How Government Devastated Minor League Baseball –

This Sunday FunDay is for the family at Coney Island’s Maimonides Park. Home of the Brooklyn Cyclones, it’s Family Sunday FunDay. Enjoy the close-up views of the future New York Mets players and contests between innings involving potato bags for just $18 They can also run the bases in the post-game heat if the children don’t become wilting from the heat of mid-July. This is minor league baseball at it’s most affordable and corny.

The scene at Richmond County Bank Ballpark, seven miles from New York Harbor’s mouth is much more grim than the one seen there. Gawky, invasive weeds grow through the neglected outfield dirt and mangy grass once home to the Staten Island Yankees. A dumpster with an excess of garbage is located just above the right-field chain link fence. It was once a path to the Ferris wheel, worth billions of dollars. Now it’s just a patchy shelter with cardboard walls. Let’s Not eat here,” a mom says to her picnic-impatient 6-year-old.

Like too many other things in New York City and the five boroughs’ lives, New York City’s minor league stadiums have had a divergent fate. It is also a warning sign about government and business going mad. It spent $71million on a beautiful stadium at Staten Island’s waterfront. Maimonides was $55 million. The facility now sits empty after two decades. In an effort to lure baseball back, the city is throwing another $8 million towards cleanup costs.

People elected to care for taxpayer funds are realizing the irony behind the famous quote from the nostalgic film of baseball. Field of Dreams“If you make it, they will follow.” Sports businesses become landlords when the government becomes landlords. They start to behave like tenants, always looking for better deals. You can’t make them leave if they don’t like it.

However, this particular tale transcends Gotham, the ever-present temptations to cut ribbons in local politics, and it is not limited to Gotham. The Staten Island Yankees were one of 40 minor league clubs—25 percent of the nationwide total—that were cut off overnight from their major league affiliates in December 2020. Local governments found themselves suddenly responsible for quarter-billion dollar worth of investments in venues that had stopped hosting events. The main perpetrator was the Cost-Cutting Major League Baseball (MLB), but the federal government as well as the Judicial Branch had their stamps all over this murder weapon.

Washington has given MLB the freedom that no other professional sports enjoys over the last century. This is due to a combination of congressional camera hogging and obfuscating patriotism. Baseball’s preeminent global league has not only blocked all halfway serious competition to its legally protected North American monopoly; it can dictate the most fundamental of operational details—employee salaries, game rules, even existence—to the once-independently owned professional teams and leagues that groom talented young men in the vast expanses between school and The Show.

Following the announcement by MLB that his team would be axed, Jeff Katofsky, Utah’s Orem Owlz owner, said to ESPN, “It’s all about controlling industry.” “It’s all money and power.”

Legislative power holders are proposing more money to make up the gap in the bush-league budget, through the $550 million Minor League Baseball Relief Act that was introduced in June 2021. It would also extend federal codependency.

However, there are two developments that could signal a break in this pattern. In April, Republican senators were outraged at MLB’s decision to move the All-Star Game from Atlanta as a protest against Georgia’s new GOP-written electoral law. They introduced legislation that would penalize baseball for some of its legal carve-outs. It is more likely that the Supreme Court unanimously voted in June to review an antitrust exemption former 9th Circuit Court Judge Alex Kozinski called “one of the most pervasive anomalies in federal law.”

These are only a few possible paths to escape this corporate game of pickle. However, there are important lessons that can be learnt from looking back at the policy errors that cost the taxpayer billions of dollars while leaving the minor leagues stranded.

The Senate as a string quartet

Rob Manfred was the MLB Commissioner in the early 2018 and he put the pressure on 160 owners of minor league baseball teams. He told them to lobby Congress for passage of the subtly named Save America’s Pastime Act or risk dire consequences.

Multi-franchise owner Dave Heller told ESPN that if the legislation wasn’t passed, he would have to see us down the barrel. We were all motivated tremendously to see that MLB passed this legislation. Two of Heller’s four MLB franchises were dissolved in December 2020.

