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Pat O'Conner Reflects On The Year That Was In Minor League Baseball

pat-oconner-2013

NATIONAL HARBOR, Md.—This past year was an eventful one for Minor League Baseball.

Most significantly, the realignment of the Carolina and California Leagues—an endeavor a decade in the works—finally went through, when High Desert and Bakersfield were contracted out of the Cal League. They were replaced in the Carolina League by Down East (Rangers, in Kinston, N.C.) and Buies Creek (Astros).

Hartford's move to the Eastern League was stymied by unending stadium issues, and the result was the second team this decade to spend an entire season on the road.

Minor league players continued their lawsuit against Minor League Baseball in search of higher wages, and the league responded by establishing a Political Action Committee to help fight that legislation and any others that should arise in the future.

The re-branding craze also reached a peak, and team names, with plenty of accompanying grumbling from executives and fans, got zanier and zanier.

Baseball America sat down with MiLB president Pat O'Conner at the Gaylord National hotel on the outskirts of Washington, D.C., to discuss those issues and several others facing the league now and in the future. Here's what he said.

BA: Minor League Baseball announced its political action committee yesterday. Can you be more specific with what you hope to accomplish with the PAC?

POC: Officially, it's the National Association of Professional Baseball Leagues Political Action Committee. The Federal Election Committee requires you have your formal name, and that is our formal, corporate name.

The aim is to create a politically based, legislative monitoring arm of Minor League Baseball that will allow us to monitor the legislative process at the federal, state and local levels and advocate for positions that are in our best interests when it's appropriate. It's not going to be an aggressive, big, go in and participate on every issue-type of political action committee.

What we will do—and it's truly in it's infancy—we will poll our clubs and monitor the legislative process to determine what's important to our clubs and see if there are opportunities to weigh in on legislation that's already in the system, or create legislation for the system that would enhance the ability of our clubs to continue to do what they do.

BA: One of the things that the PAC will have an obvious effect on is the current suit brought by the players against Minor League Baseball.

POC: Yeah, that's the one that's right in our face, but this goes beyond that. To be honest with you, the current situation, by the time we get our PAC up and running, what the current situation has shown us is the need for this so that when a situation like the current situation comes before us, we don't have to start from scratch. We have some momentum in the process. We've come to Washington—I've been at the NAPBL office since 1993—and we've come to Washington twice in 24 years.

Two things: The Washington we came to this time is different than the one before. And two, while we had contacts and access, when you have the reach that we had—86 Senators and 69 percent of the House of Representatives—are in our markets, states or regions, you know people. But we've never come with issues. And when you have to energize a legislative lobbying effort and start from scratch, it's a monumental task in this day and age. Yeah, it will help with the issue that's right in front of our face, and that's clarification of the Fair Labor Standards Act. Really, the PAC is meant to maintain the momentum we get out of this issue, not so much to address this issue.

Administratively, by the time we do the things that the Federal Election Committee requires us to do, I would like to think that it will be well after Jan. 20, when the new (Presidential) administration is in. And we're not going to wait on the PAC to address the issue that's right in front of us.

BA: Where are we now with that lawsuit?

POC: I understand, and I am not able to answer with great certainty, but on some summary reports, I think that the judge heard the case this week or last, so it is truly in the judge's chambers for a decision. They narrowed the scope of it, and as we understand it—or as my lawyers understand it—they're seeking group action status on the California League, and Arizona and Florida with respect to spring training, extended spring training and instructional league—so they've limited themselves to one state in each case.

What I understand about the law and group action status is that all the people in the group have to be the same. And the original suit was basically all of minor league baseball and, as you know, team to team, class to class, level to level and state to state, they're not all the same. So the judge said, if you want to pursue—and he pretty much gave them a road map—if you want to pursue, here's how you need to pursue to be compliant with the law.

BA: So a player who bounces from level to level isn't considered the same as one who stays in the same level all year?

