End Of Indy Leagues?

As the Save America’s Pastime Act heads toward becoming a law in the next few days, there will likely be unexpected collateral damage.

If the bill passes, there will likely be significantly fewer independent league baseball teams around the country this year. as some leagues will likely be put out of business by the increased costs required for players salaries.

The act would formally declare that baseball players are seasonal employees, which would eliminate a lawsuit where some ex-minor league players are trying to prove they should be subject to overtime and minimum wage laws like the most employees around the country.

At the affiliated level, that means players will largely continue to be paid as they currently are, although a few players making the minimum salary will get a modest boost because the new bill mandates all baseball employees receive minimum wage for 40 hours a week ($290 per week).

But the new regulations will affect affiliated and independent leagues (which are not tied to Major League Baseball) equally, as the bill specifies only that it applies to those who play baseball professionally. At the affiliated level, owners are thrilled to potentially be out from under any concerns about overtime laws, and the very, very modest bump in a few players salaries at the lowest levels of the affiliated minors will have no real financial impact.

In some independent leagues, this new bill could blow up their salary structure by massively increasing costs. In others, it will be mean closing the doors.

“If that is the case, it puts us out of business,” said Mike Shapiro, the president of the Pacific Association’s San Rafael Pacifics. “It would be the ruination of at least lower level independent leagues like ours. We’re struggling enough with worker’s comp . . . It’s the end of independent ball, certainly at the lower levels.”

 

Under current laws, independent leagues have operated like affiliated baseball under the assumption that its players are seasonal employees not subject to overtime or minimum wage laws. That has always been a potential subject of legal dispute, but that would only be determined if a player embarked on a lengthy lawsuit. So, many leagues have paid players significantly less than the minimum wage.

The Frontier League has a $75,000 salary cap per team , which is an average of $725 per player, per month. The American Association and Can-Am Leagues have similar salary caps, although their caps stretch into the low six figures. Leagues like the United States Professional Baseball League, Pacific Association and Pecos League have significantly lower salary limits. The Atlantic League is likely to be the only independent league who won’t see its salary structure significantly affected if the Save America’s Pastime Act becomes law.

Unlike the affiliated side of baseball, where minor league players’ salaries are paid for by major league teams with massive revenues, independent league players’ salaries are paid for by the teams. While some independent league teams are quite successful financially, there are many others who live a much more threadbare existence. Profits are often small or non-existent.

The Pacific Association was planning to go into this season with a $25,000 per team salary cap, down from $40,000, to cope with rising worker’s compensation costs. Under the provisions of the Save America’s Pastime Act, the league would have to at least triple its spending on players, a financial impossibility for the clubs.

 

“I tell you who gets hurt the worst, it’s not only the players, where we are the last stop,” Shapiro said. “They lose out because they don’t have the opportunity. The other who loses out is these communities with 1,000 seat ballparks. It’s a cheap night out for local families.”

For larger leagues with higher salary caps, the bill may not kill the leagues, but in the long-term it could lead to fewer teams. Some teams in smaller or less-robust markets find it impossible to handle the cost increases. Independent leagues have already seen some teams leave to become summer collegiate wood-bat leagues, where the players are unpaid. This could speed further teams to make that transition.

For the 2018 season, teams may now have to figure out how to increase their player payroll by 30 to 100 percent just a month or two before their seasons begin. The increased player wages will also lead to increased workers compensation costs as well, which is one of the largest expenses many independent league teams face. Budgets are being blown up all around independent baseball.