The press release from sponsor Rep. Brett Guthrie (R–Ky.) The 2016 bill’s sponsor, Rep. Brett Guthrie (R-Ky.) warned that the bill would not be passed because “the cost to support local teams will likely increase dramatically” and cause significant reductions across the league. This could threaten the Primary pathway to the Majors, and put teams in danger.

Save America’s Pastime Act modified the 1938 Fair Labor Standards Act in order to provide an exemption for minor league players. This meant that no overtime would be paid during the season, and there wouldn’t be any cash available during pre- or post-season team workouts. Franchises can retain players for as little as $1,100 per month, instead of the federal minimum wage. This could be for 3 to 5 months.

This was sold to legislators by minor league owners as a way to keep community ties alive in non–major metro areas like Charleston, West Virginia, and Burlington, Vermont. In reality, it was just a power grab of the MLB owners in some of the largest markets in America. It is necessary to briefly explain the history of the relation between major and minor leagues in order to understand the reasons.

Baseball as we know it derives from ball-and-bat game variations developed in the mid–19th century in Philadelphia, Connecticut, Massachusetts, and especially New York City. You could find clubs with varying levels of formality as well temporary teams or leagues. Eight-team National League emerged in 1876. They quickly gained a reputation as being the best organized ball league. In 1901, an eight-team American League star was formed. With a short detour, they established an organizational truce.

But, “minor Leagues” changed dramatically during that time and are now almost unrecognizable. Bill James, author of “The Minor Leagues” wrote that they did not begin as what they are today. Historical Baseball Abstract by Bill James. “By a series of actions, agreements, inducements, and rewards, minor leagues were diminished in small degrees from being independent sovereignties to vassal state, which exists only to meet the needs of major-league baseball.”

Some teams and leagues held on to players as great as all-stars in the National League or American League. Lefty Grove was the International League’s greatest starting pitcher until his 24th season. He is now a Hall of Famer. Joe DiMaggio, a 21-year-old professional baseball player who was known for his ability to play at an elite level for the San Francisco Seals of the Pacific Coast League at the time he arrived in New York with a full roster.

James in his book keeps a decade-by-decade tally of how “free” and “unfree” the minors were vis-à-vis the big leagues. They were free 100 percent in 1870s, 1880s, and 1900s. The free/unfree ratio was 90/10. In the 1930s they had only 30 percent freedom, but it ended in 1970 when minors became “100% slaves of the majors.” James pointed out that “1915-1925” were the critical years for the change.

Was it the end? What happened then?

The high court entered unanimously in 1922 by Justice Oliver Wendell Holmes. Federal Base Ball Club of Baltimore, Inc. against National League of Professional Base Ball Clubs, Inc., et. al. held that Major League Baseball was exempt from the Sherman Antitrust Act of 1890—and therefore legally free to buy out half of the upstart 1914–15 Federal League, then shut the whole operation down—because the business of holding baseball contests between teams from different states somehow did not qualify as interstate commerce.

Let’s forget about the theory of antitrust. We need to consider the actual consequences. Independent minor leagues and ambitious international initiatives such as the Mexican League tried to recruit high-quality MLB players after World War II. They knew that organizations could face severe penalties if they are perceived to be in danger to the monopoly, or deviant from their desires. For five years, players who moved to the Mexican League were banned from the MLB. This policy led to more lawsuits that further strengthened the antitrust exemption. Players in minor leagues of professional sports, like the National Hockey League are allowed to organize, which gives them better wages and working conditions.

For a half-century before the December 2020 minor league contraction, the basic organizational relationship between the minors and the majors was this: Each of the 30 MLB franchises was aligned with five or six minor league affiliates of various levels that would develop and manage the not-ready-for-prime-time players that the big clubs had acquired via trade, free agent signing, or amateur draft. These affiliates were often owned by their own owners, and operated under multiyear contracts. But the personnel decisions—and, relevant to the Save America’s Pastime Act, the salaries—were determined and covered by the parent MLB club.

