MLB’s plan to reduce the amateur draft goes far beyond this season

Reports of Major league baseball (MLB) reducing the amateur player draft to just five rounds should come as a surprise to nobody. Token opposition from the players’ association (MLBPA), the stated goals of MLB to permanently reduce the draft to 20 rounds and eliminate affiliated minor league baseball (MiLB) in 42 cities, and the pandemic with resulting cancellation of sporting events across the nation have combined to give MLB owners just the excuse they need to take control over their minor league affiliations, with little standing in their way.

MLB claims that they need to save money due to lost revenues this year. That is one factor, but it’s not the only- nor even the biggest reason for the power play that will result in hundreds of amateur players losing their signing bonuses this summer.

Downsizing the amateur draft is at the core of MLB’s plan to reduce the number of affiliated minor league teams. While eliminating signing bonuses for rounds 6 through 10 will save an average of just under $ 1 million per MLB team, this is a demonstration of power to the players as they begin to negotiate a new collective bargaining agreement.

Equally important, the Professional Baseball Agreement (PBA) between minor league teams and major league baseball is due to expire after the 2020 season, with the strong likelihood that there will be no games played in minor league towns this summer.

MiLB has come to the realization that they can not win a battle with MLB to prevent them from reducing the number of affiliated teams from 160 to 120, cutting ties with 42 teams. All that’s left on that issue is to negotiate terms, maintaining informal ties while letting MLB save face and claim that they’re not killing baseball in those towns.

But there’s more. MLB wants more control over the operation of minor league teams. MLB Commissioner Rob Manfred would like to move MiLB headquarters from St Petersburg, Fla, into MLB headquarters in New York. From there, MLB would control the marketing, sponsorship and other legal matters for the minor league affiliates, while essentially leasing the franchise rights back to MiLB owners, who pay for the facilities to host baseball in 120 towns.

The plan is not new, but has received very little attention in the sports media. Maury Brown wrote for Forbes about the downsizing plans before the 2018 season, when MLB and MiLB banded together to lobby congress for an exemption to minimum wage laws for minor league players. On April 21, 2020, they released a joint statement denying a report that any deal was done to contract minor league teams.

As Baseball America reports, “MiLB has signaled its understanding that the current player development contracts by which MiLB teams and MLB teams reach affiliation agreements will be modified to give MLB teams greater control over choosing their affiliates.“

JJ Cooper provided important details of the PBA talks, in this Baseball America article (subscription required, and highly recommended).

MLB’s pitch is that they can wield greater marketing leverage which would increase revenues and franchise values while reducing costs for MiLB operations. MiLB would like to keep their club control and community outreach local.

MLB presently pays the salaries of players and coaches while MiLB handles the day to day operations of running their teams, including upkeep of the facilities, often with financial support from local taxpayers. There is much more at stake this year than the cost of some amateur signing bonuses.

By reducing the size of the draft, which MiLB has no control over, MLB has no need for rookie league affiliates, other than their own complex based camps in Florida and Arizona. The salaries for players and coaches in those 40 to 42 teams would save each team another $350,000 to $500,000 per season. That is annual savings for clubs that would offset the cost of increasing salaries for minor league players on affiliated rosters.

Imagine that you own a minor league team, somewhere in middle America.

- Your season has been canceled due to the pandemic.

- The amateur draft which supplies players to your club has been cut by 88 percent in 2020, and next year’s draft has been cut in half with full agreement of the players’ association.

- MLB could arrange for some games this summer to continue the development of players, but you’re not part of the discussion.

When MLB, holding a historical exemption from anti trust laws and a new exemption from minimum wage laws, tells you that they don’t need 2,000 players per club on 160 affiliated minor league teams, and they want more control over your operations, what choice do you have?

MLB wants to choose which 120 MiLB teams will be affiliates, and which are cut loose and pretty much the terms of your team’s affiliation with MLB, if any. They already dictate what players go where, how much they are paid,

Manfred has been MLB’s chief negotiator since 2002. Prior to becoming commissioner, he led MLB’s negotiating team in CBA talks that resulted in owners clawing back gains that the players had made in successive rounds of negotiations. They now have a de facto salary cap in the form of a luxury tax structure, a hard slotting system for amateur draft bonuses, and hard limits on international free agents bonuses. Revenues have soared while player salaries have leveled off and even declined this past season.

Many gains have been made at the expense of amateur players who are not yet members of the association, and have no representation in making the rules. Thus, it is no surprise that amateur players were thrown under the bus in order to guarantee players a $170 million payment from MLB, which they will receive whether or not there is a baseball season in 2020.

A five round draft is not entirely a done deal just yet. The draft was cut to five rounds through agreement with the players, and they could still reach an agreement to increase the number of rounds. But it’s difficult to see the players giving up anything for the benefit of amateur players, and Rob Manfred doesn’t give up anything for nothing.

MLB signaled a willingness to go more than five rounds, by offering the players a ten round draft, provided that they cut the bonuses in half for rounds 6 through 10, and limited clubs to five undrafted players signed to $20,000. The players rejected that, in part because it would set a precedent of reopening the March agreement, which the owners now want to crack open to discuss player salaries in the event of games being played without fans in attendance. If there’s going to be baseball this season, negotiations will be reopened.

The MLBPA has taken a stand on behalf of amateur players in the past. During negotiations for the current CBA, MLB had offered to eliminate payment of compensation when players signed as free agents with a new club. The price was implementation of an international draft. A contingent of hispanic players intervened, as the proposal would have left international players at the mercy of one club, with virtually no bargaining leverage.

The result is hard bonus limits for international free agent players. Having an international draft remains high on the owners’ wish list, right where Bud Selig left it, and some elite free agent players find themselves without a contract into the late spring.

The players could surely strike a much fairer bargain for the 2020 amateur draft if they’d agree to an international draft. This seems inevitable in the next round of talks, even if the owners have to agree to guaranteed bonuses based on a slotting system. But this is one of the players’ most valuable bargaining chips, and they’re not likely to spend it for a few hundred amateur players’ bonuses this summer.

While MLB owners are using lost revenues this season as an excuse to cut amateur player bonuses, and the MLBPA replies that things could be worse- with no draft at all this summer, the bigger story is the permanent structural changes coming to the relationship between MLB and it’s Minor league affiliates.