Several Minor League Teams Could Be in Jeopardy

CHARLOTTE, NC - JULY 13: The Triple-A All Star logo is photographed during the Sonic Automotive Triple-A Baseball All Star Game at BB&T Ballpark on July 13, 2016 in Charlotte, North Carolina. (Photo by Gregg Forwerck/Getty Images)

The end of the current Professional Baseball Agreement (PBA) has been a constant topic of conversation throughout 2019. Now, thanks to a recent proposal, that conversation might get even more heated.

With the 2020 expiration date of the current PBA drawing closer, both sides are already quite far apart. The latest proposal by Major League Baseball to eliminate 42 minor league teams isn’t helping that cause. The proposal would affect more than three dozen cities and thousands of minor league players.

Should the proposal go through, it would cut Minor League Baseball from 160 teams to 120 that are wholly MLB owned in 2021.

It’s All About the Money

Just like most things in life, at the heart of this proposal lies the topic of money. Saving or possibly adding money is the driving force behind it, and the primary engines regard minor league facilities and player pay.

Major League Baseball, for quite some time, has had an issue with MiLB facilities. The proposal seeks to drastically improve minor league facilities as well as how the minor leagues are organized. It would put everything about minor league baseball into a spin as affiliations and geography of leagues would be altered. That alone could cause a lot of ruffled feathers because all of that has been under MiLB control for over 100 years.

While MiLB has long been vying for improved facilities and standards, that seems to be the only common ground between them and Major League Baseball. It starts with Player Development Contracts, which creates an affiliation between an MLB club and minor league franchise ownership. That affiliation means MLB clubs provide players and staff to MiLB teams.

Currently, PDC’s are negotiated every two years and are on two-year terms. That is something that MLB is currently not pleased with. Owners are increasingly buying MiLB teams to avoid ending up in poor minor league facilities.

Under MLB’s view, roughly a quarter of MiLB clubs play in facilities deemed far below acceptable standards. The proposal is basically a way to force MiLB’s hand at improving facilities, and guaranteeing stadiums are up to acceptable MLB standards in the future. MLB views reducing MiLB teams as a way to put more into stadiums and player pay. By forcing minor leagues to reduce teams, the expectation is that minor league salaries will rise over time while minimum salaries will see a 50 percent increase.

Should MiLB not go through with improving stadium facilities, the proposal would reduce the number of affiliated minor league teams. MLB theoretically would help MiLB ensure that the remaining 25 percent of clubs that don’t meet the standards have teams. Those teams, however, would not be affiliated with MLB teams.

The Importance of Affiliation

There is a multitude of independent leagues and teams all across the country that aren’t associated with MLB franchises. With such leagues available, some question why getting cut would be all that bad for a team. The simple answer lies in the importance of being an MLB affiliated team.

Values alone for MLB affiliated clubs are significantly higher than independent minor league teams. That is where PDC’s come into play yet again. They are practically the only way to be affiliated with an MLB franchise. While there can be an unlimited number of independent teams, there are only so many PDC’s available that tie teams to MLB teams. Even with that said, as of now, there is no limit to the number of minor league teams an MLB franchise can have.

The affiliation with a Major League Baseball franchise means some financial help as well. Currently, MLB teams are responsible for all players’ and coaches’ salaries across all minor league teams. With organizations having up to four or five minor league teams, that seems to be an area of interest for MLB in wanting to cut teams.

There has been a long history of MiLB clubs, but without a PDC, there’s no tie to Major League Baseball.

Changing the PDC Process

If you can’t tell already, Player Development Contracts (PDC’s) have a significance role to play in this proposal. It is perhaps one of the most important pieces of the puzzle.

En route to improving payer play, MLB wants MiLB teams to share in the proposed player salary increase even though minor league teams pay for staff, travel, and other expenses. In the proposal, MLB also wants to change the PDC process completely, beginning with reducing PDC count from 160 to 120. In doing so, such a move would practically eliminate four non-complex rookie leagues and other short season leagues from the minors.

