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(Think Progress)   Minor league baseball players sue over minimum wage violations. Apparently MLB was preparing them for the day they got drafted by the Houston Astros   (thinkprogress.org ) divider line
    More: Fail, Major League Baseball, minor leagues, Minor league baseball players, unfair business practices, Courthouse News Service, UPC, farm system, FanGraphs  
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741 clicks; posted to Sports » on 14 Feb 2014 at 9:42 AM (2 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



18 Comments     (+0 »)
 
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2014-02-14 09:48:43 AM  
FTFA:
In the lawsuit, former players Aaron Senne, Michael Liberto and Oliver Odle, say that teams often pay players less than $7,500 per year while requiring unpaid work in violation of federal wage and labor standards.

As a comparison, the "unpaid" NCAA athletes receive around $10,000 or so in "housing allotment" money which is unrestricted money they get as a check they can use for whatever they want.  So, basically, these baseball players are making less money than NCAA athletes, even if you don't count the athlete's scholarships.  That's how horrible the pay is in the minor leagues.
 
2014-02-14 10:04:57 AM  
$7500 a year (well 6 months or whatever the season is)? Holy fark that is low.
 
2014-02-14 10:18:41 AM  
This has the potential to be a big lawsuit with wide ranging repercussions. Baseball's labor disputes and negotiations are at the leading edge of sports labor law.
 
2014-02-14 10:33:07 AM  

machoprogrammer: $7500 a year (well 6 months or whatever the season is)? Holy fark that is low.


Plus unpaid work in the offseason.
 
2014-02-14 11:07:50 AM  

red5ish: This has the potential to be a big lawsuit with wide ranging repercussions. Baseball's labor disputes and negotiations are at the leading edge of sports labor law.


By far the best union in sports. Football players seem to get pantsed by the owners at every opportunity.
 
2014-02-14 11:10:23 AM  

red5ish: This has the potential to be a big lawsuit with wide ranging repercussions. Baseball's labor disputes and negotiations are at the leading edge of sports labor law.


Plus, MLB looks terrible if they fight it.  MLB franchises can't find $1M annually to pay 40 or so guys in A-ball ~$25K each?

From Forbes:
"On average, the top 20 teams are worth $21.2 million and pulled in $9.8 million in revenue per team, of which 49% came from tickets. The great economics of the minor leagues: Player costs-typically between $10 million and $15 million a season for scouting, salaries and bonuses-are paid by the big league affiliates. As a result, margins for clubs that draw well are often fat, and these 20 clubs generated average operating income (earnings before interest, taxes and depreciation) of $3 million."
 
2014-02-14 11:23:37 AM  

Orgasmatron138: By far the best union in sports. Football players seem to get pantsed by the owners at every opportunity.


Yup.  And with the MLB disputes, public opinion tends to be muddled by the "millionaires vs. billionaires" scenario.  The 2014 minimum salary in MLB is $500K, and even if you have a pretty short career at that level, you should be able to sock enough away to plan your next career.

But the vast majority of these guys in A-ball will never make it to even AAA, and their earning potential as a player probably stops at 24-26 or earlier if no path to the majors becomes visible.  The clubs make good money off tickets, parking, refreshments, etc. for minor-league games and the highly skilled labor (statistically speaking, the best person on your high school team probably did not get drafted by any MLB team) deserves a reasonable share of that.
 
2014-02-14 11:24:14 AM  

chimp_ninja: red5ish: This has the potential to be a big lawsuit with wide ranging repercussions. Baseball's labor disputes and negotiations are at the leading edge of sports labor law.

Plus, MLB looks terrible if they fight it.  MLB franchises can't find $1M annually to pay 40 or so guys in A-ball ~$25K each?

From Forbes:
"On average, the top 20 teams are worth $21.2 million and pulled in $9.8 million in revenue per team, of which 49% came from tickets. The great economics of the minor leagues: Player costs-typically between $10 million and $15 million a season for scouting, salaries and bonuses-are paid by the big league affiliates. As a result, margins for clubs that draw well are often fat, and these 20 clubs generated average operating income (earnings before interest, taxes and depreciation) of $3 million."


