The Future of the Minors

What do we know about current MLB/MiLB negotiations

Back when I first started There R Giants, in my very first post I wrote this about the future of player development:

There are many outside of the industry (and now inside it as well) who believe that prospect development is an area that is ripe for disruption and improvement and for them this Coronavirus-year may well provide an unlooked-for laboratory. Will teams be able to work with players during the year with virtual, remote development tools that work biomechanical or pitch shaping improvements during work stoppage? And if they do, what might the result of that work be when minor league games do start back up. Will we recognize what comes back to us?

What might that transformation look like? Will short season ball still exist? Will the franchises we’ve followed for years still be in the fold? Or will some new experiments in player development begin that undermine the minor league landscape many of us love dearly — even while we may admit the shaggy nature of that landscape?

I haven’t returned much to this crucial story playing out in the background of the baseball’s 2020 drama, but Baseball America’s J.J. Cooper has been doing the journalism work of his life (and the best baseball journalism of the year for my money) pumping out an amazing amount of fascinating reporting on the topic. If you have time, I highly recommend you read — and listen — to all of J.J.’s coverage of this story. But since this is nominally a minor league blog (though the original notion of a new location for Minor Lines as yet to come to fruition) — I think the time has come for me to try to summarize some of what J.J. has been reporting.

As you know, the Professional Baseball Agreement, which governs the working relationship of Major and Minor League Baseball, is set to expire on September 30 of this year. This is not unusual — MLB and MiLB have negotiated many new PBAs, some extremely contentious, going back more than a century. And their relationship has changed significantly over that time. Minor League Baseball has been an independent entity since its origin back in 1903, and for a considerable amount of time they were almost entirely independent, scouting and signing their own players, owning the rights to those players and paying them themselves. As I touched upon in last week’s post about Wartime baseball, financial difficulties in the 1960s fundamentally changed the relationship: that is when MLB began paying a portion of players’ salaries and the modern affiliate system was created. It wasn’t until the very difficult 1990 PBA negotiations that MLB took on 100% of player salaries (made up for with an increase percentage of MiLB gate receipts)

I say all this as backstory because it’s important to recognize that this relationship has always been an evolving one. There’s never been one period where it was more static or authentic or more “right” than any other time. And like all business arrangements there have long been stresses between unequal partners that play out in different ways.

In preparation for this PBA negotiation, MLB created a vision of the future as they would like it to be, a vision which eliminated about 25% of affiliated teams (to be replaced with other forms of ball, as we’ll talk about in a minute) and most short-season leagues. Specifically, MLB had several significant issues they were looking to fix:

  • minor leagues are far too spread out and the travel demands on young players are brutal;

  • there is an uneven spread of teams geographically — specifically there are more AAA teams in the western US than there are MLB teams and east coast MLB teams get stuck with unwanted west coast affiliates which make it hard to call up players in a timely manner;

  • every two years the “affiliate shuffle” puts teams in scramble mode trying to avoid the worst of the above two elements; and

  • facilities, particularly at lower levels, are woefully insufficient to meet modern player development needs (e.g., larger coaching staffs, much greater video/broad band based technology, greater emphasis on nutrition and physical training).

As I’ve noted before, these are all very legitimate concerns about the current minor league setup and we’ve been seeing teams take some of these issues into their own hands in recent years with more major league teams buying (or buying into) their own affiliates and constructing their own facilities. This for instance, led to the elimination of the two least desirable franchises in the country when Boston and Milwaukee each purchased a new Carolina League team for themselves and the California League finally contracted the Bakersfield and High Desert teams.

Meanwhile the rise of Driveline and other hitter and pitcher “laboratories” has made the insufficiency of many minor league facilities (many of which still look almost exactly like the clubhouse scenes in Bull Durham) starkly obvious. While the stresses that the 2020 season is putting on player development officials makes it obvious that teams need some form of Minor League play to continue in the future (to answer Travis Sawchik’s question: YES, we need the minor leagues), that form will have to involve facilities that allow the kind of non-gametime development that is proving so successful to the Driveline model.