As minor league owners were telling sob stories about how they needed to limit payroll costs in order for their teams not to disappear, Capitol Hill lobbyists were advocating for MLB franchises that earned an average of $330 million per year. Congress was asked for assistance to keep minor league salaries within the $4,000-14,000 range. However, while Congress was asking Congress to do so, those who signed those checks were receiving minimum MLB salaries of half a billion dollars.

Federal legislative processes being what they are, the Save America’s Pastime Act with no fanfare was attached to page 780 of an 891page, $1.3 Trillion Omnibus Spending bill. It was passed and signed by President Donald Trump on March 2018.

America’s favorite pastime was not saved, unfortunately. MLB had already frogmarched minor-league owners to threaten contraction and warn lawmakers that the salaries would be cut. It took seven months for MLB to start leaking names of minor league teams it was going to kill anyway. Ted Tornow (Clinton, Iowa) LumberKings general manger), stated to ESPN in 2020 that the MLB played the Senate “like a string quartet”.

Sometimes instruments don’t like being used as tools. Sen. Chuck Schumer (D–N.Y.) Sen. Chuck Schumer (D-N.Y.) had played a crucial role in getting the Save America’s Pastime Act included into the Omnibus. However, the hatchet fell on several New York minor league baseball teams just two years later. Schumer complained late 2020 that “they can’t just pick it up and walk off.” Au contraire, Chuck.

Gorsuch Opening

Herbert Hovenkamp (antitrust scholar) stated that there are “good arguments to get rid of baseball’s long-standing exclusion from antitrust laws.” Pro MarketIn May, University of Chicago’s Stigler Center created the website. But the reason Republican Senators are angry about MLB’s reaction to Georgia’s new voter laws is not one of them.

Major League Baseball declared that its planned mid-summer All-Star games would be moved from Atlanta in protest at Georgia changing its voting laws. Conservatives found it offensive that there was a combination of media panic, cancel culture and progressive power over large business. As he can be counted on to do in such situations, Sen. Ted Cruz (R–Texas), stepped up to the plate, or at least the microphone.

Cruz spoke two weeks later while Cruz introduced the Competition in Professional Baseball Act. Cruz explained that Major League Baseball will ask for ID to pick up tickets from will-call. But, Cruz also stated that they opposed photo ID requirements to vote. Major League Baseball shouldn’t be expecting to continue receiving special benefits from Congress, if it acts dishonestly by spreading lies about Georgia’s voting rights bill in favor of one side.

Modern politicians using legislation to penalize political behaviour of corporate entities is both strange and not surprising. Nevertheless, the generally more serious Sen. Mike Lee (R–Utah), another co-sponsor of the bill, was on firmer footing when he asserted at the same press conference that MLB “has used its judicially fabricated antitrust immunity to suppress wages and divide up markets for decades—conduct that is plainly illegal, and sometimes criminal, in any other industry.”

This magazine has debated the case against baseball’s antitrust laws for 52 years. Too often, antitrust is determined by politics, applied too frequently to non-monopolies and too often sought out and played by regulatory entities in order to consolidate their market share. These criticisms do not fit well into the history of Major League Baseball. It is better to argue philosophically that the government does have no right to interfere in the affairs monopolists.

MLB: The Case Exclusivity from antitrust, on the other hand, is so flimsy that few bother making it. Even the Supreme Court seems to be ignoring the precedent.

Near the end of its 2020–21 term, SCOTUS ruled 9–0 that the National Collegiate Athletic Association (NCAA) could no longer prohibit universities from compensating their sometimes highly revenue-generating athletes. Because of its non-commercial, societally significant objective of upholding amateurism, the NCAA claimed that price fixing for student-athlete labor should not be subject to Sherman Antitrust Act.