Not to mention the 40 or so guys in Rookie Ball, and Short-Season A, and Advanced A, and Double-A, and Triple-A.

So, you are probably looking at a couple hundred players, not 40. Your point in general is valid, but a tad disingenuous. Also, there are a lot of minor leagues.
 
2014-02-14 11:36:57 AM  

chimp_ninja: Orgasmatron138: By far the best union in sports. Football players seem to get pantsed by the owners at every opportunity.

Yup.  And with the MLB disputes, public opinion tends to be muddled by the "millionaires vs. billionaires" scenario.  The 2014 minimum salary in MLB is $500K, and even if you have a pretty short career at that level, you should be able to sock enough away to plan your next career.

But the vast majority of these guys in A-ball will never make it to even AAA, and their earning potential as a player probably stops at 24-26 or earlier if no path to the majors becomes visible.  The clubs make good money off tickets, parking, refreshments, etc. for minor-league games and the highly skilled labor (statistically speaking, the best person on your high school team probably did not get drafted by any MLB team) deserves a reasonable share of that.


The only sketchy part of the article is where they gloss over the lower-earning teams. The single A ball club near me has changed affiliations 4 or 5 times in my life (I'm 35), and only recently has become even moderately successful; mainly because they invested in really making the ballpark a nice place to be. I've heard the office staff doesn't make much money, though.
 
2014-02-14 12:01:22 PM  
I've always wondered why players in the minor leagues dont get to be in the mlbpa. As stated above it is the most powerful union in sports.
Especially since mlb is still antitrust exempt and doesn't want to lose that status.
 
2014-02-14 12:25:38 PM  

chimp_ninja: But the vast majority of these guys in A-ball will never make it to even AAA, and their earning potential as a player probably stops at 24-26 or earlier if no path to the majors becomes visible.


A guy from my high school was a great baseball player.  Last time I saw him he was still in AA or AAA ball.  He was 25 at the time.  It was over Christmas time and we were playing together in an alumni basketball tournament.  Between games a bunch of us went to a bar and we were talking about his career.  I asked if he thought he'd ever make it and he said, "No.  If I haven't by now, I never will."  Had his professional debut that April and played in the majors for 11 years.

//CSB
 
2014-02-14 01:02:27 PM  

krej55: I've always wondered why players in the minor leagues dont get to be in the mlbpa. As stated above it is the most powerful union in sports.
Especially since mlb is still antitrust exempt and doesn't want to lose that status.


It's in the MLB players' best interests to exclude the minor leaguers from their union. They don't want to have to split up that pie any more than it already is.
 
2014-02-14 04:04:34 PM  

meanmutton: krej55: I've always wondered why players in the minor leagues dont get to be in the mlbpa. As stated above it is the most powerful union in sports.
Especially since mlb is still antitrust exempt and doesn't want to lose that status.

It's in the MLB players' best interests to exclude the minor leaguers from their union. They don't want to have to split up that pie any more than it already is.


meanmutton has summed it up neatly. The MLBPA not only doesn't represent minor league players, it has a history of screwing them to keep the money coming to its members.
The current situation doesn't have to do with unionization however, it goes to minimum wage laws.
 
2014-02-14 06:33:50 PM  

chimp_ninja: red5ish: This has the potential to be a big lawsuit with wide ranging repercussions. Baseball's labor disputes and negotiations are at the leading edge of sports labor law.

Plus, MLB looks terrible if they fight it.  MLB franchises can't find $1M annually to pay 40 or so guys in A-ball ~$25K each?

From Forbes:
"On average, the top 20 teams are worth $21.2 million and pulled in $9.8 million in revenue per team, of which 49% came from tickets. The great economics of the minor leagues: Player costs-typically between $10 million and $15 million a season for scouting, salaries and bonuses-are paid by the big league affiliates. As a result, margins for clubs that draw well are often fat, and these 20 clubs generated average operating income (earnings before interest, taxes and depreciation) of $3 million."


Minor league teams don't actually pay players at all, to my understanding. The parent club pays them. If you run the Iowa Cubs, you just have to pay for the ballpark (and upkeep of said ballpark), the ballpark staff (concessions, tickets, security, merchandise, etc.) and the uniforms. That's why owning a minor league team is basically free money if you have a good fanbase and a nice lease agreement. The downside is that you have no real control over the players and coaches, you don't determine if they get promoted/released/whatever. They basically just play on your field.

