MLB, MiLB, and Misaligned Incentives

Major League and Minor League Baseball have agreed to extend their Professional Baseball Agreement through 2020, per a press release from MLB today.

According to sources cited by Baseball America, “…the only significant change in the agreement is the tax rate on tickets that minor league teams pay major league clubs.” The tax rate adjustment is intended to reflect the status of the economy and save MiLB an estimated 2 million dollars over the next few seasons.

The adjustment is a good thing on its own, as MiLB could clearly use a boost in revenue. But, as Rob Neyer points out, so long as MLB and MiLB continue to operate as financially separate entities, yet purport to function with the same goal in mind, MiLB will be conducting business with misaligned incentives – the type of misaligned incentives that fail to provide the bottom tier of minor league players with acceptable living wages.

The collective bargaining agreements between the MLBPA and MLB are set up to protect (surprise) Major League players – in particular, the top tier of major league players. MiLB continues to function with the primary goal of player development, but operates as a more or less independent business, affording its players very little protection.

Either MiLB and MLB must function with their own independent, autonomous, players’ unions, or the two must merge with the agreement to treat all of their employees equally and fairly. Until MiLB adopts incentives consistent with its operating procedures, the overlooked masses who make the PBA’s agreement to “field at least 160 minor league affiliates” possible will be offered insulting compensation and very little security.

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