Does Minor League Baseball Have An Alternative Plan To MLB's Proposal?

Whether it’s a multi-billion dollar deal or a pair of siblings haggling over what to watch, any wise negotiator has to know what they can do if they are presented with a less-than-desired deal.

And in any significant discussion, a wise negotiator will have already analyzed a multitude of options for both their sides before they ever sit down and talk.

Part of that analysis is to map out the best alternative to a negotiated agreement (BATNA) for both sides. A negotiating team needs to know what its alternatives are if it decides to walk away from the negotiation. Ideally, it needs to know its adversary’s alternatives as well.

Over the past year of Major League Baseball’s negotiations with Minor League Baseball over the future of the minor leagues, MLB’s BATNA has been clear. With no deal, MLB could walk away from its current relationship with MiLB and set up its own development system. There would be logistical issues and potentially some political and public-relations risks, but the option would allow MLB to set up a system in line with its desires.

Early in the process, that alternative could have relied on lining up independent league teams as alternate sites for teams for its minor league players. But it has become clear to all parties involved that if no MLB-MiLB agreement can be reached, many current affiliated minor league teams would be interested in leaving MiLB to join an MLB-developed system. A number of minor league team owners have called MLB’s offices and indicated as much.

So MLB knows it can walk away if it does not reach a deal that meets its needs. Not only that, but it controls the parameters of the negotiation. With an antitrust exemption that protects it from allegations of anti-competitive behavior, MLB has already implemented policies (a shortened draft in 2020 and a later draft in 2021) that turned the reduction of teams from 160 to 120 into a fait accompli.

MiLB does not have such clear alternatives.

In numerous conversations with minor league owners, nobody has explained a clear BATNA for the whole of MiLB as it is currently constructed.

Minor league owners individually may have a solid alternative by leaving their current association (MiLB) and joining MLB’s newly developed system—but that’s not a walk-away option as much as an option to accept MLB’s terms. As a whole, the governmental structure of MiLB has no such alternative.

MiLB’s current governance and business structure is not viable without continued access to minor league players, who are provided to MiLB teams at no direct cost to those teams. Those players are only provided to minor league teams with a negotiated agreement with MLB.

Throughout these talks, MLB has always possessed the option of walking away from the negotiations. MiLB as a whole does not have that option.

The closest suggestion to an alternate option Baseball America has heard in discussions with minor league owners is the top teams in the minors, if they band together, may have the ability to nudge the negotiations closer to their needs and desires. That doesn’t mean that the top Triple-A and Double-A teams necessarily have a true BATNA, because those teams would likely suffer much more if they opted to not join an MLB-run system than MLB would suffer by not having them as part of the system.

But it is fair to speculate that if they held out for a better deal, teams might be able to nudge the deal closer to their needs. Those teams may be able to ensure the new system has the longer terms they desire and mechanisms to help start to restore the franchise valuations that have been massively impacted by the past year’s talks.

The grounds on which these talks are taking place are different than the PBA negotiations in 1990. That was the only other PBA negotiations to come close to this level of contentiousness. At that time MiLB had a more viable BATNA. There were multiple independent and co-op teams operating in the affiliated minors. MiLB’s BATNA at the time was to continue to field teams of players acquired and paid for by the individual minor league clubs.

At the same time, MLB’s BATNA was not nearly as viable as it is today. MLB vowed to field teams of players at their spring training complexes if no deal could be reached, but it had not done enough legwork and research to have a real understanding of how to set up its own minor league system. Playing at spring training facilities was a temporary option at best. MLB did start to reach out to colleges to see about playing in their stadiums, but it didn’t have a clear plan or the desire to chart its own path.

Neither side had a particularly appealing alternative to a negotiated settlement, and the BATNAs were somewhat equivalent. So both sides had strong incentive and similar leverage to come to an agreement, which they did in December 1990.

There’s still a possibility that MLB and MiLB will come to an agreement this year—the two sides have been talking regularly in the past couple of weeks. But the imbalance in leverage and in alternative options is quite obvious.

As one minor league owner explained before the Aug. 27 negotiation session: “This isn’t a negotiation. It’s the terms of surrender.”