POC: Again, I don't know the process well enough to tell you, but I think from a litigant's standpoint or the plaintiff's standpoint is: Let's win here. And then if they win I don't think you'll see the end of it.

BA: From what I can gather from people on both sides of the issue, the base salaries for minor league players haven't increased in some time. Is that correct.

POC: That's my understanding. Whatever it is, it's like $1,200 a month to start.

BA: Why hasn't it increased?

POC: That's a Major League Baseball decision. I don't know the answer, but one of the things about our relationship is we do not have a player relationship, an employer-employee relationship with the players. We honor that. There are certain things that they've asked us to carry out on their behalf—tobacco policy, things like that. The issue is, with respect to the players or the people that are their employees, it would be like me not being able to make decisions about your employment with Baseball America. I don't have standing to do that. That's not a problem. We understand our place in the food chain. We understand the relationship. So issues like that, I think that there's reason that I suggest you go ask (Major League Baseball).

BA: So what was your reaction when you're standing there at the presentation for the Joe Baumann Award and Dylan Cozens, in his speech, says that the $8,000 prize money he received was more than his salary for the season?

POC: I thought it was telling. I mean, it's telling. I don't think that has gone unnoticed. I'm very reluctant to speak to those employer-employee issues, but I thought it was telling. Clearly he knows what his W-2 is going to be and he wasn't lying to us.

BA: On a different topic, where are we with Hartford after the disaster of season there this past year?

POC: I would encourage you to get with (Hartford owner) Josh Solomon and (Eastern League president) Joe McEacharn for details, but the reports to me and personally and as part of other groups, they fully expect to play baseball there this April. A surety company has brought in new construction and workers and they're re-doing some things that we're done wrong and they're going to complete the work. I didn't go. I listened, Josh. When all that was going on, I knew Joe McEacharn was right on top of it, and I knew that if Joe McEacharn had a problem, he would call me. He didn't need me calling every week or two weeks or every month. It was unfortunate and, in hindsight, maybe not as unforeseen as it proved to be. The bottom line is: We survived it. The Colorado Rockies get a huge thanks for putting up with the situation, but to your main question, my understanding is that work is underway and they do expect to be ready to play in April.

BA: This isn't the first time in recent years that a new stadium hasn't been ready for play by Opening Day. Is there action that you can take that will make sure these kinds of things don't happen in the future?

POC: I mean, we approved the relocation, but I don't know that the action that I can take would avert the problem. Rather, it would just make them pay a penalty for it happening. And by that I mean when we approve a relocation and the construction date is May 1 and the league is comfortable with the team playing on the road for the first three weeks of the season, it's either giving up home days or playing at alternate sites, we approve all that. If that doesn't come to fruition, the only thing you can do is take punitive action and fine them. What are you going to do?

That's where this Hartford thing ended up coming out and in Biloxi, too. I think what you do, and we'd do it in the approval process, is ask how realistic is their timeline. I'm very much, Josh, running an organization on the basis of states' rights. I am not going to let some league—club or league—jeopardize the overarching relationship with Major League Baseball. I'll step in. In a lot of instances if a club has an issue and its league is OK with it, as long as it doesn't cross that threshold—and Biloxi did and certainly Colorado Springs did—I'm not inclined to get into league business. It's those 10 guys, if they're OK with it and it's in the rules—I may not like it—but if it sticks there then I'm not going to stick my nose into other people's business or just have control over every aspect of their life and business.

BA: Is that something the new PAC can help? Can you lobby people in certain areas to say there might be a penalty if these things don't get done in time.

POC: No. The political action committee is going to be used primarily at the federal levels to deal with issues. The rules on PAC spending are thick and very detailed. You can only give money to certain organizations. You can't give it to individuals. You can't collect money from anyone other than individuals. The short answer to your question is: No. The Board of Trustees is where you get that done or the membership to pass a National Association agreement, which is our Constitution. We could do a Constitutional amendment. The PAC's going to have nothing do with it. In fact, the PAC is not a part of Minor League Baseball. It's named after it, but it's a separate entity, it has a separate steering committee and has a separate set of constitutional bylaws, and that's by law. The Federal Election Committee requires that and has a separate board that's the steering committee. You have to file the reports. None of the money collected by the PAC will be spent on Minor League Baseball business. In fact, we are allowed to deduct some administrative fees but we have chosen to underwrite the administrative cost of the PAC and we are going to absorb that in the NA.