The proposal by MLB also wants to wipe out the two year PDC negotiating process altogether. MLB wants to replace the two-year process with something more long-term. While that would give MLB teams more certainty, it would basically eliminate the negotiating power MiLB teams get every two years.

Structural Changes

If we were to stop there, this would be a huge story in and of itself. Unfortunately (or fortunately), there is far more to the overall proposal saga.

There are even more changes Major League Baseball would like to implement with the proposal. Along with eliminating 42 teams, MLB would like to reconstruct the entire minor league setup. Within the proposal, there would still be the standard Triple-A, Double-A, High Class-A, and Low-Class A. Under the proposed setup, the leagues would be redirected to be more geographically compact.

That change alone means an entirely different landscape. In Triple-A, the Pacific Coast League would drop from 16 teams to 10 teams, and the International League would grow to 20 teams. The Low Class-A South Atlantic League would take the biggest cut from 14 teams to just six. That would then make way for a whole new Mid-Atlantic League to form. The Northwest League, which is currently wielding a short-season format, would transition to full season.

Value

From there, the topic of value comes back into the overall conversation. In addition to asking teams to move up or down levels, each level would be given a set value.

As noted by BaseballAmerica, Triple-A would be valued at $20 million while Double-A would come in at $15 million. High-A would be valued at $10 million and Low-A at $8 million. Short-season and Rookie-level teams would be viewed at $6 million. From there, some rather unpopular changes would include teams moving from Single-A to Triple-A. These teams would have to pay $12 million to change leagues. On the other side of the spectrum, moves including going from Triple-A to High-A would earn a $10 million compensation.

This move would surely pull hairs because those proposed values do not match up with what the teams would actually go for on the open market. A Low-A team with high attendance could easily eclipse the value of a High-A team with low attendance and so forth. MLB has even talked about bringing in some independent league clubs to fill in any gaps.

Shedding Players

Alongside the loss of 42 teams will be the loss of a plethora of players. Each MLB club would be restricted to 150-200 players within their minor league ranks. However, the proposal does not address those playing in the Dominican Summer League.

Some teams may end up shedding up to 100 or more players. A great example of this, as noted by Baseball America, points to the New York Yankees. They currently possess eight U.S. based minor league teams, equaling up to 285 players under contract. Under the proposal, all MLB teams would have five minor league affiliates, including one complex-based rookie league.

The Draft Is Not Spared

While these changes may not be as hated against, the overall MLB proposal does propose changes to the MLB draft.

The proposal pushes the amateur draft back to August and cuts the rounds in half from 40 to 20-25 rounds. Pushing the draft date back would likely mean no actual playing time at the professional level. That would be due to the changes that would eliminate short-season and non-complex Rookie-Leagues.

The process would then turn into drafted collegiate players heading to Low-A ball in the following spring while high school draftees would join international picks in the complex-based leagues.

Those Left Behind

For those minor league owners who would have their teams stripped away from them, they would likely be compensated. The displaced teams would be placed into a suggested “Dream League.” Current players and undrafted players could have the option of entering such a league. The league, however, would be no more than a somewhat independent league itself.

Teams in the league would have to find their own players (with “help” from MLB), and players would be paid modest salaries. MLB teams then have the option to purchase Dream League players in-season for $5,000.

Right now, it’s a rough estimate that going from affiliated baseball to the “Dream League” would add $300,000 to $400,000 in costs to clubs. Those costs would be broken down into salaries, workers’ compensation, staffing, and more.

Still up for Debate

While all of this may seem scary, it’s not quite time to panic. Nothing has been solidified or acted on, and right now, it’s business as usual. Both sides have taken October off from negotiating but are expected to pick things back up in November. Should the proposal go through word for word, it would be the biggest shakeup to the minor leagues since they were reorganized back in 1962.

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