Overall, the desire on MLB’s part is to bring models of efficiency to the entire system: reorganizing leagues into smaller groupings; providing eight AAA, A+, and A leagues in the western portion of the US to coincide with MLB alignment; get clubhouses into the 21st century with HawkEye, Rapsodo, indoor batting cages, large coaching offices, gourmet kitchens, etc.

This also fits within the parameters of a major Rob Manfred strategic priority called “One Baseball” which sees MLB operating as the overseer or decision-maker of virtually all levels of baseball (professional, semi-pro, and amateur) in the country. This would allow MLB to put their marketing, advertising, and financial might to advantageous, synergistic use, particularly bringing the benefits of Advanced Media to minor league baseball and even places like the Cape Cod League. (Counterpoint: do you want an organization that can’t manage to produce a consistent baseball, or admit that they don’t, to have such monopolistic decision-making authority over all levels of the game?)

A major bone of contention in this proposal, however, revolves around affiliate status. MLB has, from the beginning of these negotiations, promised that all communities that currently have minor league baseball will continue to have baseball in their community. Their proposal is that some form of independent league, or showcase league for undrafted college players (the so-called “Dream League”), or summer wood bat leagues (like the Cape Cod League) will take the place of affiliates for those communities. MLB’s view is that for fans in small town America who enjoy going to see their local teams play, the affiliate status isn’t important — they just want an enjoyable family night out in the summertime air. As long as baseball is being played the customers will be satisfied regardless of affiliate status. And yes, I would say that fans at Cape Cod League games are no less satisfied with their night out than fans at a Frederick Keys game in my experience.

However, from the point of view of Minor League Owners the difference between being a major league affiliate and being something else makes an extreme difference in the value of their asset. MiLB owners bought into their teams at a price point that was set by that affiliate status, and to take that affiliate status away is — in the owners’ viewpoint — just picking their pockets. It is stripping them of their wealth. MLB believes that the asset value that comes from being an affiliate was not created by the MiLB owners in the first place, and therefore MiLB owners are essentially skating on value that rightly belongs to MLB. This is, I believe, the crux of the negotiations argument: who owns the “affiliate value?”

However, Minor League Baseball comes to the negotiations with some real difficulties. In the first place, they obviously don’t have much leverage in negotiations with MLB who almost completely controls their product. While MLB would be in an unenviable position if they had to find fields and facilities on which to play (note the “bubble” problems currently), Minor League Baseball simply has no product if the players are taken away.

Beyond that obvious leverage issue, Minor League Baseball also suffers from an issue of internal divisions. Not all Minor League owners want exactly the same things and not all Minor League owners would be effected equally by MLB’s proposal. As Cooper has reported throughout, there is a large contingent of Minor League owners who agree with MLB that having minor league baseball under MLB’s umbrella — rather than independently operated out of MiLB offices in Florida — would make a lot of sense and quite possibly be better business. Also, owners of A ball teams, who live in much more fragile economic models, have more to fear from MLB’s proposal than their more stable AAA colleagues.

And that brings us to last week’s bombshell. Though no formal proposals have been traded between the two parties since last April (MLB having other things to focus on), negotiating teams had been working their way through some points of agreement for a future structure. One of those points was the elimination of Minor League Baseball as a separate entity — the St. Petersburg office and President Pat O’Conner’s position would be eliminated and minor league ball would be folded under MLB’s umbrella fully for the future.

This made last week’s news that MiLB had disbanded their former negotiating team and replaced them with one that was much closer aligned with O’Conner so sensational. O’Conner himself obviously has his own incentives and priorities in these negotiations that don’t necessarily align with all the Minor League owners. He was, naturally, incensed that after doing so much work in Congress two years ago to get the spectacularly ironically named “Save America’s Past Time Act” approved, MLB would turn around and stab him in the back. As O’Conner said to Evan Drelich last winter when negotiations broke out into a bitter public spat:

“One of the premises, and one of the well-known premises, was if we don’t get this legislation for Major League Baseball, they’re either going to cut teams, or they’re going to come after us for more money. And I’ll be doggone if we don’t get the legislation, and they’re doing both.”

