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Under the cover of a pandemic, MLB continues to push forward with minor league contraction plan

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Precarious financial situations for minor league clubs have strengthened MLB’s position.

Fans take in a minor league baseball game at Pohlman Field i
Pohlman Field.
Photo by Alan Solomon/Chicago Tribune/Tribune News Service via Getty Images

For fans in the United States, sports have ground to a halt as the country works to deal with the COVID-19 pandemic. The NBA kicked things off by suspending their season after Rudy Gobert tested positive for the virus. There was no March Madness in college basketball this year, and all winter and spring sports championships were cancelled. The National Hockey League, Major League Soccer, XFL, PGA Tour, the summer Olympics, and other major sporting events are on hiatus. The NFL will hold a socially distanced draft next week, but the league is currently discussing shortened-season scenarios. And of course, MLB shut down Spring Training and has indefinitely postponed the regular season that was supposed to begin on March 26th.

There are not ballgames games to watch every night, no box scores or statistics to pour over, nary a lineup decision for the baseball devotee to second-guess. But the business side of Major League Baseball continues to march on. What the fan cares about most, of course, is seeing games again in some capacity. To that end, the league and Players’ Association continues continues to discuss possibilities regarding the resumption of play, including rumors of an abbreviated season hosted at the Spring Training sites in Arizona with players and personnel quarantined in hotels in order to face off in contests with no fans present. Additionally, though, the coronavirus outbreak has provided MLB cover to move ahead with its plans to deliver a death knell to minor league baseball as we know it.

For those unfamiliar, the MiLB contraction and realignment plan first reported back in November would shrink the minor leagues by 25%, going from the current setup of 160 teams down to 120 by eliminating 42 active clubs and adding two independent franchises to the umbrella of MLB-affiliated baseball. The short-season circuits such as the Pioneer League would be done away with as each MLB organization would field only four full-season minor league clubs from A-ball though Triple-A, along with complex-level teams at Spring Training sites and international academies. The remaining affiliates would be realigned and reassigned based on facility quality and geographical preferences. In addition, the MLB Draft would be cut from 40 rounds down to 20 and moved to August, and that could come with caps on bonuses for late-round picks and undrafted players if the way the shortened 2020 draft is any indication of how things will be handled moving forward. The current Professional Baseball Agreement is set to expire after the 2020 season; MLB’s proposal for a shrunken minor leagues would go into effect as soon as next year.

At the MLB level, where virtually every franchise is now valued at $1 billion or more by Forbes, they are well-positioned to weather the COVID-19 storm. A shortened season in front of no fans would still mean local and national TV revenue, but even if all 162 games are cancelled, there aren’t going to be any big league teams folding before 2021. In the minors, however, there is no television revenue to be had and nowhere near the same type of cash reserves to fall back on. Margins are much tighter as teams rely almost solely on gate revenue to survive; there have been estimates that at least 10 and possibly up to 40 MiLB clubs would be forced permanently out of business if no games are played in 2020.

These facts of life have weakened the bargaining stance of MiLB in PBA renewal talks, and have given strength to MLB to become even more bold in their plans move ahead with the restructuring plan. According to a story from Ballpark Digest, “[i]nsiders with direct knowledge of the proposals in both MLB and MiLB peg the survival of Minor League Baseball as an operating entity and its associated leagues at 50-50.” The report indicates that Major League Baseball will not only look to develop their own franchise system and allocate affiliates as they choose, but also move to take over most or all of the business operations of Minor League Baseball, eliminating the minor league offices and executive personnel as part of the consolidation. MLB would have increased power when it comes to dictating the terms of facilities, improvements, and operations of minor league clubs; the author suggests that this could include the forced adoption of digital ticket technology and the use of MiLB customer data for MLB marketing purposes.

The 42 teams slated for contraction has yet to be officially finalized, but a preliminary list can be found here. Oddly enough, this plan was reportedly conceived by the now disgraced former GM of the Houston Astros, Jeff Luhnow, and he received strong initial backing from former cohorts Mike Elias (now GM of the Orioles) and David Stearns of our hometown Milwaukee Brewers. Of course, none of the teams that are already owned by MLB organizations (such as the Carolina Mudcats, whose stadium opened way back in 1991 and hasn’t been renovated since 1999) are scheduled for elimination. The group includes only one affiliate of the Brewers — the short-season Rocky Mountain Vibes of the soon-to-be eliminated Pioneer League. But professional baseball in the state of Wisconsin would be affected by the loss of the Beloit Snappers (pending the progression of a new downtown stadium plan).

While this plan would allow big league franchises to be “more efficient” (ie, save money) when it comes to player development, it leads to larger questions of the continued growth of the game and MLB’s role as the supposed stewards of professional baseball. Fangraphs has estimated that as many as 16 million people — fans and potential fans — could be cut off from realistic access to in-person, professional baseball games thanks to this restructuring. Perhaps some of these disenfranchised fans will turns to television or streaming services to get their fix (though many will have to deal with the league’s arcane blackout rules), but for many, that is not an adequate substitute for the experience of seeing a professional game at the ballpark, especially in the more affordable and family-friendly atmosphere of the minor leagues. How does taking teams away help to create interest in the game and new generations of fans?

MLB’s answer to this is the idea of a “Dream League,” an independent baseball league formed by contracted affiliates to keep professional baseball in those cities and give undrafted and unsigned players somewhere to begin or continue their professional careers. Details as to how this proposal would work in practice are sparse, though it has been reported that while the league would come with “support” from Major League Baseball, that does not mean any kind of financial backing. But whether it’s starting the supposed Dream League or joining an already established independent circuit like the Atlantic League, American Association, or Frontier League, the reality is taking on the responsibility of paying players is not feasible for most of the outgoing affiliates.

Under the current PBA, Major League Baseball is responsible for paying the salaries of players and coaches that they assign to their minor league affiliate teams. But independent baseball franchises are responsible for finding and paying their own players, with varying salary structures and caps in place depending on the league (Frontier League salary cap is around $75K per team per season, while the American Association is nearer to $150K and the Atlantic League is around $275K). Depending on the rules governing the hypothetical Dream League or other independent circuits that could be joined, Baseball America estimates that the change could mean an additional $300K-$400K in additional cost to individual clubs per season. Perhaps as many as 10 of the contracted markets could support these added responsibilities, but the rest would likely be left by the wayside.

With some 1,200 fewer playing jobs in affiliated baseball, it is only natural that an expansion of the independent leagues would occur. But just how significant that will be remains to be seen. As discussed above, those teams will have to find markets that can support a professional baseball franchise, which will still leave most fans rural areas in the dust. Additionally, the shortened draft and fewer entryways into affiliated baseball will no doubt change how collegiate players evaluate their future prospects going forward. Would Harvard graduate Brent Suter, a 31st-round pick by the Brewers in 2012 who has now pitched in parts of four big league seasons, have even bothered with a professional baseball career if he had instead been an undrafted free agent who would have had to go to independent ball and hope to catch the eye of an MLB club?

We don’t know yet if there will be any level of professional ballgames played in 2020. But when baseball does return for good, it is becoming more and more clear that there will be far fewer games being contested across the country. This not only means less opportunity for players and coaches to realize their big league dreams, but also the loss of thousands of jobs like ticket sales, concessions, parking lot attendants, ballpark maintenance, and other gameday, operations, and support personnel. Affected communities left without teams but who may still on the hook for taxpayer-funded stadiums. But hey, if this is all in the name of more efficiently funneling money into the pockets of MLB ownership groups, then it’s worth it. Right?