Baseball’s Owners Plot Baseball’s Demise

Relentless love of competition is a profoundly American trait, but you’d never know it from the way the Lords of Baseball run their game. From the Designated Hitter and Astroturf™ to the Wild Card and those 1980s-era Houston Astros uniforms that looked like construction signs, Major League Baseball’s owners have never been short on terrible ideas. Bud Selig didn’t get his dream of demolishing the leagues and replacing them with regional conferences, but he did do the next-worst thing—turn the Astros and Milwaukee Brewers into league-fluid franchises.

So far, they’ve somehow managed not to kill the game.

But now, the Major League owners show how little they really understand the game they steward, and the country that invented it.

Baseball’s winter meetings will begin on December 8, and Commissioner Rob Manfred will propose eliminating the rookie leagues, sending those signed to Analytics Reeducation Camp for their first year rather than having them play games, and severely limiting the number of players each team can have in their system.

As New York Daily News writer Bill Madden points out, the majors claim they’re paying too many players who won’t ever make the bigs. But paying those players to play is the price for getting the Derek Jeters, Mike Trouts, and Justin Verlanders ready for the big time.

At least it was. Owners think that the new analytics will save them this waste, that they can better prepare rookies by working with them on launch angle and exit velocity rather than having them, you know, play baseball. They’ll do this by killing minor league ball for 4 million paying customers a year in 42 towns and cities.

They can do this because Major League Baseball effectively runs the minor leagues, and runs them to the exclusive benefit of Major League Baseball. It took roughly a century to get to this point, so long that we have forgotten it didn’t used to be this way, and doesn’t have to be this way.

Analytics, Not Baseball

You probably know Branch Rickey as the guy who brought Jackie Robinson to the major leagues. You may not know him as the creator of the farm system.

Prior to Rickey, minor leagues were really independent leagues, as real and as competitive as the majors, just in smaller markets. They owned their players’ contracts, and could hold onto them or sell them or trade them, just like the majors. The major league teams had bigger markets and more money, so the talent tended to gravitate upwards, but a minor league owner didn’t have to sell.

Probably the most famous case was that of Lefty Grove, one of the best pitchers of all time. Grove helped pitch the Baltimore Orioles to five International League titles, because owner Jack Dunn wanted to fill the stands. Winning did that. Eventually, Dunn sold Grove’s contract for $100,000 to Connie Mack’s Philadelphia Athletics.

All that changed in the next couple of decades. First, Branch Rickey built farm systems for the Cardinals and then the Dodgers by buying minor league clubs outright. Other teams followed, as the cash-strapped minor leagues began allowing their owners to enter into player development deals, giving the major league teams rights to the players’ contracts.

Over the next seven decades, the terms of those deals meant more and more dependency and less and less freedom for the minor league owners.

With less and less control over their own players, the minor leagues stopped being about winning. The best players had always been looking up to the majors, but now that was the sole purpose of the minor league clubs. Players can be yanked mid-season, and neither they nor the teams have any connection to the towns they call home.

Fans know this—they know the players and managers don’t care about winning, and they know they’re watching an exhibition, not real baseball. For a few decades, the minors could coast along on nostalgia, but nostalgia needs a living memory, and besides, there’s MLB every night of the week on TV. For $20 a year, I can get every major league radio broadcast streaming.

Having reduced the minor leagues to vassalage, the majors profess to be displeased when nobody shows up to watch their “games.” And their answer is to begin killing the minors from the bottom up.

Not for nothing does this proposal come from the Astros, kings of sabermetric-driven tanking.  The Astros decided to put money behind the A’s “Moneyball” strategy, and for the first time, a large-market team became value investors, looking for players with every statistical edge they could find.

In fact, killing the rookie leagues may be driven less by salaries than by the cost of outfitting stadiums with the StatCast technology that measures launch angle, exit velocity, and distance. The next step might be to pull minor league ball from the outlying cities altogether and concentrate each team’s A, AA, and AAA operations at one site. It’ll save facilities costs, and non-MLB cities could probably be fooled into bidding for a stadium for three teams rather than one.

Tanking for Cash

That’s the analytics. The tanking is worse. The Astros won by first dismembering their operation and rebuilding it from the bottom up. The price was a noncompetitive major league operation for a few years, but the reward so far has been two pennants and a World Series title.