BA: Were minor league salaries addressed in the Collective Bargaining Agreement just ratified by Major League Baseball?

POC: I don't know. My experiences tell me no because minor league players are not part of the union. Just as I have no standing to influence their salary, neither does the union.

BA: When were you sure that the California-Carolina League realignment was going to happen this time?

POC: That project's 10 years in the making. I've tried for 10 years to get that done. In my opinion it was best for our relationship with MLB and it was best for our leagues. Maybe late August. There were a couple of things. We had the ninth team and city (Kinston, N.C.) early with full commitment. The 10th team and city just took some time. There was less doubt of the outcome and anxiousness over the required process—spending public funds—in North Carolina there is a very specific process and it just takes time. As we worked through that process there was a great deal of optimism that we were going to get through it, but optimism was not going to make it happen faster. In dealing with (Astros owner) Jim Crane, he was up front and honest. He wanted to participate, but was reluctant to participate until he'd worked his way through and the level of confidence that the stadium was going to get built it Fayetteville was up to a point. And that was very fair. That took, really, until the end of August.

We had, in anticipation of the deal, we had papered it up in advance and there were just a few things that we would add at the last minute. We circulated that to all affected parties. So it was able to move from 'OK, we're ready to go' to a closed deal in 30 days and we closed it at the end of September.

BA: How involved were you in finding that two-year temporary home in Buies Creek?

POC: Not much at all. What we did was, because it was a little bit more of a personal organizational decision, we worked very, very closely with the Astros on clearing territories. We helped with evaluating facilities. But under the circumstances I had suggested some markets that would fit geographically. Early on, I had asked both leagues to make two schedules or to be prepared to make two schedules—one with their original complement of teams and one with the adjusted complements of teams. They opted to hold off and then there came a point in time when my confidence level grew that I said, 'If you're only going to make one, California League make (an eight-team schedule). Carolina, if you're going to only make one, (make a 10-team schedule).' And then when it came time for temporary sites we had to put a city in for Fayetteville, or a block in the schedule for Fayetteville. Then what I tried to do was find opportunities for Houston to locate a temporary facility so I could take that schedule put Buies Creek into the Fayetteville slot and have the schedule still work. And the Astros went above and beyond to work with the system. I think we've got a really good system for them. In orchestrating this I tried to be as flexible as we could be and give the ultimate owner and operator and major league affiliate as much flexibility as possible.

BA: Was the split of the California and Carolina League All-Star Game part and parcel to the realignment process, or was that going to happen regardless?

POC: That decision was separate and actually prior to the complete, absolute affirmation of realignment. They were totally different things.

BA: So when the Buies Creek Astros move to Fayetteville, they're going to need a new name. Are you concerned that they're going to wind up with another name that is in the trend of the recent names over the last year or so—Rumble Ponies, Fire Frogs, Jumbo Shrimp, Baby Cakes?

POC: No, because of the people making the decision. They may make me look bad and do it, but when you talk about Jim Crane and Reid Ryan and Jeff Luhnow, you're talking about people who have a tremendous amount of respect for the game. Not that the others don't, but (those guys) are traditionalists and I think that you'll see a more conventional name come out of that process.

BA: Are you concerned overall with the trend that the team names have taken over the last year or so?

POC: I am, Josh, and I spent a lot of time this week talking about it this week with the principles, the stakeholders. I'm a states-rights governor. I govern from a position of, if you stay within the four corners of our master agreement, I give you as much latitude as you need. . . . So on this name-changing thing, they have an asset, it's a considerable asset, it's an intangible, intellectual property asset. I'm not interested in stripping their right to maximize their potential monetization and asset value of that asset. There is a line—and I don't know where it is, but I think we've at least pushed up to it if we haven't crossed it—where, in you exercising your rights, you harm your league and the other members. That's my concern. I went back and said, 'If those 10 guys are OK with whatever, I'm OK with it.