And on top of that they came for O’Conner’s job. The new negotiating committee, which did submit a proposal to MLB last week, seems to be prioritizing maintaining some level of independence for the entity known as “Minor League Baseball.” By all accounts this is, however, a non-starter for MLB as is the preservation of O’Conner’s position. And MiLB’s negotiating position suffered further damage when, as Cooper found out, many minor league owners called MLB offices and specifically distanced themselves from the new negotiating committee, saying it did not speak for, or to, their interests.

MLB would seem to have an incentive then, to simply lay back and let the internecine struggles inside Minor League Baseball work themselves out. However, with the clock ticking on expiration of the PBA (and many MANY complicated details to work out) that strategy could inevitably lead to time running out on negotiations. As rule of thumb goes, most negotiations operate on the 80-20 basis: about 80% of the things that need to be negotiated are non-contentious and 20% are really difficult. The key is to hammer out the 80% first, quickly and efficiently, so there’s a basis on which to discuss the 20%. However if (as happened with this summer’s negotiations to restart the game) you get stuck on the 20% without ever addressing the 80% of relatively low-hanging fruit, you end up either stalled or quickly trying to throw together a huge amount of complicated logistical details in a rush.

So where do we go from here? With just about six weeks left until the PBA expires it would seem there are a few paths which events could take:

  1. MLB could bend to MiLB’s desire to maintain some independent governance as a sort of eyewash, and work with the new team on its other priority issues. This seems highly unlikely to me.

  2. MLB could tell the new negotiating team that independence — and Pat O’Conner’s continued position — are an absolute non-starter and refuse to negotiate except on terms that they and the previous team had been discussing previous to last week. This would likely force an internal fight forcing MiLB to back away from its new strategy and take what they can get. A much more likely outcome.

  3. MLB lets the agreement expire, makes no attempt to negotiate a new one and instead signals a willingness to work with individual ownership groups to join them in partnership on a new “One Baseball” based status.

In that final scenario, MLB would simply say: “We’re open for business. If you want to be a minor league affiliate next year and going forward, we’re currently accepting applications.” This strategy would essentially create the system they were looking for as facts on the ground, without going through the trouble to negotiate a new agreement. They would cherry pick the ownership groups and facilities they want, refuse the ones they don’t and put together new groupings of smaller, more tightly clustered leagues that corresponded better to MLB’s geography. Unlike the old two-year affiliate contracts, these relationships would likely be much longer based — ten years perhaps.

MLB has been doing its homework internally on this issue for the last year. They’ve asked all 30 teams to report on what they’re looking for in affiliates, what their needs are in terms of facilities and geographic spread, and what teams/owners/towns they do and don’t want to be in a relationship with. So MLB has in mind the end result they want and could probably force something like that result into being whichever of the paths above they choose.

But if they go in the direction of #3, we should probably get the 120 number out of our minds. Between minor league owners current financial distress and the simple complications of geography, it’s entirely possible that the ultimate number arrived at won’t be 120 affiliates. Teams might be able to split affiliates (as used to be quite common, and teams currently do with their spring training complexes) to get the number down lower. And there’s even some concern (on Minor League owners’ part) that MLB could choose to consolidate A ball levels and end up with 90 teams instead (though Cooper has heard nothing from MLB to suggest this). It bears repeating here that MLB has been consistent in promising that some form of baseball will not leave any of the towns that currently have minor league teams.

Whatever is coming I do think we will see some version of minor league baseball next year, but one that is much closer to MLB’s “one baseball” vision than anything we’ve seen before. There are going to be much smaller leagues and I suspect that at the very least we will end up with eight-team AAA and A ball leagues west of the Rockies that conform to MLB’s western divisions.

From the Giants perspective, my guess would be that their relationships with Sacramento and San Jose will both continue. Both are close and convenient. Sacramento has high-quality facilities and a great ownership group. San Jose’s facilities are some of the oldest in baseball but the Giants are also part owner of the team and might start to look to put some money into those facilities (especially if the A’s stadium situation becomes more settled).

