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Originally Posted by RonCo
5) Minor league teams can actually make money
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These days, perhaps. But in the past, minor league baseball was often not a profitable enterprise, especially at the lower classifications.
Quote:
Originally Posted by RonCo
So realistically, I think the minors exist because it's historically been a good investment, regardless of the number of 5-stars that appear to be available.
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Well, the relationship between the majors and minors is a long and rather complicted one. And MLB has, from time to time, complained about the amount of money it pours into player development for what seems like a very small return on investment.
A good example of that happened in 1990, when the majors and minors had to hammer out a new Professional Baseball Agreement (the agreement which spells out the exact nature of the major-minor relationship). The majors complained they were spending too much on the minors for too little return. At the AAA level, the minor club was only responsible for 3% of the team's payroll; the MLB parent was responsible for paying the other 97%. In 1989 MLB clubs were spending, on average, $5.5 million each on their minor league operations (it ranged, according to MLB, from a low of $4.3 million to a high of $8.9 million). This in return for only about one in ten minor leaguers ever playing a game in the majors, and only one in fifty lasting more than six years in the majors.
MLB wanted financial concessions. The minors were saying no. As a result, it looked like a serious split between the majors and minors was imminent.
Triple-A clubs were talking about splitting off and forming a third major league; the MLBPA was considering arguing that if no new PBA was reached the minor league players would be free agents; and MLB was talking about taking all its minor league players and setting up training camps at their spring training facilities and scores of towns would be without minor league baseball. You can find articles in
The Sporting News and
The New York Times about the dire state the major-minor relationship was in at the time.
As it turned out, in Dec. of 1990 a new PBA was reached. The majors got some of their financial concessions. Minor league officials estimated that MLB clubs would save at least $100,000 a year, while minor league clubs would end up paying about $25,000 more in Class A to perhaps $100,000 more at the AAA level to run their operations.
There's a long history built up in the current minor league system so it's difficult to just throw all that aside and build from scratch an entirely new system. There are a lot interests which want to keep the current system, whatever its inefficiencies, in place.