I've told some league presidents this week: 'Go to your league and talk about this openly.' Is there a league concern about this trend? I'll be honest with you: Names have come to me and they've come to me—and we will not allow offensive nicknames—and my reaction has been, 'You've got to be kidding me.' And (they wind up) on the top 25 most popular. So I have learned in 25 years that my taste in creativity is terrible. I'm not going to project my personal opinions on their business, but if their partners, if they feel that one of these names is across the line to the point that the enterprise of the league, its reputation, whatever, tangible or intangible, harms the league or they harm members in the league, then I think you have to have a conversation about some kind of guidelines or restrictions or governance.

To me, the one thing that I will give them credit for, is that all of the names that have been chosen—maybe not all of them that have been on the list—there is a back story. I've lived in Kissimmee, Fla. (where the Florida Fire Frogs will be based) and they have bullfrogs as big as this table. And when they bellow they become red. Is that the back story? I don't know, but I lived there for seven years and they're big. But Baby Cakes, I don't think many people outside of New Orleans know the story, but when you hear it, intellectually, it makes sense. The Baby Cake is the prize in a King Cake. That's fine. Now the interesting thing is, if you sit through a licensing committee meeting the early returns are that the Baby Cakes is playing wildly successful nationally and not very well in New Orleans where the story is known. The Jumbo Shrimp faced some scrutiny, but it has picked up and caught on.

BA: The Jumbo Shrimp was the outlier among the new names in that it did not involve a fan vote. Seeing what has resulted, then, would you dissuade teams from having fan votes to determine new names?

POC: If you take a fan vote, you're taking suggestions in what the final ballot looks like. There can be some filters. No, I'm not opposed to the fan vote. What I am is, I am watching, and concerned may be a little strong, but there is almost a concern that we're letting our imagination and creativity take us to places we may not want go.

BA: Is the situation with Staten Island, where a politician has come out publicly against the proposed set of names, something that goes to your point of maybe we've gone too far?

POC: The point it goes to is: As a states-rights organization, it's not my place to make value decisions for an organization unless it crosses over that area we talked about. If there is a political backlash, a local backlash to anything, I am willing, as long as it's not offensive, as long as it doesn't hurt third parties intentionally or consequently, that's for them to decide. If they cost themselves attendance, if they cost themselves political relationships, they need to evaluate that. My counsel to them is: Think all of this through when you do it. To that point, if politicians aren't happy and you've got to get your lease from a politician, then you need to manage that relationship. Sometimes I get calls or inquiries about process, but they have rights and I can't unilaterally and unitarily decide which right they get to exercise now. You can't do that in this organization. [Editor's Note: The Staten Island franchise decided not to rebrand after all.]

BA: Would you suggest to the league presidents that there might be some sort of approval process for all forthcoming names?

POC: That's part of the discussion we had and I've left it up them. We've talked about if that's an option. And I've weighed in on that. Again, when you have an enterprise of a league and it's made up of 10, 12, 16 partners, they are partners in their business. I think that partners should not screw each other and I think that partners should work cooperatively. The value of one partner is no greater than the others. I think that what we did this week is encouraging. We had the dialogue. If the league decides that monitoring, approving, reviewing is necessary, they have a constitution of bylaws that allows that. What a league can't do, is it can't create an amendment in violation of the National Association agreement. They can take any aspect of that agreement and make it more severe or make it more intense or make more requirements with that, but it can't be in conflict. And I encourage leagues by saying, 'You guys follow the rules and you run your league the way you want it run.'

BA: Before the season Minor League Baseball announced a sponsorship with eSurance and just recently you announced one with Bush's Baked Beans. When you get those types of deals, where does the money go?

