As Craig mentioned earlier, a new law is likely to pass as part of a Republican-led spending bill that amends language in the Fair Labor Standards Act of 1938. The result of that will make minor leaguers exempt from being owed minimum wage and overtime pay, meaning that teams can continue to pay them very little. Minor League Baseball and Major League Baseball lobbied Congress to do this, as MiLB president Pat O’Conner readily admits, as Josh Norris of Baseball America reports.
Why all this effort? In 2014, former minor leaguer Aaron Senne filed a lawsuit along with Michael Liberto and Oliver Odle, alleging that the minor leagues violated state and federal minimum wage laws. In many cases, minor leaguers earn less than $10,000 a year and only a small percentage of players can be buoyed by their signing bonuses.
O’Conner said, “When the lawsuit came out two or three years ago, we started to put a strategy together. We’ve been lobbying Congress since June of 2016. … We had 94 people in Washington in June of 2016 walking the halls, talking to the elected officials.
Here’s what that lobbying effort looks like in graph form, via Maury Brown of Forbes:
O’Conner goes on, as he usually does, making disingenuous arguments to justify paying minor leaguers unlivable wages. He said, “To me, it’s fairly simple. If Major League Baseball experiences a tremendous increase in its cost of labor, it will reduce the number of players it offers to Minor League Baseball, or it will come to Minor League Baseball and expect us to pay a portion of that increase in cost. Either one of those are catastrophic to our business model.”
O’Conner said, “If the cost of that talent is doubled or tripled, which could happen under an FLSA basis, MLB is not going to pay that much money for the talent. They’re not going to pay. They’re going to do one of two things: They’re going to say, ‘If 160 (minor league) teams is going to cost (this much), we’re just going to cut down on the number of teams. We’re not going to pay for 160. We’ll pay for 80. We’ll pay for 100.’ Then the other 60 or 80 that are left without players, if they want to stay in business, they’re going to have to pay for their own players. … You might lose half of the (league). You don’t know. You might lose leagues. You might lose cities in leagues. Nobody knows, but the fact of the matter is one of two things is very likely to happen: MLB is either going to cut back on the number of teams it provides, or (MiLB) is going to have to start paying salaries.”
Major league teams are responsible for paying the salaries of the players on their minor league affiliates. Minor league teams are only responsible for paying their own employees, including front office personnel as well as ticket-takers, ushers, concession stand workers, and such. But we’ve done the math on this before and giving minor leaguers a livable wage is a drop in the bucket to an industry that saw over $10 billion in revenue last year. The average Major League Baseball team is valued at $1.54 billion, according to Forbes. TV deals and MLB Advanced Media have a lot to do with that.
Let’s go over the math again just so we’re all on the same page. Most teams have six affiliates; some have seven or eight. Players will go up and down through the minors, so the teams are usually dealing with 50 or so players in any given year, sometimes in excess. But generally speaking each team has a 25-man roster. Six minor league teams at 25 players each comes out to 150 players. Guaranteeing them a $30,000 salary comes out to $4.5 million in total for six teams. Obviously, the total is slightly more for teams with more affiliates, and if you want to guarantee them a higher salary. $4.5 million is the cost of a free agent reliever. Fernando Rodney, Craig Stammen, and Jared Hughes signed contracts for exactly that amount this offseason. For the cost of a free agent reliever, every team could guarantee each of its minor league players a livable wage so they could pay the bills. $30,000 in the grand scheme of things still isn’t much, but in many cases, it would represent a pay increase of four or five times what they’re getting now. Teams valued north of $1 billion can easily afford an additional $4.5 million each year.
Furthermore, Matt Winkelman of Crashburn Alley brings up a good point:
As mentioned on MiLB.com, the Tampa Yankees, Springfield Cardinals, and Gwinnett Braves are examples of teams owned by their major league parent team. Which makes O’Conner’s fear-mongering all the more disingenuous.
Major League teams wouldn’t pass on the cost to their minor league affiliates not only because they might already own their affiliates, but also because they would be reaping the benefits of paying their players more. Being able to study film at home instead of working the graveyard shift as an Uber driver would, on the whole, make their players better. Being able to afford gas would allow them to more easily shop for fresh fruit and vegetables instead of constantly walking a block to a pizza shop or McDonald’s. Healthier players are better than unhealthier players, right? Being able to afford a quality mattress, instead of sleeping on a couch, would allow players to sleep better. Better sleep means better production in every industry. Better players means a better hit rate on draft picks, which means more talent making its way to the majors that is cost-controlled for six years. As we’ve seen with the evolution of free agency, teams vastly prefer cultivating their own talent rather than paying a premium for it on the free agent market.
What this comes down to is pure, simple avarice. It’s short-sighted greed on the part of team owners and the people that work for them. Their public justification falls flat and were they capable of feeling shame, that’s what they should be feeling. Beyond their labor, minor league players are the product being marketed to fans. Without them, the owners have nothing.