Untangling a Minor League Mess, Part II

Earlier this week, we discussed the principal bone of contention between Major League Baseball and Minor League Baseball regarding MLB’s proposed contraction plan. MLB wishes to, among other things, transfer more control and money away from minor league baseball and eliminate short-season baseball. While they have tried to make their case that the measure is not a cost-saving one, that case isn’t particularly persuasive, as discussed in Part I of this series.

But while contraction is a cost-saving measure, that doesn’t mean major league teams don’t have a more efficient way of producing good major league players than in the current system, and that argument deserves to be assessed on its own merits. David Laurila recently talked to some MLB executives who explained some of their thoughts on the potential changes, and in a piece at FiveThirtyEight, Travis Sawchik laid out the potential benefits of fewer minor league teams while including keeping the level of competition higher, preventing teams from preying on players with little chance of reaching the majors and putting players closer to spring training sites where the quality of facilities is better and the coaching is more concentrated. (It’s worth noting that MLB hasn’t actually done a very good job of making that argument.)

The following is from an MLB response to MiLB detailing MLB’s objectives in contracting the minor leagues:

We have provided MiLB our Clubs’ reasoning for the elimination of short-season baseball numerous times, and “creative solutions” to retain baseball in every community, but MiLB’s public messaging has consistently been that MLB desires to restructure short-season baseball for “cost savings objectives.” While we recognize that such messaging may play well publicly, it is absolutely not true. MLB has three objectives that affect short-season baseball, none of which is premised on cost savings. First, as we have previously explained, our Clubs believe that the First Year Player Draft has too many rounds (40 compared with 7 for the NFL and NHL), with hundreds of players drafted each year that have an extremely low chance of making the Major Leagues (only 18% of all drafted players reach the Major Leagues for at least one day; 8% accumulate 3 years of service; and those figures fall to 5% and l%, respectively, for players drafted after the 25th round). Players who choose not to attend college because they are selected in the draft, or leave college after their junior year, often do not complete their education after being released.

Second, MLB desires to move the draft later into the summer, preferably after the completion of the College World Series, so MLB Clubs do not draft players in the middle of the NCAA playoffs.

Third, under current player development philosophy, many Clubs prefer to rest recently drafted players as much as possible since they just completed a full season of high school or college baseball and utilize their Spring Training complex to orient them into professional baseball.

Whether MiLB agrees with these objectives or not, these are decisions that MLB, in consultation with the Players Association, has the right to make to develop elite baseball players into Major League players. Our player development objectives impact short-season baseball in two distinct ways. First, with the draft moved to early July, MLB Clubs would not have players to send to short-season teams until late July or early August, making the operation of a short-season league unfeasible. Second, with the number of rounds of the draft reduced, MLB Clubs will not sign a sufficient number of players to staff short-season teams.

First, MLB doesn’t actually address the cost-savings criticism in their objectives. MLB wants to shorten the draft, and the explanation they provide is that only one in 20 players after the 25th round makes it to the majors, with players forgoing an education to chase a 5% shot at playing in the big leagues. (We could dispute whether a 5% shot at the majors is actually that bad given the potential payoff.) However, the player demographics in those rounds don’t really support MLB’s “education” contention. Half of the players drafted in the latter rounds are either college seniors or from a junior college. Many of the high schoolers or college juniors taken in the draft’s latter rounds don’t end up signing contracts and return to school, and those that do often receive six-figure bonuses, indicating that clubs actually have quite a bit of confidence in these players’ abilities.

This is certainly an effort to streamline the minors and make them more efficient by removing those players who have the least chance at a successful pro career, but efficiencies is just a buzzword for cost-savings when the players MLB teams are concerned about spend most of their time at the spring training complex and almost no time in short-season leagues before moving up to full-season A-ball. MLB wants to codify what teams are already doing in practice, and eliminate what they see as wasteful spending. The lack of a real chance at the majors also conflicts with their own statement in the next paragraph where they discuss developing “elite baseball players.” MLB isn’t being altruistic toward the players with little shot at the majors. They simply don’t want to spend their own resources on developing players who probably won’t see the big leagues.

