The Rangers sale is a "trainwreck"

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That’s the viewpoint of someone associated with the group of creditors meeting with prospective Rangers’ owners Chuck Greenberg and Nolan Ryan in New York tomorrow in an attempt to iron out their differences regarding the team’s sale. It’s an ominous sign with respect to something that everyone is assuming is a done deal.

As you’ll recall, the creditors are led by a hedge fund called Monarch Alternative Capital, which bought up a bunch of Hicks Sports’ Group’s debt when it nearly defaulted on its obligations last summer.  The creditors have to sign off on the tentative agreement between Hicks and Greenberg/Ryan, and from the sound of it, they don’t have a huge incentive to do so.  According to the article:

The key issues, the sources said, are that while the sale has an
announced price of $570M, there is only $390M of cash changing hands,
with the difference assumed liabilities. And of that the banks would
only get $250M, sources said. Before they get paid, according to the
deal, Hicks would be paid for the real estate around the ballpark, MLB
must be paid for loans it forwarded the team, and Rangers investment
bankers, Merrill Lynch and Raine get paid too.

That’s right: Tom Hicks has helped broker a deal in which he personally gets paid before the people from whom his spendthrift ownership group had to borrow in order to make ends meet last year. And of course, Hicks himself is part of the new ownership group too. The result: an angry group of creditors is worried that they’re going to only get pennies on the dollar — “We will be better off in bankruptcy court,” a source says — and may very well tell Greenberg, Ryan and Hicks to go back to the drawing board. If that happens, you have to figure that Jim Crane and Dennis Gilbert, who were reported to have better bids than Greenberg — would come back into play.

In December I reported that there were people around Major League Baseball who were worried about this deal coming together.  Those worries were brushed off at the time.  Based on what we’re hearing today, I have this feeling that they’re back.

Minor League Baseball teams sold over $70 million in merchandise in 2017

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Every so often here, we discuss the criminally low pay of Minor League Baseball players. Most of them make less than $7,500 a year, which includes the regular season as well as spring training, playoffs, and offseason training. The abysmal pay forces minor leaguers to eat unhealthy food, live in cramped quarters, and forego consistent, quality sleep, among other things.

What makes this situation worse is that Minor League Baseball is a huge money-maker for their parent teams in Major League Baseball. Josh Norris of Baseball America reported yesterday that Minor League Baseball teams sold $70.8 million in merchandise in 2017. That represented a 3.6 percent increase over the previous record set in 2016. This is just merchandise. Now think about concession and ticket sales.

Minor League Baseball COO Brian Earle said, “Minor League Baseball team names and logos continue to be among the most popular in all of professional sports, and our teams have made promoting their brand a priority for their respective organizations. The teams have done a tremendous job of using their team marks and logos to build an identity that is appealing to fans not just locally, but in some cases, globally as well.”

You may recall that Major League Baseball had been lobbying Congress to pass legislation exempting minor league players from the Fair Labor Standards Act of 1938. Doing so classified baseball players as seasonal workers, which means they are not entitled to minimum wage and overtime pay. That legislation passed earlier this year. Minor League Baseball generates profits hand over fist and it is now legally protected from having to share that with the labor that produced it.

Many points of divergence led us to this point, but the question is how do we change it? Minor leaguers are routinely taken advantage of because they don’t have a union. Compare the minors in baseball to the minors in hockey, where minor leaguers have a union. As SB Nation’s Marc Normandin pointed out last month, the minimum salary for American Hockey League players is $45,000 and the average salary is $118,000. They receive a playoff share of around $20,000, and receive health insurance that covers themselves as well as their families. Furthermore, the minor league hockey players’ per diem is $74, about three times as much as minor league baseball players’ per diem of $25.

Major League Baseball and its 30 teams have shown no inclination towards treating minor league players simply out of moral obligation or good will, so the minor leaguers need union coverage to force their conditions to improve. This could be as simple as the MLBPA expanding its coverage to the minor leagues because, after all, some minor leaguers do become major leaguers, right? Or the minor leaguers could themselves create a union. It’s easy to say, but tougher to do, which is why they still don’t have a union.

At any rate, every fan of baseball should be enraged when they read that Minor League Baseball keeps setting records year after year when it comes to selling hats and t-shirts, then refuses to share any of that wealth with the labor responsible for it. It’s morally reprehensible.