Sources: MLB Views Newest Minor League Proposal As ‘Major Step Backwards’

Supporters of the switch in negotiating teams saw the new proposal as a way to potentially shake loose what have been slow-moving talks. Instead, the move is more likely to slow any progress that had been made.

According to sources close to the negotiations, the new proposal is viewed by Major League Baseball as a major step backward in attempts to complete a deal, as it harkens back to concepts that had been fleshed out a year ago.

MLB has communicated to MiLB that switching negotiating teams just 56 days before the current Professional Baseball Agreement expires on Sept. 30 is seen as adding significant complications to efforts to get a deal done.

Adding to the complications, a number of MiLB owners have directly told MLB that the new negotiating team does not represent their interests.

The two sides have not held any formal, face-to-face talks since April 22, but there have been a number of informal discussions since. Before the switch in negotiating committees, progress appeared to be made on the conceptual framework of a deal. While many details needed to be put to paper, which can always cause issues in negotiations, MLB and MiLB’s negotiating teams appeared to have reached understandings on the needs and desires of both sides.

MiLB negotiators had proposed a franchisee-franchisor relationship, where MiLB teams would operate as MLB franchisees. Such a system could provide benefits for MiLB clubs because there are both federal and state legal protections for franchisees in such relationships.

Minor League Baseball owners had also expressed their need for assurance on the long-term nature of the agreement, assurance of franchise valuations and some sort of independent arbitration system to provide a path to resolve disputes with MLB or its clubs. MLB has signaled its willingness to adopt a franchisor-franchisee system with independent arbitration to resolve disputes.

Major League Baseball had expressed its desire to reduce the current 160 affiliated minor league teams to 120 while realigning the minors to improve travel. While the reduction in teams has been met with significant resistance from MiLB, and attempts have continued on ways to expand that list beyond 120 teams, there is an understanding that any final deal is still likely have no more than four full-season classifications.

But MLB also has issues with MiLB’s current governance system, which it has long viewed as archaic and an impediment to resolving issues that arise from time to time. MLB has made it clear it is important that it govern the minors in a new system, while agreeing to ensure there are clear protections for MiLB owners.

That issue helped lead to this week’s disbanding of MiLB’s negotiating committee. A significant number of MiLB owners have told Baseball America that independence from Major League Baseball is much less important to them than the desire for long-term stability and franchise values. Some have gone as far to say they prefer to have MLB govern the minors because of the potential for lower costs for minor league owners and higher revenues.

But retention of MiLB independence is very important to certain MiLB decision-makers, including President and CEO Pat O’Conner, who has the power to control who represents MiLB in the negotiations.

Conversations with numerous people involved in all aspects of the discussions find few who believe there is a path where MiLB can retain governance and independence in any deal.

If MLB believes it is important that it govern the minors, it can reach a deal in which it retains those rights. If it finds such a deal is impossible to reach, it can simply let the current Professional Baseball Agreement expire and then set up its own developmental system, which it would govern.

For MiLB owners, allowing the current deal to expire could carry significant risks.

Much more so than in 1990, the last time a deal expired after contentious negotiations, there is the possibility that Major League Baseball may go its own way and, once free of any current agreement, set up its own system. The logistical hurdles to such a move, however, would be significant and could give MLB incentive to try to work out a deal within the current structure of the minor leagues.

But for MiLB teams, the risks are much more significant. There are many aspects of the current negotiations that various groups of MiLB owners find unfavorable, including the potential addition of more independent league teams, the elimination of some currently affiliated clubs, realignment that could leave some teams in lower classifications and less advantageous terms for upper-classification teams compared to the current system.

Whenever MLB unveils its “final” plan for realignment and the 120 teams, those issues likely will grow.

But for all those concerns and issues, at the core of the current negotiations is an understanding that current membership in Minor League Baseball carries significant privileges.

While independent league clubs may be asked to join affiliated ball, they would only do so by paying significantly (up to $20 million) for the opportunity to join affiliated baseball. While some currently affiliated teams would be left out of a minor league system that is reduced to 120 teams, the preponderance of current minor league teams would remain in the new system and largely at the same classification as before.

If the current deal expires and MLB creates its own system, the benefits garnered from MiLB membership could simply disappear.

In an MLB-designed system that is entirely separate from the current structure of MiLB, the financial barriers that impede independent league teams joining affiliated baseball would likely be eliminated. If there is a fee to join the MLB development system, it would logically apply equally to independent and affiliated teams.

Similarly, MLB’s current plans for realignment have largely focused on adjusting current league and classification structures. In a blank-slate approach, it is possible that Class A and Double-A teams with excellent facilities, strong ownership and advantages of geography could end up moving up in classification while other teams are moved to lower levels.

If MLB’s main desires for the minor league partners revolve around quality facilities, quality ownership and geography as they have often stated publicly, there are a number of additional independent league clubs that would likely fit in a redesigned minors. That could mean that affiliated teams who expect to be part of a 120-team MiLB system could find themselves pushed out.