POC: In all these national deals we have a subsidiary called Minor League Baseball Enterprises. Within that is this far overreaching national marketing campaign and the regional component to it. There is a formula but the bottom line is: That money goes back to the clubs. Money in, expenses, there was an investment-return component, and then payout to the clubs. So the money is filtered through us for national campaigns. It's like royalties. If I put your logo on a hat and I sell it, I can follow and track and give you credit for that royalty. If I put your logo, his logo, her logo on there, then I have to spread that out and it doesn't go to just those people. I can't assign it to anyone. It goes into unassigned. It's going to go back to the clubs, that's the short answer. There's gross revenue in, there's operating expenses, there's a payout formula that the teams and leagues are aware of, so the money's going to filter back down to them.

BA: How do you think this year went in Minor League Baseball, and what do you want to accomplish in 2017?

POC: I think we had a good year. We didn't have a great year. I really want to sit here with you next year and look at 2016 again and figure out if 2016 (and the drop in attendance) was as weather-influenced as I think it was? Was the downturn, as minimal as it was, the first of a trend or are we truly flattening out? So I think that at this time next year we'll sit and look and 2017 versus 2016. 2016, versus our last 15 years, was probably good at best. The thing is, in the next 60 to 90 days we'll have standard financial reports. And there are two sets of numbers that drive this, and that is an important number for financial results. . . . I think operationally, discount the Hartford thing, I think we had a good year. In the key metrics, attendance was off—again, I think it was weather-influenced. The good clubs are still doing good, the clubs that have struggled are doing a little better, so I think we'll be doing good there. I expect the financials to be solid. As an industry we don't have liquidity problems, we don't have solvency problems and we don't have debt problems. That's healthy.

I think it's critically important as we move forward to maintain relevance and perspective on our core, and we are an experiential business. Having said that, we need to add layers to the experience that deal with technology and the changing dynamic of the marketplace. Your generation does things differently than mine and we have to keep you and engage you and keep you engaged. I'm not a computer guy but I have really smart people who can talk to me and I feel really comfortable that we're trying. You chase technology no matter what business you're in unless you're making the stuff. In the half hour we've spent together I'm sure technology has changed twice. You're always chasing it.

As for goals for 2017, I think we need to move the needle on diversity. We need to get some traction at the club level and these meetings produced promising results with respect to the momentum that that initiative is getting. That's a long-term play. The benefit is a long-term play, but the action has to start immediately.

BA: Does that mean hiring a more diverse group of job-seekers?

POC: What it means is your club has to look from the inside out like the marketplace looks at you. Your market is different than my market. You don't have to hire to my market specs, you have to hire to yours. We give every club what their demographics are and suggest to them that this is what their community is made of. If you want to penetrate your community 100 percent, it would behoove you to look like that from the inside out so when you interface with your community you're speaking to them and communicating with them and interacting with them in a way that they're familiar with. It's comfortable for them because it's like them and not unlike them.

BA: So because you're a states-rights governor, this is not a quota?

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POC: One thing that you have never heard, and I've been doing this particular initiative since 2008 or 2009, you will never hear a quota or mandate on this subject. I don't believe in that. I believe in the initiative and I think it's in everybody's best interest do it because it's what's going to happen. Do you realize that half of the babies in this country, one or both parents are of color, and by 2050 there will be more people of color in this country than white? Now, not one specific minority group is going to be 50 percent, but white will be 50 percent or less of the total population. That's not a social statement. That's not a criticism or complaint. That's a fact. So if we're not penetrating Latin American, Chicano, Pacific Rim, African-American, what's going to happen is we're going to be doing business in a smaller and smaller sector of our community. We have about 25 percent of our clubs right now that operate in markets that 50 percent or less of the population is white. That's the initiative in a nutshell. It's not a social pitch, it's not a moral pitch. It's a business pitch. So I think we need to move forward on that. We need to continue to build out our enterprise's model, and we are making great gains to participate at the highest level of corporate sponsorship with major players.

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