December 11, 2020

LICENSE TO KILL

 Brew Crew Ball posts:

It’s been a while since we’ve seen a minor league baseball game. The 2020 MiLB season was lost because of the ongoing COVID-19 pandemic, and the status of 2021 is still uncertain as the pandemic continues. However, planning for the minor leagues is still underway. Earlier this year, MLB announced their decision to take control of the minor leagues and restructure them. Small pieces of information have been coming out since then, but nothing substantial has been confirmed yet. That could come as early as next week, as J.J. Cooper of Baseball America reports that MLB is nearing their decision on the minor league teams.

Though the full details are not known, the structure of the leagues appears to be set. There will be the same four top levels, with leagues in each level. Here’s how the Baseball America report breaks down the leagues:

  • Triple-A: East and West
  • Double-A: Central, South, and Northeast
  • High-A: Mid-Atlantic, Midwest, Northwest
  • Low-A: California, Florida, Carolina/South Atlantic

News from Fresno situation confirms major changes will happen. Fresno was a AAA team. Under MLB's plan, it was told to change to Class A or fold. Fresno, like most other minor league cities, has a municipal ball park and associated public debt. No team, no lease payments. The strong arm tactic worked. In addition, Fresno and the team owner had to sign off on a legal waiver of claims against MLB as part of the deal. This foretells there will be litigation on the horizon.

Part of the agreement reported on the Fresno deal was that the Fresno team could apply "for a license" to operate a minor league team from MLB. This is another significant change. In the past, each minor league team was an independent business entity or organization. It has "affiliate" agreements in which major league teams would pay money and assign player contracts to the clubs. Players without a major league contract could be bought and sold.

Major league owners through the league somehow believe they "own" the sport. To "license" intellectual property means you own a brand, a product or a service. Baseball itself is in the public domain. But to "license" a team is different than the first rumor that MLB would "franchise" minor league teams. A franchise is a security regulated by state laws. A license agreement is not; it is controlled under contract law. Even though MLB can put in restrictions in these new license agreements, new club owners probably will have little recourse.

Minor League players already have a class action pending against MLB for unpaid wages under federal law. MLB's new minor league plan would eliminate 40 clubs and 1000 players. The cut clubs and players will not be happy with MLB's strong arm tactics. The cities and towns affected by the loss of their minor league teams will be upset. Anyone with a long term view of the sport needs to be troubled because minor league baseball is still one of the major ways to hook young kids into being baseball fans.

It is clear that MLB owners want to save money. They do not think they are getting enough value for the millions spent on minor league development system. It is surprising that the owners finished the short 2020 season with a 35 man taxi squad/minor league practice team. That model makes one wonder if that may be the next minor league contraction (similar to the small NBA development league).