MLB Threat Pushes Negotiations With MiLB To Another Level

Image credit: Pat O'Conner (File photo)

SAN DIEGO — Major League Baseball and Minor League Baseball shared the same Las Vegas hotel at last year’s Winter Meetings. A year later, the MLB contingent was at the Grand Hyatt, while MiLB was housed at a Hilton down the road. Physically, the two groups were separated by only a mile. After a few rounds of negotiations—both in conference rooms and in the media—the sides appear much farther apart. 

When negotiators for both sides met on Dec. 6, the rhetoric was turned down. The meetings were described by both sides as cordial and both MLB Commissioner Rob Manfred and MiLB president Pat O’Conner each made conciliatory public comments.

After the meetings, however, the sides were no closer to an agreement. Instead of working on the issues on which both sides have demonstrated some common ground (increased facility standards, reduced travel through interleague play or other schedule tweaks) the discussions began with MLB’s plan to eliminate short-season and rookie leagues that are not solely owned and run by MLB.

MiLB has zero interest in reducing to 120 full-season clubs, plus the Rookie-level Gulf Coast and Arizona Leagues, which are owned and operated by MLB. And so the impasse remained. No one budged.

The cordial tone that was offered at the Winter Meetings didn’t make it to the weekend. On Friday night, MiLB went public with its negotiation points for the upcoming Professional Baseball Agreement, detailing what it saw as MLB’s mischaracterization of its negotiation positions.

In return, the league laid out how it is willing to work with MLB on improved facility standards, on player welfare, on scheduling and even league realignment. From MiLB’s perspective, the biggest issue is their refusal to agree to MLB’s proposal to reduce MiLB to 120 teams.

Major League Baseball’s response made plain the threat that had hung over the negotiations for several months—come to an agreement somewhere close to our terms or we’ll walk away from the table. In doing so, MLB has spoken what had previously only been implied—it is prepared to walk away from 120 years of cooperation. In a statement released this weekend, MLB said:

“We do not believe it is productive to engage in further public debate with the National Association over a successor Professional Baseball Agreement. We suggested several weeks ago that the parties agree to conduct their negotiations in private to minimize the public acrimony, but were told that the Minor League owners had no interest in changing a heavily subsidized system that is very beneficial to them.

“If the National Association 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.

“But whatever the outcome, MLB has assured every public official who has contacted us that MLB will preserve organized baseball in a compelling, fan-friendly format in every American city that currently has an affiliate. MiLB has not made such a commitment, and even now multiple teams are actively trying to leave their communities for better deals elsewhere.”

Those 191 words contain the threat that could forever change professional baseball in the United States. If no PBA can be reached by the end of the current deal (Sept. 30, 2020), MLB could decide to leave behind the existing minor league structure and develop a new system. Assuredly, some existing MiLB teams would be offered a choice—join the new MLB system or stay with the current MiLB system (but without the players that are currently provided by MLB teams).

This timeline could happen in just five or six months. While the current deal will expire at the end of the 2020 season, teams need to start planning for 2021 well before the 2020 season ends. If an agreement is not reached by June or July, contingency planning on both sides will reach a fever pitch.

If it ever gets to that point, MLB believes it could pull the 28 MLB-owned teams into their new league. On top of that, as they saw in 1990, some other Triple-A and Double-A owners could be induced to join the hypothetical new MLB league because they are largely unaffected by MLB’s proposed changes. Add the threat of using many of the 30-plus teams in the three independent leagues as sites for teams and MLB could quickly get to a viable minor league system of as many as 90 teams, assisted by playing more games at their spring training complexes in Arizona and Florida. It could even look at using some existing college baseball stadiums.

If it gets to that point, MiLB’s options are much less appealing. MiLB owners could continue to operate their teams—the PBA only legislates MLB providing players. Theoretically, all MiLB owners could become independent operators, signing and developing their own players much like they did in the early 1900s. They could then sell the contracts of players to higher-level MiLB teams and even eventually to MLB teams.

But there are few MiLB operators with experience scouting, signing and building their own clubs. At the lower levels of the minors, the thought of spending $300,000-$500,000 in player salaries and benefits would be a daunting task for teams that are not currently making six figures in profits.

The risk for MiLB operators is that the value of their teams would decline dramatically without an affiliation with MLB. (MLB officials would note that in their opinion the current MiLB franchise valuations seem untethered to the realities of the teams’ balance sheets).

Other than operating on their own, MiLB’s biggest option would be to sue and see if it could get the courts to force MLB to operate under the current structure (or at least to allow them to recoup millions of dollars in damages).

Baseball as a whole would likely be drastically damaged by all the back-and-forth recriminations, court cases and confusion among fans (who in situations like this have often responded by blaming everyone and walking away). Fans would be one of the casualties of such a spat.

While that alone might seem nightmarish for baseball fans, it could get much worse. The current PBA expires just one year before the current Collective Bargaining Agreement between the MLB owners and the MLB Players Association (which carries with it the threat of a lockout or strike) expires. MLB has made it clear that it is taking a hardline with the players as well. Players and agents have been told to prepare for the possibility of a strike or a lockout.

So it is possible that in the span of just one calendar year the current structure of minor league baseball could be blown up and there could be a lockout or strike in Major League Baseball. Such a move would make the 1994-1995 strike seem modest.

At the end of such a scenario, MLB could run all aspects of professional baseball in the U.S. Many on the MiLB side believe that’s MLB’s long-term goal.

Baseball as a whole has been at this point once before. In 1990, MLB and MiLB threatened to walk away from each other, severing a working agreement that stretched back to the early 1900s. In the end, both sides stepped back from the precipice. Minor league owners were not happy with the significant increase in facility standards for their ballparks and the increased costs they would be asked to handle, but it was seen as vastly superior to the idea of going out on their own.

