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Thanks, Brain, and good points stlcard25 and MM. My fear is that the ticket prices at the major league level are already way too high, which makes it difficult for a family with several young kids to go to a game. That will catch up with MLB in the long run as younger generations won’t be coming to as many games and aren’t as interested in baseball as we older fans are. And now they’re going to take minor league ball away from 42 communities around the country to just to feed their appetite of greed. I’m sorry, but paying a pitcher $1,000,000 a game ($10,000 a pitch) doesn’t settle well with me, as they close down minor league baseball in 42 communities.
I get the frustration. It is a challenge to know what to do about it. Fans have no advocates to effect change other than maybe a personal decision to stop spending on baseball. And does that end up doing more harm than good?
For me, a key point is that it should not have to be a tradeoff. There seems enough money to go around that both MLB players and minor league players could be paid fairly and minor league investments could continue – while MLB could remain a very profitable business. After all, we talk about minor league teams going broke and players making less than minimum wage while the ones at the top make millions. But there are few if any checks and balances.
Brian points out the value of getting the young fans into baseball. If we insist on taking away their access to anything that involves a minor league connection near them for them to see now and then we will send them to just staying inside and playing on their computers and the internet. It has been very noticeable in the past decade or more how the number of Latin players has grown. Black players have about leveled off as baseball and basketball are in direct competition and basketball will win every time with the average black player as they are usually more active at the hoops in their neighborhoods. But Latins are baseball crazy from day one and are more like the US used to be – a game on every corner. So what I see is more Latins coming to the major leagues because they have developed more talent while other minorities and Japanese/Korean athletes will maintain their numbers. Taking high school kids for the minors should be the exception as they are probably the ones that will not have a team to play for, ie, short-season team. JMHO.
He actually said that minor leaguers travel to games in school buses!
Why am I not surprised.
If you cap player pay as a percentage of total team revenue, I get it.
That is what I need Brian – ideas that make sense. I just put forth a proposition but had no particulars to back it up. Percentage of team revenue would be an excellent part of such a proposition.
To my comment from earlier, I was looking for something else and stumbled across this article from Sunday. I had forgotten that Williamsport is owned by Peter Freund’s Trinity Sports Holdings. That portfolio also includes the Memphis Redbirds.
In this release, after the last MLB-MiLB meeting, Williamsport is declaring it is still alive. What else can they do?
I have heard some rumors of a new mid-Atlantic league that could include a few survivors, but unless MLB raises the 120 target, all it would mean is that some other teams get lopped off instead. Feels to me like teams on the block are lobbying to push someone else out of the last few deck chairs remaining. At some point, the music is going to stop.
It is important to not lose sight of the overall picture. Even if State College is “saved”, they would almost certainly move to a new league and a new affiliation. Good for them, but the Cardinals still lose the farm team. And if MLB sticks to 120 teams (four full-season teams for each of the 30 organizations), another club in a different town would have to be cut to make room.
The odds of the Appalachian League (which includes Johnson City) being doomed are 99.9%, in my estimation. Since MLB owns the teams, they can easily eliminate them, and all indications are that they will do just that.
#Cardinals expect Johnson City to be one of the affiliates at risk of being eliminated as Minor League Baseball downsizes. And they could have another affiliate on the finalized list, depending on its length. https://t.co/5BmPLJ9oSN
— Derrick Goold (@dgoold) May 4, 2020
So many thorny issues to be worked out…
The general parameters of a potential deal?
They still appear to revolve around 120 full-season, affiliated teams playing in 2021 and beyond.
Here's the latest on where MLB/MiLB PBA negotiations stand: https://t.co/2T3kgBEugS
— Baseball America (@BaseballAmerica) May 4, 2020
MLB wants to cut the number of teams in Minor League Baseball, starting in 2021. This is not the first time, as the game has worked its way through many different cycles of growth and decline. (free) https://t.co/2XU7gN0r4Y pic.twitter.com/ROHhBFFVjt
— Brian Walton (@B_Walton) May 6, 2020
As baseball is waning in interest among young people, MLB pulls home town affiliated baseball from 42 communities. Makes a lot of sense.
I feel that current owners are destroying the game we love. Most of the new rules are idiotic, and do little to speed the game up. I don’t understand concerning yourself over lesser escalation of costs in the millions of minor league play, and then hand out multi billion dollar contracts to individual players. What’s next, star players making a 100 million a year?
Head of the independent Atlantic League is mindful of minor league teams to be cut in their footprint. This seems to include State College.
Really good articles by Derek and Brian here. While it may change in the future, it’s certainly sad for those teams in areas that are going to lose their affiliated clubs.
Brian – good breakout on the operating costs of a minor league affiliate, and how those costs are shared. Is there any way we can deal with real numbers? Three categories for a specific team – total revenues from tickets and sponsors, parent costs, and affiliate costs. Maybe one of the affiliate owners could share that on a no name basis. Perhaps State College or Johnson City.
What is more exciting – younger players (many of whom have high ceilings) who have MLB stars in their eyes or 26-27 year olds who aren’t really prospects anymore after hitting .240 at AA?
bccran, your last post is rather vague, but if what you are asking is whether fans will better support an affiliated team at the Short-Season Class A level or an independent league team, we all already know the answer. However, fan support is not a factor in MLB’s decision to cut minor league teams.
Books for privately held companies are private, but here is some general information from a story about Forbes’ assessment of the most valuable MiLB teams in 2016.
“…minor league franchises rely almost entirely on in-stadium revenue streams for revenue. Their core sources of revenue are tickets, luxury suites, parking, stadium sponsorships, ballpark naming rights, concessions and merchandise sales: 18 teams in our top 30 cracked the top 25 in merchandise sales last year.
“In contrast, most of a minor league team’s expenses go toward stadium operations and rent obligations in their lease agreements with local governments (stadium rents can range from a set percentage of ticket sales to a flat payment of well over $1 million annually). The economics of the minor leagues revolve around the ‘farm system’ model, where player costs – which can typically range from $10 to $15 million per season for scouting, salaries and bonuses – are paid for by big league affiliates. For this reason, there can be wide profit margins, with the 30 clubs on this list generating an average operating income (earnings before interest, taxes and depreciation) of $2.2 million, or approximately 17% of revenue.”
None of the most valuable teams are from short-season ball, but on the Forbes list, there are two Midwest League (Class A) teams estimated to be worth $45 MM and $31 MM, respectively. Of course, if they were to lose their affiliation, most of that value would vanish.
Here is an estimate of $17-$22 per person spent for a minor league game.
3. Every team is different, but a typical MiLB per cap is in the $17-22 range, some higher, some lower. MLB teams have a wider range. The difference between per cap for a Red Sox/Yankees game and a Marlins/Rays game is pretty massive.
— JJ Cooper (@jjcoop36) May 7, 2020
Brian – good breakout on the operating costs of a minor league affiliate, and how those costs are shared.
Which article are you referring to?
I usually go straight to the forums. I will go back and check it.
Edit: I went back and read the article. That is good info and answered several questions I had.
I’d like to see the breakout of revenues, EBITDA, and valuation for a few of the short season teams. Many of those owners must be livid.
My prediction is that we will learn once lawsuits are filed. They might not win, but I bet someone will try. Heck, I probably would if I was an affected owner.
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