The problem is that they’ve inspired competitors to try the same thing. Bad teams race to the bottom for draft position, leading to terrible attendance. Because they still trade on the Major League brand, losing instead of bleeding red ink, they hemorrhage fans.

The same lack of competition that’s killing the minors is now starting to eat away at the major leagues themselves.

Look, I love sabermetrics. I’ve been reading Bill James since the mid-1980s. The analytical thinking that goes into these new measures, when done well, provides great insight into what happens on the field. But it shouldn’t become the excuse for my beloved Orioles deliberately turning in a parade of 100-loss seasons or collapsing the minor leagues into a series of simulated games played in glorified airplane hangars.

So what is to be done?

Bill James wrote an essay called “Revolution” for his 1988 Baseball Abstract, prescribing the bitter medicine: eliminate baseball’s antitrust exemption. (In fact, one of the arguments against stabbing the minor leagues in the back is that it will lead Congress to consider doing exactly this.)

While teams compete on the field, leagues compete at the ticket office. The only reason that MLB can get away with these ridiculous player development contracts is that the minor league owners let them. But this sort of cooperation between leagues is exactly the kind of anti-competitive behavior that antitrust law is designed to prevent.

In fact, there are independent minor leagues today. Some of them are small, some of them are new, but some have histories and some have teams that co-exist in the same cities and markets as major league teams. They suffer from low-level talent, and the fact that there’s no clear path to the majors since they’re not part of MLB’s organizational structure.

But they exist, and if all the minors were forced to go back to being independent, those leagues, and their competitors, would get to experience what real competition is like again.

Charlotte, Sacramento, Portland, Las Vegas, San Antonio, Austin, and Nashville are all larger than at least one major league market, and Jacksonville is roughly 40,000 people smaller than Milwaukee. (For a fun look at what trying to win will do, watch the Netflix documentary “The Battered Bastards of Baseball,” about the independent Portland Mavericks’ run from 1973-1977, possibly the only good thing to come out of that decade.) All of them are among the fastest-growing areas in the country. They’d have to compete with national TV and established fan bases, but they’d give players a chance to play and fans a chance to root for the home team.

To quote Bill James:

Competition isn’t always pretty. Teams would fold, go bankrupt sometimes, use nearly naked usherettes in a cheap attempt to boost attendance, pull out in the middle of the night without paying their debts—all of the things that businesses do. Baseball would be less stable. It would change more rapidly than it ever has, in part because each league would be learning from the experiences of the other leagues. But it would be changing because it would be growing, and it would be growing toward a baseball world which is larger, stronger, smarter, richer, more diverse, and more fair to the fans. It can happen.

In the 1930s and ’40s, the Pacific Coast League (PCL) had “near-major league” status, and was seriously discussed as a potential third major league. In 1947, the Los Angeles Angels drew over 620,000 fans, not far behind some MLB clubs, and only two teams, the Angels and their cross-town rivals the Hollywood Stars, were affiliated with major league teams.

On September 13, 2011, the Omaha Stormchasers, AAA affiliate for the Kansas City Royals, drew all of 4,200 for Game 1 of the PCL championship series. Even counting only fixed seating, that was barely two-thirds the capacity of the ballpark. I was there, and there were plenty of good seats still available.

Three months earlier, across town, the championship series of the College World Series, featuring clearly inferior players and aluminum bats—but real games—drew 26,000, more than six times the pros, because those fans had a reason to be fans, not just spectators.

Real winning and losing, with real risks and benefits and costs, can do the same thing for the PCL and other minor league cities, if we let it.

About Joshua Sharf

Joshua Sharf has headed the Independence Institute’s PERA Project for three years. In that time he has authored a number of Backgrounders and Issue papers on Colorado’s Public Pensions, contributed to the Institute’s weekly newspaper column, and spoken to political and civic groups across the state on the subject. He routinely testifies before the state legislature on proposed pension reform bills. He is Vice Chairman of the Denver Republican Party and has also done original reporting on PERA for and I2I’s Complete Colorado news site and is a regular guest on local talk radio, discussing this and other state and national political issues. He has an MBA and an MS in Finance from the University of Denver’s Daniels School of Business, and has also worked as a sell-side equities research analyst.

Photo: Caleb Ramsey/EyeEm/Getty Images

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