That PBA agreed to at the end of 1990 set the stage for the success of MiLB over the next three decades. New ballparks were built (to meet the facility standards) and teams learned to focus more on being affordable entertainment than pure baseball. Attendance skyrocketed and MiLB owners who had bought their teams for pocket change and the assumption of the team’s debts suddenly found themselves owning clubs worth millions of dollars. That 1990 PBA helped make some middle class MiLB owners into millionaires.

Minor League Baseball is now quite successful. The least-successful franchises are valued in the millions of dollars. The most successful franchises are worth tens of millions. But there is an underlying threat underpinning these negotiations—in some way, MLB views that value as illegitimate. They see it as artificial, and they see it as something that would immediately evaporate without the support of MLB. In its place could spring a new system, one in which MLB owners also own their teams’ minor league affiliates and the corresponding millions of dollars in franchise values.

And so here comes the threat—MLB could take their players and go their own way.

And here’s where some subtle tweaks made in that 1990 PBA could reshape the way this negotiation plays out and leaves a different environment than the one that existed then.

Before the 1990 PBA, MLB teams were not guaranteed one affiliate in each full-season minor league. Some teams may have two low Class A teams. Another may share a co-op team with another MLB team. And there were true independent teams in affiliated minor league baseball. They were even allowed to draft their own players in the MLB draft.

With a structure to acquire players, and owners and operators who had made teams work while paying their own players, MiLB had the knowledge that they could at least attempt to go their own way if negotiations truly fell apart. They had operators who had successfully done just that.

The 1990 PBA took away those opportunities. That agreement eliminated the provision that allowed MiLB teams to draft players. It codified that every MLB team would have one team at each full season level (which eliminated the co-op teams). And, in a bit of a surprise, it also laid the seeds for independent leagues to spring up.

From those PBA negotiations, Miles Wolff, owner of the Durham Bulls, and a few others began toying with the idea of operating a league separate from Minor League Baseball. In 1993, the Northern League and Frontier League opened, putting baseball in cities that could not have affiliated minor league baseball because they were within the territories of other teams or because the facilities did not meet PBA standards. The success of the Northern League that first year ensured the rise of independent leagues around the country.

From the start, MiLB viewed the indy leagues as rogue operators who were interlopers. They worried that they would damage the brand of Minor League Baseball (in fact, the National Association changed its name to Minor League Baseball to differentiate affiliated minor leagues from indy ball). They saw them as operators who did not abide by the rules that had governed the minors for decades.

For years, owners, general managers and independent league commissioners were held at an arm’s length at the Winter Meetings. They were the outsiders who were not to be let into the club.

That serves the purposes of MiLB well, but those same indy leagues provide MLB with leverage that did not exist in 1990. It’s worth noting that one of the low points in the MLB-MiLB relationship came on Feb. 26, 2019 when MLB and the independent Atlantic League sent out a joint press release announcing their partnership on experimental new rules for the Atlantic League. While such an agreement served MLB’s purposes, the fact that it did so without giving advance notice to MiLB was something that left MiLB officials stunned, perplexed and upset.

In San Diego at the Winter Meetings, the independent league commissioners for the American Association, Frontier League and Atlantic League were all quite publicly in attendance. They needed to be there—at the meetings they all sat down with MLB officials to discuss a wide variety of topics, including the possibility of deeper ties between MLB and the indy leagues.

And they and MLB came away happy from those meetings. Right now, MLB’s relationship with the Atlantic and Frontier leagues and the American Association are more cordial than they are with MiLB. MLB has floated the idea of having further cooperation. Working with the indy leagues provides insights into how to best run the proposed Dream League (a league for undrafted players). And it is possible that some cities that would lose affiliated baseball under MLB’s proposal would fit into independent leagues, thereby fulfilling MLB’s promise that it will work to ensure that all cities left without affiliated baseball under its proposal would continue to have baseball teams of some sort.

MiLB’s armageddon would represent an opportunity for the indy leagues. Clubs that are barely scraping right now would immediately become worth much more with MLB affiliations. And such a tie would also potentially bring with it the same salary subsidies that MiLB teams currently get—making the numbers work for an indy operator becomes much easier the moment the players’ salaries are handled by someone else.

To do so, MLB would be going back on some of its public proclamations as for what it needs in the next PBA. While some indy league stadiums that are every bit as nice as the finest affiliated stadiums, none is held to the current PBA standards. And there are plenty of indy league stadiums that would fail to meet the current facility standards, much less any upgraded ones—so the desire to ensure players would be playing in finer facilities would be set aside (at least temporarily) in such a plan.

All of this remains speculative, but it has gone from being absurdly unrealistic contingency to one that seems possible.

MLB and MiLB could once again back away from the precipice of blowing up a system that has worked advantageously for both parties for nearly 120 years. But as the final year of the current agreement arrives, the trust and mutuality that has laid at the foundation of their relationship is not there. Under former MLB commissioner Bud Selig, MLB director of minor league operations Jimmie Lee Solomon worked closely with MiLB. The two sides operated as partners, with the idea that baseball as a whole was more successful if both sides were successful. When the 1990 PBA came due for a renewal, it was done so quickly and quietly. There were no contentious negotiations in any of the PBA renewals since 1990.

Those deep ties do not exist now. There is no one working on this deal for MLB who has a close relationship to MiLB officials or MiLB owners. And on the MiLB side, there is a deep suspicion that MLB is looking for more of a subsidiary than a partner.

The two sides could still find their way to an agreement. But it now seems very possible that professional baseball as we know it may be replaced by something entirely different in the near future. And right now, the timeline to that new system could be measured in months, not years.