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A Complete History Of The Working Agreement Between Major And Minor Leagues

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(Photo by John McCoy/Getty Images)

For most baseball fans, Major League Baseball and Minor League Baseball are inseparably linked. The minor league teams are the farm teams. Players sign with the big league club and then climb the minor league ladder, step by step, until they reach the majors.

As most fans understand it, the minors and majors work together.

In reality, things are not as simple as they seem. Stretching back to the late 1800s, there were numerous professional baseball leagues around the country, and at one point the leagues did not work together. Players could be swiped from one league to another as contracts often were not honored.

After the National League and American League began stealing players from other leagues, a number of leagues banded together in 1901 to form the National Association of Professional Baseball Leagues. The organization remained the National Association until the rise of independent leagues in the 1990s led the affiliated minors to decide to trademark the Minor League Baseball moniker. To keep things simple, we will refer to the minors as MiLB, even though that name didn't arrive until the early 2000s.

In 1903, the National Association and the two major leagues reached an agreement by which all leagues recognized each other's contracts. Also, a draft was established to allow for upward player movement—it still exists today as the Rule 5 draft—and a structure for teams to purchase player contracts from lower-level leagues was developed.

That agreement has remained in some form for more than a century. The negotiations have generally been amicable, even as the success of the minors waxed and waned. At first, every minor league team was completely independent with no ties to the major leagues. Then, Branch Rickey decided it would be easier and more efficient to simply own minor league teams. At first, this was illegal—and Rickey's Cardinals were punished—but eventually, it became the generally accepted practice.

By the 1940s, major league teams owned plenty of minor league clubs and had numerous working agreements with MiLB teams they didn't own.

That was the golden age of MiLB, but just a decade later in the 1950s, MiLB was losing many teams and leagues as attendance plummeted and television became pervasive. However, the rise of television ultimately ended up providing a financial lifeline for the minors. Because MLB and MiLB recognized and respected each other's territorial boundaries, technically minor league teams could prevent MLB teams' games from being televised in their territories. In return for being allowed to televise games in MiLB territories, MLB teams provided financial aid that helped minor league teams survive. By the late 1960s, MiLB teams received a share of MLB's television income—payments that continued for several decades.

In 1962, MLB and MiLB formed the structure that still exists today. MLB teams signed player development contracts, or PDCs, with MiLB teams. That PDC requires the MLB team to provide players to the minor league team and ensured that the MLB team would pay a portion of the salaries of minor league players. But at the time, both sides operated under the artifice that minor league teams had some control over minor league players. For every promotion or demotion from a minor league roster, the MLB team paid a transaction fee to the minor league club.

Throughout the 1960s and 1970s, the terms became more and more generous to MiLB teams, largely because without the help, many teams would likely have folded. As minor league baseball became more successful in the 1980s, MLB owners—who had almost universally sold off their MiLB franchises during the rough years of the 1960s and 1970s—felt that they were carrying too much of the minors' financial burden.

And that led to 1990, the most contentious, ugliest Professional Baseball Agreement, or PBA, negotiations the minors and majors had ever seen.

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Pirates Focus On Improving Player Development

The fact that Pirates prospects tended to improve dramatically with new organizations did not go unnoticed by ownership.

Up until that point, the minors and majors had worked largely hand in hand. That changed in 1990, when MLB demonstrated who had the power in the relationship. MiLB went into the 1990 PBA negotiations expecting that little would change. MLB went in the negotiations looking to dramatically change everything.

The negotiations went so poorly that there ended up being two separate Winter Meetings—one for the minor leagues in San Diego and a major league version in Chicago. MLB strongly suggested to its teams to not extend PDCs into 1991. As the negotiations went on, MiLB teams began preparing for the possibility that they would have to sign and pay their own players for the 1991 season. MLB also began preparations for teams to have all their minor league players play games at their spring training complexes.

It didn't come to that, but MiLB owners ended up holding their noses to sign a deal that they felt was slanted dramatically in MLB's favor. MiLB president Sal Artiaga ended up being replaced in 1991 in the aftermath of those PBA negotiations.

In reality, that PBA wasn't nearly as one-sided as MiLB owners believed at the time. The stronger facility requirements led to a building boom as many cities built new ballparks. Many more fans flocked to the new and upgraded facilities, leading to increased revenues—and valuations—for MiLB teams. And eventually, MLB teams took on the sole responsibility for paying the players, instead of the shared arrangement that once existed.

The 1990 PBA was set for seven years, but either side could reopen the negotiations after three years, which was expected at the time. But by 1994, when the window for reopening arrived, the major league players' strike meant that neither side felt it was time to do anything. In the end, the deal was renewed with few negotiations. It has been renewed multiple times since in similarly quiet fashion.

A year ago, it was expected that this PBA negotiation would lead to the first significant improvement in the facilities requirements since that 1990 PBA. It's proven to be about much, much more.

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