The current MLB and minor league cooperative contract has expired. MLB is making a dramatic move on how it treats the minor league system.
In the past, the minor leagues were independent ball clubs. Minor league teams created their own leagues. Those leagues then made agreements with MLB in regard to player contracts. MLB teams draft and sign players to contracts. Those contracts are "assigned" to a minor a league club that has a working developmental agreement. Major league teams helps pay certain costs and provides staff such as head coach and pitching staff to minor league teams. Minor league teams were responsible for scheduling games, paying players, and coaching them for promotion. But not all players on a minor league roster have a major league agreement. During a season, a minor league team can "sell" or assign their player contracts to their affiliate major league team. In the past, this is how many smaller minor league owners made a good deal of money for their teams.
In 2020, the minor league system, relying on attendance as a major revenue source, shut down.
As a result, MLB teams decided to create 60 man squads (40 man roster plus another 20 players). The teams split them into an active roster (for most of the season) and a training squad at a separate location to fill in for injured players. It did provide top prospects the opportunity to reach the major leagues quicker than the normal path.
The MLB split squad concept worked well. We thought that MLB may decide to eliminate the minor league system in favor of a modified in-house training squad. But MLB had a bigger fish to catch.
MLB had been hinting that it wanted to eliminate at least 40 minor league teams from their affiliate status with major league clubs. Minor league baseball teams, especially the lower classes in small rural markets, were upset by that proposal.
MLBTR reports that changes for MLB and MiLB’s working partnership have been moved forward. The agreement between the two entities recently expired, and MLB now plans to bring the minor league system under their governance. MLB took a big step towards accomplishing their goals this week.
MLB released a statement announcing their plans to transplant
the minor league offices to MLB’s headquarters in New York City, per
Bill Shaikin of the Los Angeles Times.
Shaikin also notes that MLB is now referring to minor league clubs as
“licensed affiliates.”
By joining the offices to MLB headquarters, the minors are now a branch of MLB, notes Maury Brown of Forbes. Part of this process is the hiring of Peter Freund and Trinity Sports Consultants to help MLB and their new “licensed affiliates” transition. Freund owns minor league clubs at three levels, and he is a partner with the Yankees. His broader responsibilities will be in spearheading MLB’s efforts to build a cohesive minor league system and “implementing a modern approach to player development,” per MLB’s statement.
It would seem that the old independent clubs are now being turned into minor league "MLB franchises" like your local McDonald's or Burger King. If true, MLB (and/or MLB clubs) will get to set standards and practices that all minor league teams must follow.
MLB has taken a lot of heat for their movement in this direction, specifically for insufficient minor league players salaries and the cutting of some 40 teams from the minor league system. Minor league ballplayers recently won early round of class action litigation when the Supreme Court denied MLB’s appeal, thereby granting players to move forward on their labor payroll lawsuit against Major League Baseball. Basically any minor league player since 2009 can now join the suit in suing MLB for violation of minimum wage laws. This is one of the many issues that MLB hopes to address over the coming months.
But one thing is certain: the traditional minor league system is going to drastically changed by MLB.