120 Minor League Teams Receive Professional Development Licenses

The wait is over.

Earlier this week, the 120 teams invited to be part of Major League Baseball’s new minor league system received their Professional Development Licenses (PDL). Now, the clock has begun on what is expected to be one of the final stages of an 18-month process.

The 120 teams have until Feb. 10 to decide whether to sign the PDLs and become part of MLB’s new minor league system, or decline and forge their own path.

If a team fails to sign within the 30-day window, MLB could opt to extend the deadline, but it is more likely to simply offer the declining team’s PDL to a different team.

It is unlikely it will get to that point. In conversations over the past few months with a number of minor league operators, there is a near-unanimous belief that all 120 teams invited will sign their PDLs.

Once MLB has received signed PDLs from every team in a league, it can construct a schedule. There have already been meetings between MLB and minor league teams to discuss scheduling.

Once teams have schedules, sales of tickets and sponsorships should become more effective. Multiple minor league operators said getting a 2021 schedule in hand will help determine when they can re-hire furloughed employees. Many minor league teams are currently staffed at far below normal levels after losing the entire 2020 season due to the coronavirus pandemic.

The terms, as MLB laid out in a 56-page sheet in December, had a number of disconcerting items for minor league teams that could likely be tweaked in ways that would make a significant impact for minor league clubs without adversely affecting major league teams.

The PDLs are MLB’s replacement for the Professional Baseball Agreement, which previously governed the relationship between major league teams and their minor league affiliates. They also replace the affiliation agreements. The PDLs have 10-year terms—unlike the two years of a standard affiliate agreement—and lay out all the details of the relationship between the majors and minors.

Non-disclosure agreements prohibit teams from discussing the terms of the new licenses, but the reception has been largely positive. In conversations with operators of teams at all levels of the affiliated minor leagues, the general response was cautious approval. They don’t like every aspect of the PDLs, but were generally happier with what they’d received than when the PDLs were initially described in December’s proposed term sheet.

The multitude of changes MLB made to the original proposal showed minor league owners that the league was willing to listen and accept feedback.

Minor league teams have long known that they are putting their fate in the hands of MLB with this agreement. The language of the terms spells out that final decision-making authority on a multitude of issues resides with the MLB Commissioner’s Office, although a nine-person executive board composed of four minor league appointees, four MLB appointees and one neutral party will be in charge of making recommendations for adjustments.

Minor league operators are encouraged and feel that MLB is showing in small steps that the PDL system could end up being mutually beneficial. They also say they will not know the full drawbacks and benefits of the new system for years—teams will not be receiving revenue from MLB’s marketing and sales until 2023, and until that happens, teams will not see the difference between the past and the present.

MLB has adjusted its initial proposal in ways that will benefit minor league teams.

For example, a switch to six-game series in 2021, as Baseball America reported last week, will cut travel costs for teams, especially in Triple-A. Tweaks to insurance requirements, territorial rights, team sales, fees and assurances that facility standards will not be enforced for a couple of years all are adjustments that were requested by minor league operators.

Such tweaks will likely mean very little to MLB and major league teams’ bottom line, but they do give minor league teams hope they are entering the first stages of a potentially mutually beneficial relationship—albeit one with a massively unequal power structure—rather than one where MLB uses its power to the detriment of minor league teams.

Minor league teams are having lawyers review the lengthy license agreement, but they could start signing their PDLs soon. Schedules will start to be released shortly thereafter, and the new-look minor leagues will take a big step toward the 2021 season.

At that point, the names of the leagues and even the entirety of the new development system will be learned. There is a possibility that the leagues will be renamed. MLB does not own the rights to any of the existing league names or Minor League Baseball without it being conveyed as part of an agreement.