Additionally, reducing the number of rounds in the draft would make the second and third points moot. It doesn’t matter when the draft is or what teams prefer to do with drafted players in the summer if they’ve already decided they don’t want to have enough players to field short-season teams in the first place. It’s also worth noting, despite their mootness, that the second and third points actually directly conflict with each other. Leaving players to their own training programs, the influence of non-MLB coaches, and more pre-draft showcases for an additional month after the vast majority of potential draftees have finished their seasons runs counter to the goal of resting draftees and neglects a potentially important developmental period for newly drafted baseball players as they embark on a pro career. MLB’s concerns about playing conditions and access to good clubhouses as well as training and nutrition programs ring hollow when they reveal they have no regard for these players’ futures in baseball because they don’t think they have one.

There might be an argument that MLB should stop preying on these players’ unrealistic dreams, but that also comes up short when one considers that MLB has acted as the predator by using its lobbying money to get laws passed that deny minor leaguers a living wage or fair pay for all their work.

Eliminating short-season baseball also somehow makes the Save America’s Pastime Act even worse than when it was passed as part of a massive spending bill in 2018. When the legislation was originally proposed, it came on the heels of a still-pending lawsuit to provide minor leaguers with overtime pay. From MiLB’s press release on the law suit:

This suit threatens baseball’s decades-old player development system with an unprecedented cost increase, which would jeopardize the skills-enhancement role of the minor leagues and the existence of Minor League Baseball itself. As a result of this lawsuit filed on behalf of thousands of current and former players, many cities would be in jeopardy of losing their Minor League Baseball teams, resulting in the elimination of tens of thousands of jobs nationwide, shuttering tax-payer funded ballparks and creating a void in affordable family-friendly entertainment.

The law, which had the full support of MiLB at the time, doesn’t appear to have stopped MLB from putting cities in jeopardy of losing their teams, nor has it protected jobs. When the bill was passed, Rob Manfred claimed that it was a good thing, as it would result in a raise for some players. But even if we were to believe that assertion, under MLB’s proposal, most of the players who would “benefit” from the legislation might have their teams taken away entirely. When politicians decry MLB’s proposal (and perhaps attempt to pass legislation to prevent it), there will be some voices who wish politics would stay out of baseball. But it was MLB who asked politicians to help them; it was MLB who invited politics into its sport. It’s only reasonable for those same politicians to remain involved when they feel they’ve been lied to.

Ultimately, removing the short-season leagues wouldn’t change much regarding how MLB handles elite prospects. Those leagues are filled with good players who probably won’t make the majors, playing mostly extraneous baseball, and it only costs MLB teams $400,000 per year to pay those players. The real question is whether such a league should exist. While MLB touts an alternative indy league that would receive some MLB assistance, when these leagues only draw 75,000 fans per season and charge $7 per ticket, spending nearly $400,000 on players isn’t feasible; most teams would simply die. If the short-season leagues are to remain viable, major league teams need to foot the bill for player costs and provide those players.

There’s a business argument to be made based on the fact that the value teams recoup in developing one average baseball player from these ranks probably pays for about 10 years worth of team salaries. To say that paying these players bonuses under $10,000 each and then spending less on an entire team than a minimum-salaried player makes it nearly impossible for major league clubs to “lose” money on these leagues when big leaguers are the lifeblood a $10 billion per year industry. There’s also the argument that providing access to cheap, in-person baseball for current and potential fans is an important part of keeping and creating new customers.

But there’s also the issue of a one-size-fits-all approach to developing players. While talent identification is likely better than it used to be, identifying players who will improve and succeed if given the opportunity and training remains an imperfect science, and one at which major league organizations are not equally adept. The Astros believe their system shuttering farm teams and keeping players closer to their spring training facility is the best way for them to develop prospects, but clearly not all teams build and succeed in the same way. Ten franchises, including teams with great development records like the Rays, Yankees, and Cardinals, have multiple short-season teams, and many other clubs have multiple complex-league teams in Arizona and Florida. With a proliferation of technology better able to identify a player’s strengths and weaknesses, and help with tweaks to pitches and swings, there should be more diamond in the rough stories made possible by a larger pool of talent. Limiting those opportunities over what amounts to a fifth-rounder’s signing bonus or the salaries for a few September call-ups doesn’t seem worth wrecking the current system.