The Giants’ relationship with their three other affiliates is much more questionable, however. Of the three, I would guess the Richmond connection is possibly more stable — while it’s on the far side of the country there are no AA teams west of Texas and many of the Texas League teams are partially owned by major league clubs already. Richmond’s management group is extremely strong and is making some progress towards new facilities at some point (though the current economic climate has no doubt damaged that possibility once again). And the east coast location has actually proved to be a benefit to the Giants in years past when they needed quick manpower replacement while on East Coast trips.

Augusta I believe the Giants would like to continue with — they were involved at some level in plans for the construction of the new facility and, as Kevin Cunningham noted on Pod-2, the Giants do have housing for players in Augusta. However, if MLB wants to re-align levels, they may desire to craft an A ball league out of some of the current Northwest League locations, possibly forcing the Giants into a West Coast-based A ball club. It’s unclear whether that affiliate would be Salem-Keizer who was on the original 120 team cut list (though almost everything about that original list has been affected by the loss of minor league baseball this year and the financial distress that has caused). Volcano Stadium is one of the facilities that does not meet modern requirements so if that relationship were to continue, much investment would need to be put into the now 25-year-old stadium complex.

There are still a lot of directions this story can go — and the twists and turns seem to be increasing as we head into the final reel. Stay tuned! There’s no telling exactly where we’re going to end up!

Leave a comment

This Date in History

1963: The frustrated Giants sent Gaylord Perry back down to AAA Tacoma, but he pitched his way back with just one appearance. The Giants had yet to settle on a role for the talented 24 year old who they had signed for $90,000 as an amateur. After starting out in the Giants rotation in April of ‘62, Perry had quickly been moved to the bullpen and then sent back to AAA in June. 1963 had seen much of the same, with Perry acting as a swing man, bouncing back and forth between a handful of starts and a middle-relief long man. But he hadn’t had much success in either role. Finally they return Perry to Tacoma once again, but his lone start on Aug. 12 resulted in a three-hit, complete game victory against Salt Lake City. That would be his final minor league game ever, as the Giants brought him back up, gave him one start (a five inning effort in a loss) and then once again returned him to the bullpen. It would take two more seasons before Perry, at 27 years old, would finally work his way into the rotation for good. In 1966 as a full time starter he’d go 21-8 with a 2.99 ERA, beginning his journey towards Cooperstown.

1967: OF Bernie Williams concluded a scorching hot week with a two homer performance for the Medford Giants. The 18 year old had been drafted out of the ranks of Oakland’s fantastic High School leagues that June. In early August, his family drove up to visit and that touch of familiarity helped Williams kick off an incredible week — over six games he hit 7 HRs and knocked in an astonishing 21 RBIs. Williams would end his pro debut blasting 14 HR and slugging .502 to help lead Medford to the Northwest League Title. Amazingly, the 14 HRs he hit as an 18 year old in short season ball would be his career high, though he would work his way up to a major league career, playing in 88 games with the Giants between 1970-72, hitting .197.

1980: How about a little non-Giants history! On this date in history Lodi speedster Alan Wiggins broke the all time California League record with his 96th stolen base of the season. With just three weeks remaining he then set his eyes on the all time minor league record of 116, set by Alan Lewis in the Florida State League in 1966. Wiggins run at the record was successful, as he stole 120 bases in just 135 games. His glory was short-lived though, as Vince Coleman would burn through 145 SB in the Sally League in 1983. Coleman himself was the winner of a spirited cross-country competition that year, as Donell Nixon managed just one fewer — 144 SB with Bakersfield. Nixon had to be satisfied with taking Wiggins’ Cal League record. Coleman’s record would stand for 29 years until Billy Hamilton stole 155 bases in 2012 — the highest total ever recorded in organized baseball.

And hey, as a side benefit of researching the above nugget, here’s a shout out to Giants’ manager Gabe Kapler, who was the last player to produce more RBIs than games in a minor league season. In his amazing AA campaign, when he hit .322/.393/.583 for the Jacksonville Suns, Kapler amassed 146 RBIs in 139 games — the second highest RBI total since the reorganization of the minor leagues in 1963. Nice going, Gabe!

Have a great day — here’s hoping we all meet up at a minor league stadium someday soon!