As you’ve probably seen, in late October word broke that Major League Baseball had proposed a plan that would eliminate 42 current Minor League teams. The plan would basically cut out all non-complex level rookie leagues. And the plan would include massive re-alignment of the current leagues to shorten up road trips and travel. Not all of the teams were rookie-level teams, though – just a majority of them. Within the Cincinnati Reds farm system two of the full-season affiliates, the Daytona Tortugas and the Chattanooga Lookouts, were among the 42 teams on the chopping block.

This week things got rather contentious. Rob Manfred and Major League Baseball took offense that the negotiations went public – as if for some reason Minor League Baseball owners would not try to do what they needed to do in order to save their livelihoods. Early Friday evening Minor League Baseball released a statement that outlined the issues brought up by Major League Baseball and addressed each one – calling some outright lies, and offering solutions to others.

That statement did not sit well with Rob Manfred, who handles criticism worse than I do. Manfred and Major League Baseball released a follow up statement last night, and it was basically how you would expect a child to respond when they have the basketball and they don’t get to be the team captain.

If the National Association [of Minor League Clubs] 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.

They will take their ball and go home. That’s basically what Major League Baseball is saying. And realistically, they have all of the power. If they wanted to, they could literally just run the entire farm system out of the spring training complexes. Just like they do it during the spring when they play two games at a time at every complex – they can do the same exact thing all year. In Florida, once the complex league begins in late-June, the Gulf Coast Rookie League teams play their games in the morning on the same field that the Florida State League teams play their games on in the evenings. That can happen. And realistically, it’s an option to happen moving forward.

That’s why they are taking such a hard-lined stance here. They know that they realistically have all of the power. The only power that Minor League Baseball has is public pressure and the hope that through legal means that they can get Congress to put pressure on Major League Baseball through looking into their anti-trust exemption. At this point, though, with how well established Major League Baseball is, and the sheer amount of money that they have – taking away their anti-trust exemption at this point would take decades, if not more, to have any sort of real effect.

The Florence Freedom aren’t a threat to the Cincinnati Reds. And they likely never will be. They have an operating budget that’s lower than the price of signing one first round draft pick. They aren’t going to be able to put together a team that’s going to have the kind of players that’s going to put pressure on a Major League team. And neither is any other team around the country. Major League Baseball has revenues over $10,000,000,000 a year. This isn’t like 1940 when the monies in baseball were almost all made on ticket sales. The Dodgers television contract pay them hundreds of millions of dollars per year. Competing against that is about as much of a non-starter as it can be if you are starting from scratch.

Major League Baseball simply doesn’t care about the game of baseball. They care about how much profit they can make. And that’s not to say that the Minor League Baseball owners as a whole are perfect here. Major League Baseball isn’t wrong on all of their assertions, though it’s going to take a whole lot to convince me that they actually care about those assertions rather than simply using them to try and cut teams and save money – because if they actually cared about them they’d have been brought up long before six months ago.

Minor League Baseball is publicly stating that they are willing to work with Major League Baseball on pretty much every single point that Major League Baseball claims are reasons to cut 42 teams. In response, Major League Baseball instead has thrown a fit in public. And the reason it seems that they are doing so is because they don’t actually care to address the problems they speak of, but rather they simply want to cut teams out of the system because it means less players and staff to pay.

It was merely a handful of months ago that Congress pushed through the Omnibus Spending Bill, some 1400 pages of a bill that was introduced and finalized with less than 24 hours before voting on it. Tucked into that bill was a trimmed down version of the “Save America’s Pastime” Bill, which essentially was to set the wage standards for minor leaguers so that they didn’t qualify to be paid more than minimum wage and only had to be paid for 40-hours a week regardless of how many hours that they actually worked. The bill that died before it even reached the floor on it’s own was lobbied for by both Major League and Minor League Baseball. Reportedly there were millions of dollars spent lobbying for that. Since it couldn’t make it on it’s own, it was tucked away into a 1400 page bill that made it not worth fighting over, if you could even get to that page in the bill before you had to vote on it, and passed without issue.

And that’s what this is actually all about. Money. It was less than two years ago that Major League Baseball literally spent millions of dollars to make it so they didn’t have to pay Minor League Baseball players anything beyond minimum wage for 40 hours per week. But that blew up in their face as it went public and the public outcry was basically “wait, what’s happening here? This is ridiculous!” and they’ve been feeling the pressure, along with ongoing lawsuits over minor league pay, to increase the amount of money they are paying their employees.

That public pressure is seemingly going to make them pay their players more. And as a result they are likely looking to just cut jobs and pay those who remain better. Eliminating 85 jobs and increasing the pay for the rest of the 150 players doesn’t make much of a difference on their books and they can say that they are doing the right thing by paying them better now – all while hiding behind the fact that they aren’t spending much more money, it any more money at all than they were prior.