Of course, as you may have guessed from this installment and the last, isn’t just those costs that’s driving MLB’s push for a weakened farm system. We’ve reached the end of the second part and have yet to address the real power consolidation that MLB is shooting for. We’ll do so next time.

We hoped you liked reading Untangling a Minor League Mess, Part II by Craig Edwards!

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Craig Edwards can be found on twitter @craigjedwards.

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dukewinslow
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dukewinslow

I’m sympathetic to the argument here but this is the second time you guys have self cited and called the self cited argument “convincing”- and the other sides unconvincing (or called the effect of a single study y’all did on closing clubs on access “clear and obvious”). This is rhetorically unacceptable, and particularly shoddy because the articles you cite don’t present a particularly analytical, quantitative argument, even though the framing is as if you are citing solid quant evidence. You’re basically doing the second semester grad student thing where you cite the paper and hope no one hunts down the paper (they always find the paper, or it turns out someone wrote it and, uh, disagrees with your interpretation). Self citing what’s essentially an opinion piece/editorial and presenting it as definitive on a website built around quantitative analysis and data driven decision-making is, well, bold.

I don’t see a single number valuing players produced by short season ball in this piece. I do see a dismissal of Sawchick’s argument essentially out of hand, and he DOES attempt to analyze the benefits of contraction, using data. I’m a partisan for streamlining development and proximity to better coaches, better nutrition, and better training. But there’s a world where heterogeneity in development works out for teams- but we don’t really have an analysis of that world here.

Given the general tenor of other arguments elsewhere, I’d say no one is convinced that a. removing minor league teams gets rid of access or b. getting rid of short seasons hurts development. Given Sawchick has argued reasonably effectively about the benefits of contraction, that side is essentially winning in a walkover. In sum, more analysis, please. Currently, I know that the minor leagues cost the MLB very little. But I need to know what the benefits are, or at least an estimate, in order to decide whether cutting these teams matters. So far, people haven’t presented much hard evidence that teams or consumers benefit from these short league teams other than squishy “access” and “development” arguments.

jfree
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jfree

>Currently, I know that the minor leagues cost the MLB very little. But I need to know what the benefits are, or at least an estimate, in order to decide whether cutting these teams matters.

I come at this from an entirely different perspective. I don’t give a damn what either MLB or existing MiLB think they are entitled to or what is most profitable for them. That’s their problem.

But when they are arrogantly presuming to decide the structure of the entire adult sport in the US – and the ability of smaller towns to not be held hostage to their stadium extortion – well then they have crossed the line into what is a public concern. And their very discussion and presumptions are based on a ‘privilege’ (in the original sense of the word – private law that applies only to some) that in turn is founded on corruption.

At that point, merely allowing them to define the terms of the discussion is accepting both that corruption and privilege. It is time to kill the anti-trust exemption and to instead have a true sports governing body for baseball that is outside the control of (and initially actively hostile to – to try to offset the 100+ years of embedded anti-competition) MLB and MiLB. To reimagine a competitive sporting environment from scratch rather than to accept the limits of what those two want to discuss.

dukewinslow
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dukewinslow

I too would like an english style 8 level pyramid, but that will not ever happen here (England is the size of Alabama, for starters, also we’re dirty communists in the US and refuse to relegate teams)

spudbeer
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spudbeer

The value of relegation is extremely exaggerated. They still have a big six problem, much like MLB has.

The problem with minor league baseball competition is the MLB clubs have too much influence and control too many players. If you limited MLB clubs to 40 contracts, all they could do is either offer the extra 14-15 players to independent minor league clubs on an assignment basis, or put them in a training facility league with a few player-coaches until they’re needed on recall. Let them bid on an independent club player mid-season if they want him bad enough and force them to release a player.

dukewinslow
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dukewinslow

teams in the championship run huge deficits, teams in the epl do not. relegation costs 90 million pounds in tv fees alone according to sky. Swissramble makes the case that the actual costs are in the hundreds of millions of pounds (average 30% drop in attendance). 9 clubs have gone out of business within 5 years of relegation.
Certainly, there’s a big club problem, but even that fluctuates (see: Leeds, Arsenal, Liverpool are back, LCFC).

spudbeer
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spudbeer

Not seeing how putting teams in a position to run deficits is a preferable idea. You go from a sporting competition which was the essence of the game to off-field competition which appeals to obsessives like myself and turns off casual fans which are ultimately more important in the “supply chain”.

dukewinslow
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dukewinslow

I misinterpreted your point- I thought you were saying that relegation was costless. IT IS NOT. It’s just way more “free market” of a solution than we use in the States, which is interesting.

