Baseball owners and the players union avoided an elephant in the negotiating room as they hammered out a new collective bargaining agreement last week. Major league owners are swimming in pools of cash, and major league players are all millionaires by their second season at the latest. At the same time, the vast majority of minor league baseball players struggle just to make ends meet. As the two sides divvied up $10 billion a year in annual revenues, minor league players were completely left out of the equation.
Ten billion dollars works out to $333 million per franchise annually, not counting the value of MLB Advanced Media (MLBAM), the company pioneering streaming technology that was spun off from major league baseball, with each club owning a 1/30th share of the business. The company has annual revenues approaching $1 billion.
Major league baseball players are well paid, making a minimum salary that just got bumped to $535,000 for 2017. The average major league salary is $4.4 million per year. But until a player is on a major league roster, minor league salaries range from just over $1,000 per month in the first season to $2,700 per month for a three year veteran at the triple-A level.
The top North American prospects receive a signing bonus that is limited by baseball’s CBA based on a draft slotting system. A player chosen in the first 10 rounds receives a six-figure bonus, with bonuses ranging into the millions for first- and second-round picks. Players from other countries mainly sign as teenagers with negotiated signing bonuses. For the vast majority of players, that signing bonus is the only real money they will ever receive for playing baseball.
Minor league players have no union, but the major league baseball players’ association (MLBPA) bargained away their signing bonus rights through the CBA. They also bargained away the right of drafted players to sign major league contracts immediately, so they will be subjected to baseball’s restrictive minor league salary structure, usually for several years. Now, they’ve bargained for a hard salary cap on bonuses for international free agents.
Until a player is added to a 40-man roster, salaries are severely limited. Players work 60 to 70 hours per week, earning less than minimum wages. Many players live with host families in the communities where they are assigned.
Here is the pay scale for minor league players prior to free agency or being on a 40 man roster:
- First pro contract: $1,100 per month
- Rookie league/ Short season: $1150 per month
- Low A: $1,300 per month
- High A: $1,500 per month
- Double-A: $1,700 per month
- Triple-A: $2,150 per month, $2,400 second year, $2,700 third year
- The salary increases $50 per month each year when repeating a level.
- Players also receive a meal allowance of $25 per day while traveling.
- Minor league free agents can negotiate their own contracts, subject to the minimums above
At the federal minimum wage of $7.25 per hour for 40 hours per week, a person makes $1,257 per month. At $10 per hour, the monthly salary is $1,733. Students working summer jobs work fewer hours and earn more than most minor league baseball players.
Once players join a 40-man roster, called a major league reserve list, things improve modestly. The minimum yearly salary for a player on a 40-man roster was $41,400 in 2015, with a cost of living adjustment (COLA) each season. For players with at least one day in MLB, or in their second year on a 40-man roster, the minimum salary jumps to $87,600 under the new agreement.
Senne, et al. v. Office of the Commissioner of Baseball, et al., (3:14-cv-00608) is a nationwide law suit alleging that the minor league baseball salary structure violates the Fair Labor Standards Act and other state wage laws by denying players a minimum wage and overtime. The suit, which has been joined by over 2,000 players, was dealt a setback in July when a federal judge refused to certify the plaintiffs as a “class” for purposes of a class action, holding that their circumstances among the many states were too different to formulate a common cause of action.
Still, the suit is going forward on the basis that the salary structure which is imposed on the players violates the federal minimum wage laws. Many of the 7,500 minor league players are afraid to join the lawsuit, fearing that participation could hurt their chances of pursuing their dreams. A ruling in the players’ favor would help all minor league players going forward.
MLB claims they are not only exempt from anti-trust laws, but also the Fair Labor Standards act which sets minimum wages for workers. Their justification for their salary scale is offensive to any person with a sense of fairness. There is no justification for a multi-billion dollar industry not paying a fair wage to the vast majority of its’ employees.
MLB even introduced legislation in Congress, called the "Save America's Pastime Act" which would change Federal labor laws, carving out a specific exemption to the minimum wage laws for baseball players. Rep. Cheri Bustos, a congresswoman whose father was once MLB’s chief lobbyist, originally sponsored the legislation but withdrew her support.
Minor league players' salaries are paid by major league teams. Paying them just $10 an hour for 60 hours per week, with time and a half for overtime, would cost each team less than $3 million a year, or less than the average salary of one major league player.
Major league baseball does tremendous work through organizations such as the Jackie Robinson Foundation, the National Urban League, and the Boys and Girls Clubs of America. They support programs that help with literacy, physical education, medical research, and drug free programs. These are all fine programs and a credit to the sport.
But it’s time major league baseball did the right thing for their own employees. Every year thousands of young men forego their education and other career opportunities to pursue their dream of playing baseball in the major leagues. The vast majority never will.