NEWSLETTER
Minor League Baseball officially cancelled its season this week. The fact that it was a move we all knew was coming didn’t make it any less painful.
And the fact that we already knew massive financial challenges were coming doesn’t make the situation any less dire. In fact, it’s much, much worse than I thought.
"Dire straits."
"A Band-Aid on a hemorrhaging industry."
"There are many teams that are not liquid, not solvent."
Yesterday was a bleak day for Minor League Baseball.
But there is some sense of hope as the league turns to Congress for aid: https://t.co/26W67glNhq
— Baseball America (@BaseballAmerica) July 1, 2020
In short, without any kind of season, upwards of half of all MiLB teams are, in the words of MiLB President Pat O’Conner, set to be insolvent. That means, unless there is government help, the teams would have to sell if possible (most likely to MLB or its teams), or go bankrupt. Many would just disappear.
Because of the importance of Minor League Baseball to communities around the country, it is possible that government loans could help bridge this massive gap (upwards of 17 months with no revenue for many teams). We already know that, even if that happens, the volume of minor league teams figures to be chopped down dramatically in the upcoming MLB/MiLB agreement. And that reduction, alone, isn’t going to turn things around for MiLB at this point. Things are just that bad.
Scary stuff from BA and O’Conner:
Once the dust settles on that arena, the two sides are likely to meet again to discuss the particulars of what the minor leagues will look like in 2021. As part of MLB’s plan, each of the 30 big league clubs would have four full-season minor league teams and at least one more at its home complex in either Florida or Arizona.
That alone presented a sizable threat to the future of the league. The coronavirus has raised the stakes considerably.
“This threat from the coronavirus, it transcends any list that anybody wants to make with respect to the possibility of teams not being around in the future,” O’Conner said. “Deep into the 120, what are traditionally very strong clubs are in dire straits.”
That’s not only true for 2020 and 2021, but for even deeper into the future. O’Conner repeatedly referred to the financial situation MiLB faced in 2008 and 2009, when economic recession put financial pressure on many teams.
“I could see this (economic impact) lingering into 2022, 2023 easily,” O’Conner said. “In some cases, possibly a little longer.”
It’s not at all hard to imagine, now, that the originally-expected composition of the 120 surviving teams will change because of the pandemic, *and* the structure/ownership/operations of those surviving 120 teams will probably be very different. As much as we want all minor league teams to be thriving independent businesses (because, long-term, that’s what is good for the sport and those communities), it’s possible that many will have been so badly crushed by the loss of revenues this and next year that a total overhaul to the system is the only way this works.
Even that overhaul is still being figured out, because so many teams don’t know if they’re going to survive as affiliated clubs into next year, which means they can’t secure loans to continue operations through the offseason (BA). So it becomes just a terrible chicken and egg proposition: which teams survive the affiliate cut is related to which teams can survive the pandemic is related to which teams survive the affiliate cut is related to which teams can survive the pandemic … and so on and so on. As I sit here, I don’t even know how you resolve that challenge *without* a bunch of teams getting bought up on the cheap by MLB and/or its clubs, and *without* a bunch of teams going bankrupt. I hope there is a path forward, but I’m really, really worried for what that is.
None that stuff even gets into the biggest questions about what the whole structure of MiLB will look like going forward – are the leagues totally different? Are the levels totally different? Is MLB taking over MiLB operations? – but I can’t get my mind there until there’s more clarity about how many teams are even going to survive. This is just such a mess that it’s hard for me to clearly lay out the existential threats professional baseball in the United States is facing, particularly below the MLB level.
It remains more likely than not that some mostly-recognizable version of the Minor Leagues will be in place next year and beyond. But it’s crazy to think that, as of this writing, that’s not a guarantee. Moreover, even in the most realistic case where MLB proceeds with its plan to chop down affiliates to 120 (four per MLB organization), the pandemic is going to have created so much upheaval that the fundamentals of Minor League Baseball are nevertheless going to be changed in some previously unthinkable ways.