I think there should be ways to keep the McCourts, the Hickses, and the Gillettes (and you know honestly the Wilpons)- owners who can’t afford their teams- out of the game, and relegation is a good one- but it also really deeply punishes the fans.

Dave T
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Dave T

My take: at this point, relegation is around where it exists because of path-dependence and tradition. It evolved in an era well before broadcast rights were such a driver of team revenue / finances, meaning during an era when the revenue differences between top tier and second tier leagues were vastly smaller. It’s not an accident, for example, that the KHL – widely regarded as the 2nd-best pro hockey league in the world – was set up in 2008 without a relegation system.

Tying back to the original point, I’d also say that the “access” and “development” arguments that dukewinslow rightly derides as “squishy” implicitly also rely on path-dependence and tradition. Surely there’d be some at least marginal benefit for “access” and “development” to adding another 30 minor league teams in other markets, but the implicit underlying view in many of these posts at Fangraphs is that the current structure is somehow correct or optimized. The linked post from Sawchik at 538 expresses a viewpoint that’s closer to comparing with “what sort of system would we create if we started up a development system from scratch?”

dukewinslow
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dukewinslow

I guess my big question is “how do we keep people like the Wilpons from owning teams? How do we punish people who either can’t afford or don’t want to win?” England has the useless fit and proper rule, and the quite more successful FFP rules (at least for keeping teams in business).
I don’t think it’s a big problem in baseball yet, but the Marlins sale could be the first domino in teams with indifference to fielding a good team. This is different and worse than teams like the Mets, who simply can’t afford it. The league needs a mechanism to keep undercapitalized owners out of the league, or kick them out if they lose all their money on bad parking lot debt (TWICE. IT’S HAPPENED TWICE). Otherwise they just invite vultures.

jfree
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jfree

Germany limits clubs to owning TWO teams – a reserve team which can max out at the 3rd level league and the main team. Those reserve teams rarely win that 3rd level league anyway precisely because they tend to be more developmental rather than focused on ‘winning’. But promo/relegation also creates a healthy changing market for teams to buy/sell player contracts (which also means more pro/semipro contracts can get signed).

It does force the successful clubs to branch out differently. Bayern Munich (which is roughly as valuable as any non-Yankee team) has those two teams + a professional women’s team + a junior team + a senior team + they leverage their facilities ownership for other professional sports leagues. All of which really leverages them to Munich – which makes it better for taxpayers to actually invest in sports facilities – and gives them an ownership structure that is unknown now in the US outside maybe the Green Bay Packers.

The German model of team sports governance is probably a better model than the English one (which is geared more towards attracting big pockets owners). It is membership-driven (7 million Germans are indirect members of that governing body) so it can encompass the different interests of fans, athletes, munis, clubs, teams, leagues, etc. And the result is a very healthy sport – 170,000 teams as part of 25,000 clubs and probably a couple thousand of those teams at a pro or semi-pro level. Not 30 clubs deciding that 250 teams is too much

dukewinslow
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dukewinslow

yeah I think BL is the gold standard

Curacao LL
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Curacao LL

RB Leipzig calling for you on line Zwei…

frangipard
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frangipard

“But when they are arrogantly presuming to decide the structure of the entire adult sport in the US – and the ability of smaller towns to not be held hostage to their stadium extortion – well then they have crossed the line into what is a public concern.”

Dude, that ship sailed decades ago when the minor leagues became affiliated in the 1950s. And in point of fact, with the success of Indy league baseball in recent years, smaller towns have had vastly more ability to not be “held hostage” than anytime since ~1960.