification level for the remaining ones would result in a collective loss of more than a quarter billion dollars in franchise equity. There are also outstanding questions whether some of the potential franchise relocations would violate individual league bylaws.

Again, the MiLB argument is not particularly well-received in the major league side of the table, and they have pointed to a dozens of minor league team relocations that have occurred over the past 30 years, due in large part to the promise of new ballparks.

“Where does that [equity] value come from?,” said a representative for the MLB negotiators, speaking on the condition of anonymity. “It comes primarily from being affiliated with us.”

There are, however, two key points of conceptual agreement among the two sides. First, minor league player salaries that can run as a low as $1,160 a month for a five-month season and have been the subject of widespread criticism, protest, and even some lawsuits are due for a sizable increase, though it is not clear by how much or whether that will come at the expense of fewer affiliated teams. 

And second, both MLB and MiLB want a broad restructuring of the current affiliation process that calls for teams to pair up  in two- and four-year contract intervals, causing repeated and widely unliked virtual games of musical chairs where the last clubs standing on each side are then forced into alignment with each other.

Minor League Baseball President Pat O’Conner, who has overseen the affiliated minors since 2007 and been in pro baseball for more than 36 years.

Grassroots marketing

Beyond dollars and cents and ongoing battles over the quality of locker and weight rooms, the ongoing PBA negotiations also raise a bigger, more existential question: what is the value of the grassroots marketing MiLB provides to the sport?

Because of the low ticket prices of MiLB and the fact that more than 80 per cent of Americans live within the market territory of a MiLB team, this level of baseball has long served as a key entry point of fandom of the sport. And within that, Minor League Baseball also serves as a key breeding ground for not only players but also umpires, groundskeepers, trainers, and all types of front-office personnel, not to mention marketing and sales concepts that also can work their way up to the big leagues.

“We think Minor League Baseball brings an awful lot to the game of baseball,” O’Conner said. “I don’t think you can ignore the full package of what we bring to the table.”

Reid Ryan, Houston Astros president of business operations and also a veteran of minor league team management, concurs.

“Minor League Baseball has tremendous value because it helps grow our fan base for sure,” Ryan said. “They’ve done a lot of good for our sport, and we’ve enjoyed a symbiotic relationship, and hopefully that continues.”

Manfred, too, said, “we agree minor league baseball is an entree into fandom.” But he said that small Class A and Rookie League franchises that don’t play full-length seasons and would be foremost targeted for transition to the Dream League are not necessarily significant additions to the fan development equation.

“Many of those franchises average less than 2,000 people a game,” he said. “They’re not really major drivers of attendance in the minor leagues.”

The MLB Players Association does not represent minor league players. But the union, too, is closely watching the proceedings, and will have an adjacent voice in the process as part of its duty is to help negotiate the entry processes for players into the major leagues, such as the annual player draft.

“Anytime you’re potentially talking about the loss of jobs in our sport, it’s a cause for concern,” said Tony Clark, MLBPA executive director. 

More negotiations between MLB and MiLB are expected in November and December. And for the current public level of angst, Manfred called it a “momentary interlude” and that “over the long haul, minor league baseball will be at the table.”

O’Conner agreed, and said “we believe cooler heads will ultimately prevail.”

But he added the stakes will be enormous.

“However it turns out, this deal will be the most important document we’ll ever sign,” O’Conner said.

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