Rags to Riches: How MLB Talent Aided Minor League Ballplayers in Attaining Livable Salaries
By Victor Zeidenfeld
Baseball has been a core component of American culture for over 100 years. However, America’s pastime was in great danger this past winter. The Competitive Balance Agreement (CBA), which ensures equitable standards for contract negotiations and playing conditions, expired; new negotiations were needed between the player’s union (MLBPA) and the franchise owners. This offseason, negotiations were drawn out, eventually delaying the season. This postponement caused aggravation amongst many fans who considered the dispute a rich-versus-rich battle, but the players quickly shut down this idea and claimed to fight for minor league ballplayers.
Major League Baseball (MLB) players had a chip on their shoulders during this CBA negotiation: every athlete who has the opportunity to play in the MLB knows the rough journey to the big leagues. The wages paid to minor league players are minimal, and the long season causes many MLB hopefuls to lose confidence. Developments such as the pandemic caused minor league players to be laid off, making it more of a gamble than ever to pursue a career as a professional baseball player. Jeff Passan, an insider for ESPN reported in May 2020 that “hundreds of minor league baseball players were cut [...] and hundreds more are expected to lose their jobs.” For the sake of the game, this CBA negotiation period would provide more of a push than ever from the MLBPA.
The baseball industry is a monopsony, as there is one organization that controls all of the labor for the industry—the MLB. This creates both rough negotiation terms for workers and limitless power to franchise owners. Importantly, though, the CBA has excelled at providing great working conditions for those to make the big leagues. Every few years, there are record-breaking contracts that set new precedents regarding what elite-level talent should make. The MLBPA, on the other hand, has done minimal for minor league players in the past in regard to offering negotiating power or job safety.
Contracts are essential for comparing the differences between major and minor league compensation. At a minimum, an MLB player is guaranteed a prorated salary of $700,000 throughout a 162-game season, allowing players to live comfortably. The best Major League players can sometimes negotiate multi-year contracts with an average annual value of over $30 million. For instance, Bryce Harper made history during the 2019 offseason by signing with the Philadelphia Phillies for $330 million over thirteen years. Such a signing set a precedent for other top-level talents to have a huge payday. Later in the 2019 offseason, Mike Trout signed a $426.5 million extension over twelve years, meaning he brings home an average of about $35.5 million a year. Groundbreaking contracts like this shadow the abysmal salaries paid to minor league players, with the average salary for a triple-A player in 2018 being a mere $15,000.
There are always developments where a minor league player is traded and surges onto the scene with a different ballclub at the professional level. Luke Voit played a mere 70 games by his age 27 season with the St. Louis Cardinals. He was sent to the New York Yankees in the middle of the 2018 season, where he posted numbers at the caliber of a Most Valuable Player (MVP). There are likely other players in the same tier as Voit awaiting their shot in the big leagues, but many players in a similar situation are limited to a more meagre salary when they are so close to earning multi-millions—and a simple stint in the big leagues will not cut it. Rookies are under team control for three years, where they earn $700,000 in the first year with small increases in years 2 and 3. If they manage a fourth year, they will have substantial negotiating power, as they are eligible for salary arbitration at this point in their career. In this case, both the player and team can submit a salary for the year, and a neutral party will determine which salary is reasonable. During this process the two parties can negotiate and avoid arbitration by settling on a contract. Only a select few have the opportunity to have a prolonged career at the major league level, and a four years of service is daunting to finally receive a payday that so many players deserve.
Triple-A is the highest level of the minor leagues, and its players are a small step below major league talent. The low salaries at this level further the minimal leverage minor league players have when negotiating a contract. The simple reason for this difference is the market power of the MLB. If the MLBPA didn’t challenge owners during CBA negotiations, it would be reasonable to expect more of the same. However, there was a groundbreaking change that offers more equitable salaries. Starting in the 2022 season, a minimum salary for players on the 40-man roster was implemented as shown in Table 1 below.
Table 1: Minor League Minimum Salary
Chart provided by SB Nation.
A part of the CBA agreement this past winter was the guarantee of higher salaries paid to some minor league talent. The MLBPA pushed for this change because many of the leaders in the MLBPA endured these conditions at the onset of their career. Players who belong to the 40-man roster of an MLB team are now guaranteed a certain salary that makes life as a minor-league player much more durable. However, only fourteen players on the 40-man roster are minor league players. Although this policy fails to help most minor league ballplayers, it is nevertheless a start at neutralizing the monopsony of baseball and the beginning of more equitable playing terms for all ballplayers. There is still more to accomplish for the players across the minor league system, but this is a significant victory for the MLBPA.
Now the question remains: where should the MLBPA go next? Many players are still undercompensated for their talents, and one way to address this shortcoming is to require a minimum salary for minor league players. By setting a price floor for labor in the baseball market, such a policy would likely lead to owners laying off more players. A change of this nature would do more harm than good, since so many players would be left behind while the remaining few received better compensation. Instead, the MLBPA should consider adding incentives where minor league players receive bonuses upon reaching a milestone, such as moving to a higher level in a franchise’s system. There could also be bonuses for a number of stats such as batting average, hits, homeruns, games played, innings pitched, and many others. Ultimately, an incentive system could reinvigorate the passion and motivation of countless players, prolonging the dream of playing in the MLB for many aspiring ballplayers.