Messin' With A Man's Money

Last week, while addressing the masses gathered at the Winter Meetings, Minor League Baseball's Executive Director and mega-connected Washington lawyer, Stan Brand, dropped a predictable hammer. He outlined the governing body's staunch opposition to the burgeoning lawsuits aimed at addressing what many see as vast pay inequalities between Minor League baseball players and other American workers. I've mentioned it in this space before, and mentioned it often on Twitter, but it bears repeating. Minor League baseball players are paid only during the 5 months of the season. They are not paid during Spring Training, Fall Instructional Leagues, or the rest of the offseason. In 2014, Triple-A players were paid $2,150 per month, for 5 months, netting them an annual salary of about $10,750 before taxes. Double-A players averaged around $8,500 for the year, and it gets less pretty as you move down the affiliate ladder. You can see the reason for the growing number of class-action lawsuits challenging baseball's current structure. Minor leaguers are paid by the big league clubs. Uniformed, on-field personnel are the only people you see at a minor league game who aren't paid by the minor league club. In short, the Rangers pay the RoughRiders players, coaches, trainers, etc; everybody else working in the park is paid by the RoughRiders organization. And many times, everybody else working in the park is making more than the players themselves.

According to Baseball America's Josh Leventhal, last week, "Brand announced that he will begin to petition Congress to add minor league baseball players to the list of 35 occupations not required to receive minimum wage or overtime pay as dictated in the Federal Labor Standards Act." Brand is a powerful dude and I imagine he's one of those Washington attorneys who drink martinis out of rocks glasses and wear bow ties unironically. He's going to wield a mighty ax on behalf of the bosses who sign his 10lb paychecks. Brand and his team know baseball's antitrust exemptions like Icky Woods knows cold cuts and I bet they're currently waist deep in all variations of labor laws and acts. Despite a growing number of class-action suits and a media contingency that appears to be entrenched on their side, the players are up against it here.

I devoured all of Brand's public comments from the meetings and have read as much as I can about the lawsuits. I'm (very much) not a lawyer and I'm damn sure not an economist, but I am another "-ist"...an optimist. And I'm an entrepreneur. I'll look for a solution no matter what problem you present. So that's my new focus for this issue. Generally, the 1st rounders and bonus babies are doin' fine. Better than fine actually, and most of Texas' other kids seem to have at least a conceptual understanding that they're basically broke and need to be smart with what money they have. That said, I disagree with the sweeping statements Brand and others seem to be making that Minor League Baseball as we know it would cease to exist if reform were to occur.  Stan asserted, "And the question is do you stand the economic structure of baseball, and in this case minor league baseball, on its head and threaten the viability of lower classification baseball and the infrastructure that supports it, or do you make an exception for something that has been this way for a long time and has grown up on a reliance of that."  While not naive to the inevitable changes that would occur with reform, I'd stop considerably short of suggesting the economic structure of baseball is going to be stood upon its head. Here's why- my admittedly rudimentary solution:

-Pay all ~125 full-season ball players an annual salary of $30,000.

-Pay all ~125 rookie ball, DSL, short season and developmental players an annual salary of $14,000.

(all numbers are rounded up because 1) things are always more expensive than you think and 2) who really likes math?)

This would create a payroll of $3,750,000 for all 4 full-season teams and $1,750,000 for the remaining players at various levels in the development pipeline. $5.5million for ~250 players. Add in ~$340,000 (6.2%) in Social Security taxes, ~110,000 ($434/employee) in federal unemployment taxes, ~$80,000 (1.4%) for medicare, and another ~$60,000 (1%) for state unemployment taxes. All this totals approximately $6.1mil. Add in another $400K for various administrative expenses, and additional personnel to handle the new payroll and financial planning duties and I think you get this deal done (in Texas, at least) for $6.5million a year.

That was the easy part. Outlining the spending expectations and allocating their destinations is a fairly straight forward exercise; coming up with the money is the hard part. Adding an additional $6.5 million in payroll to an operating budget is tricky. Tacking on that amount to the Rangers expected 2015 payroll would mean a player payroll of $141,500,000. Obviously, this is a figure likely to be passed down to the end consumer and we'd see it in a bit of a jump for tickets and concessions and team-owned parking. But I'd like to think the teams, owners, and powers-that-be would see the money as a responsible investment in the future of their business. Believe it or not, the biggest paradigm shift will need to come from those you might think would be most in favor of this- the players themselves. I honestly think a push for reform that ultimately results in change will require an effort from the powerful Major League Baseball Players Association. The issue here is the MLBPA has a bit of a surprising history when it comes to alienating the minor leaguers if the result is beneficial for them and their members. Despite a perceived lack of empathy over the years for the minor leaguers they once were, every once in a while the MLBPA pops their over-sized head into a dispute involving ballplayers who aren't yet big leaugers (see the Brady Aiken saga).  Ultimately, I'm hopeful that enough of them remember the struggle, and once they have the ear of their peers and a membership card for the MLBPA, they push to ensure young ballplayers have different developmental environments to learn and nurture the game that has given all of them so much. Too much to ask for? Too entrenched in the "pay your dues" mentality? We'll see.

Few things are more annoying and presumptuous than hypothetically spending someone else's money, but I think it's time to move past the bitching and moaning stage. Stan Brand is a hired gun, a hired neutron bomb more like it, sent to maintain a clearly outdated ideal. Big league salaries have risen by 2,000% since 1976. Minor League salaries have risen by 75% during the same time. Adjusting for inflation, minor leaguers make less money today than they did in 1976. The system needs repairs. Adding $6.5million to the payroll of each Major League franchise isn't chump change and shouldn't be looked upon as such. But I do think it's a doable goal and a number that represents a good start in a conversation to fix a broken and antiquated system. Frankly, in a perfect world, the clubs themselves realize, like so many other contemporary corporations, spending more to develop happier healthier employees could end up reaping tremendous benefits for the whole. If baseball initiates it's own reform, guys like Stan Brand will have to buy their own martinis and congressmen will have to find something else to do with their time. Whoa. A guy can dream, can't he?

Just some food for thought during the winter months. Oh, hey, before I forget, you got about 60 days before pitchers and catchers lace 'em up.

As Always, Enjoy Baseball! Love Ya!

-Tepid