Further complicating this issue is signing bonuses. When players are drafted, they're given a bonus. The first rounders can have a bonus in excess of a million dollars (first few picks worth multi-millions). Some of them sign for well under that do to various leverages the team might have. But even a tenth round pick comes with a slot value of 135k. Guys in the later rounds sign for less (the Indians signed Joey Wendle, who was a graduating senior with zero leverage because he couldn't come back for the draft in later years, for a mere 10k), but the parent clubs will argue that those signing bonuses are basically the players' main source of income for their minor league seasons. They can argue that minor leaguers can expect to play 2-4 years in A ball or lower, and are basically told to invest it beforehand to make it work.

They're also going to argue that the team provides travel, lodging (on the road) and meals. The players will have a tough road on this lawsuit. The main hurdle whether they get classified as seasonal help. I side with the players on that one. They're often shuttled to Arizona or the Dominican for winter leagues, and they're expected to keep in shape in the off-season, attend team meetings, and go to spring training. It's a year-round job, they shouldn't be classified as seasonal workers. I also think that they should be paid more.
 
2014-02-14 07:20:03 PM  
Why bother keeping A and maybe even AA-ball teams if you're the MLB teams and you need to start paying them?

I agree they should be paid more...but then they're making themselves ripe for elimination.

/people need to realize that these teams, for the most part, don't even make money as it is
 
2014-02-14 11:04:02 PM  
IAmRight: Why bother keeping A and maybe even AA-ball teams if you're the MLB teams and you need to start paying them?
The affiliated MLB club (the club that has the current Player Development Contract (PDC) with the minor league club) pays the uniformed personnel (players and coaches) already.  The lawsuit, among other things, seeks damages for Fair Labor Standards Act (FLSA) and overtime violations. Minor league players are being paid less than minimum wage.
Teams invest in minor league farm systems in order to develop players for the major league club. This is the most cost effective method of improving the MLB club's personnel, and medium to smaller market clubs are competitive to a large degree depending on the quality of their farm system. 

I agree they should be paid more...but then they're making themselves ripe for elimination.
Last year (2013) there were 176 affiliated Minor League Baseball teams. Some make quite a lot of money and others struggle and are sold. There is no shortage of buyers. There are also a large number of unaffiliated "Independent" minor league teams. None of these teams are charity cases. 

/people need to realize that these teams, for the most part, don't even make money as it is
That's not true. If they don't make money they get sold (the players and coaches are not employed by the minor league affiliate - they are employees under contract to the MLB club). Better businessmen buy the teams and make money. The PDCs are agreed to every two or four years. If the MLB club doesn't like the way a minor league team is operating they can pull the players and coaches and move them to another team. If the minor league team doesn't like being affiliated with their current MLB team they can be reassigned.

The reason this lawsuit is interesting is because they are seeking a class action, and because it addresses some basic issues relating to MLB's treatment of minor league players. It's overdue.
 
2014-02-15 12:43:23 PM  

lacydog: Minor league teams don't actually pay players at all, to my understanding. The parent club pays them.


The parent club only pays the salaries of players who are on the 40-man roster. The majority of minor leaguers are not. That's why, when a player is added to the 40-man, you read in transactions that the club purchased his contract.

Now, in many cases the MLB club owns the minor league team outright, but the transaction is the same.
 
2014-02-15 02:03:20 PM  

bubbaprog: lacydog: Minor league teams don't actually pay players at all, to my understanding. The parent club pays them.

The parent club only pays the salaries of players who are on the 40-man roster. The majority of minor leaguers are not. That's why, when a player is added to the 40-man, you read in transactions that the club purchased his contract.

Now, in many cases the MLB club owns the minor league team outright, but the transaction is the same.


No, under the PDC the MLB club pays the salaries of all uniformed personnel (players and managers). The MLB club drafted and signed the players and they pay them. Putting them on the 40-man roster by "purchasing their contract" moves the players from their minor league contract to a major league contract, which, among other things, means that they are then covered by the MLBPA.
 
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