Justice Neil Gorsuch made the non-routine move of reading from an amicus short, submitted by Advocates for Minor Leaguers. They had requested that the Supreme Court consider baseball as an example, while refusing to grant an exemption from the Antitrust Laws for “a group of thousands [of workers] based on an outdated understanding of their workplace”

Gorsuch said, “To make sure,” “this Court has once flirted with what looks somewhat like an antitrust exemption to professional baseball.” In [the Federal Baseball case] the Court reasoned that ‘exhibitions’ of ‘base ball’ did not implicate the Sherman Act because they did not involve interstate trade or commerce—even though teams regularly crossed state lines (as they do today) to make money and enhance their commercial success….But this Court has refused to extend Federal Baseball‘s reasoning to other sports leagues—and has even acknowledged criticisms of the decision as ‘unrealistic’ and ‘inconsistent’ and ‘aberration[al]”

In addition to spotlighting the shakiness of the MLB precedent, Gorsuch suggested that it may soon be vulnerable to challenge: “Whether an antitrust violation exists necessarily depends on a careful analysis of market realities….If those market realities change, so may the legal analysis.”

Harry Marino was the executive director at Advocates for Minor Leaguers. He responded with jubilation: “I think today’s decision signals that the Supreme Court’s current composition is a substantial skepticism regarding baseball’s antitrust exclusion.” Their antitrust opinion was a section I took as an invitation for litigants to bring the matter before the court.

Senne v. MLBThe exemption could be challenged by a class action suit brought in 2014 seeking wages back for minor-league players. It was able to withstand an MLB effort to have the Supreme Court decertify the litigating group in October 2020.

Independence Day

Some minor league owners have begun to make tentative steps towards independence from the MLB Borg. In 1998, the Atlantic League was established as the first independent circuit for minor leagues. It is a repository in smaller markets of big-league injury stories and washouts. The Atlantic League’s number of teams has increased from 4 to 8 since the MLB forced them to contract. An investment group on Staten Island hopes to turn Richmond County Bank Ballpark into Team No. 9.

Pecos League was founded in 2011, followed by the Pacific Association (2013) and the Empire Professional Baseball League (2016). The United Shore Professional Baseball League (2016) came next. They have all gorged themselves on the teams that were left behind. Three other ex-minor league baseball groups, including the Pioneer League and Frontier Leagues, have become independent. However, they still maintain a general partnership relationship with MLB to help them implement experimental rules changes.

There may be small-city baseball that isn’t affiliated with MLB teams. It will offer a level of play comparable to the NCAA, but less than Yankee Stadium. It’s impossible to know. It is certain that the government’s financial aid will not speed up discovery.

As with so many forms of government intervention in business, the Minor League Baseball Relief Act will mainly benefit incumbents. The $550 million it would pay to 120 teams affiliated to deep-pocketed MLB clubs, along with the 40 who were disaffiliated as of December 2020, is for the minor league baseball relief act. The impact on long-standing leagues and independent teams would be significant.

The single most important thing lawmakers could do to promote baseball is to stop forcing non–baseball fans to subsidize the sport. While pulling the plug for minor league baseball franchises, the MLB commissioner explicitly stated that the current smaller number of affiliation deals will be reevaluated to ensure that modern stadium facilities are available. Manfred created artificial scarcity to encourage cities to be competitive with one another via tax-funded stadium construction and maintenance. This will eliminate the need for MLB owners or their freight to cover costs. You should invite him to have a churro.

Studies after studies have shown that subsidies for sports facilities do not translate into increased taxes revenue. The Los Angeles Rams baseball team and the MLB’s San Francisco Giants show that professional teams paying for their stadiums have some of the most stunning ones. There is also an incentive to remain in the area and make improvements.

Let us cheer, if so inclined, on minor leagues that are able to live or die on their terms. Perhaps one or more independent leagues will be so successful, devoid of both the MLB mandates and Chuck Schumer’s meddling, that it attracts national attention. That would create an incentive to commercially successful owners who want to build their stadiums. If They build it, they might just stay.