For the price of a solid middle reliever, Major League Baseball teams could pay every single player in their farm system $25,000 a year. Even for the guys in Triple-A who haven’t yet reached free agency, that is nearly a 300% raise. For the guys at levels lower than that, it’s an even bigger one. The odds that they go that far are next to zero. But that’s what we’re actually talking about here. An increase in spending by teams worth over a billion dollars, of less than $5M a year. The reality is that this is probably over something closer to an increase in spending of maybe $1.5-2M a year because teams probably aren’t going to start paying everyone $25,000 a season.

It’s chump change. It’s the equivalent of a $40,000 a year salary and an increase in spending being $156 for the year. You wouldn’t even feel it. But that’s essentially what this whole thing is over. Pocket change. But they are going to absolute war over it, and in the process threatening the long term health and growth of the game.

16 Responses

  1. Michael Smith

    MLB is going go thru with this no matter what. Short sighted imo for the long term health of the game

  2. Tom

    Profit is piety in today’s world. Do not transgress the mighty god of profit.

  3. Richard Thompson

    Well – It looks like more than ever that I should choose a trip to Billings this Summer to try catch some games while they are still a Reds affiliate.

  4. Doc

    Fans can vote with their wallets. Boycott MLB games and attend minor league games. It is totally within the power of the fans to do so. Whether they do so or not will say a lot about how the fans really feel rather than how they say they feel.

  5. Simon Cowell

    I for one prefer a separation of milb from mlb. 100% separation. MLB from both the player and the owner perspective feel as if there is no competition to their product and that is the fundamental problem. Let Milb build their own teams, fanbase, leagues, and championships.

    Maybe the Milb under self-governance can alter the course of a game that is based nearly exclusively on homers and strikeouts.

    • Norwood Nate

      Thanks Bill for your continued efforts to offer more perspective and balance. Seems like there’s a lot of blame to go around on both sides. Minor league baseball seems to be the side that took this public in the first place, which seems like a ploy to get public perception on their side. Yet ignores much of their culpability in not meeting the standards they’ve been asked to maintain. That Firefrogs situation is a mess and I can see why MLB wants to move away from a structure that allows such mismanagement.
      Still, like I felt initially, this is a billionaires verse millionaires squabble and I could care less who gets to protect more of their money in the end. What’s frustrating is this is yet again a situation where the public at large, players just trying to follow their dreams, and small town economies will be the victims of the privileged.

  6. Matt V

    Doug, I like you and I appreciate your passion for minor leaguers being paid fairly, but your logic on this one is off, and it’s a pet peeve of mine that drives me insane, so I have to refute you on this.

    You say “An increase in spending by teams worth over a billion dollars, of less than $5M a year… It’s the equivalent of a $40,000 a year salary and an increase in spending being $156 for the year. You wouldn’t even feel it.”

    Let’s consider our terms. There’s a business’ worth, revenue, and profit. The equivalents for a household are (respectively) net worth, salary, and amount saved. You are conflating a business’ worth with a household’s salary, which is a false equivalence. The better comparison would be a business’ revenue. According to Forbes, the Reds’ revenue in 2018 was approximately $257 million. Increasing that by $5 million would be like increasing the expenses of a household with a $40,000 salary by nearly $800 every year. That’s not chump change. They’d feel that.

    Again according to Forbes, the Reds’ operating profit was $37 million in 2018 (and that’s not NET profit, it’s still before any expenses due to interest, tax, depreciation, and amortization). Adding $5 million in expenses would cut their operating profit by 13.5%. That percentage would be look even worse if we were looking at net profit (a number we don’t have available to us). Not to say there’s no way they could afford it, but again, that is not chump change, and they do run a business. And I’ll re-iterate here: I do agree that minor league pay is a problem. I just hate the way you’re making your point and feel like you’re throwing around really misleading numbers.

    I know $37 million (14.4% of revenue) seems like a ton of profit (again, operating profit, that’s not “take-home” net profit), but the money the ownership group has invested in the Reds could be invested anywhere else. Compare to, say, Disney (revenue $69.6B, operating income $14.9B, 21.4%) and it doesn’t look exorbitant at all.

    • Simon Cowell

      This is one of the best comments I have ever seen on here. $37 million dollars isn’t much profit for a professional sports team and it doesn’t leave them that much room for growth opportunities or added salary.

      A single lawsuit could shut this organization down. Unlike the Yankees and their $670 million dollar profit line.

      • Bill

        I agree Simon! Much more clear than I could have done. Just to reinforce what @Matt is saying: interest expense, amortization and taxes are ADDITIONAL cash outflows from that $37M which for the Reds was almost double any other year. It looks to me like the new TV contract started to kick in this year.

    • Pokey Reese's Red Hot Bat

      I agree using the team’s value rather than revenue grated but this is something they can definitely afford. They paid Homer Bailey more than that last year to not play for them. They just splurged $64m on one player over 4 years.

      They can afford under $5m per annum to give their prospects a decent standard of living.

      If they have to cut their cloth slightly differently so be it.