Baseball Teams Need to Pay Their Minor Leaguers a Fair Wage

by

The fact that minor leaguers make almost no money for their service rendered is not a secret. It also is not a new topic, but today ESPN reignited that argument with this horrible tweet (and an accompanying Darren Rovell article that I will not link to).

First let’s deal with the subject of this tweet. Tim Tebow is almost certainly not starving or hurting for money. He has his NFL contract, a $100,000 signing bonus from the Mets, endorsements, and whatever ESPN is paying him as a college football analyst. He doesn’t “need” the money, but by that same token, the Mets don’t “need” the money either. So this isn’t about Tim Tebow, but Tebow got paid this year like a minor leaguer of his level so he makes for a very public example of the inequality.

This is a bit out of date, but as evidenced by the graphic above, these numbers have not changed very much in the past few seasons. Here are monthly salaries for various levels of the minors (source)

  • Shortseason: $1150
  • Low-A: $1300
  • Hi-A: $1500
  • AA: $1700
  • AAA: $2150

In contrast the major league minimum salary is now $535,000 or about $89,000 per month. For players on the 40 man roster for the first time they make ~$40,000 for the year. For those on for a second time or with a day of major league service it is about ~$82,000 for the year.

Baseball players are only paid during the regular season, even though the expectation is that they will be in shape and improve over the offseason. Teams may assist in sending players to winter leagues abroad, in some sense they are outsourcing the paying of their players to places like the Dominican Republic, Colombia, and Australia. Other players have to work serving coffee in the same town as this writer.

During the season this means players are living in subpar situations, crammed into small apartments. They eat what they can afford, or what a team may provide for certain games. They incur debts. Some of the Latin American players send of the meager money they earn back home to the Dominican Republic or Venezuela. None of these situations are conducive to making a player focus purely on becoming the best baseball player possible.

So why not do this? Because they don’t have to. We can take a look at even the bonus structure of a college senior baseball player in the draft to see this with exact numbers. To be drafted and play in professional ball college seniors are expected to sign for $5,000 to $10,000, especially in the top 10 rounds where a team is trying to save money against their pool. Even in later rounds when a team can spend up to $125,000 without affecting their pool, seniors still routinely still get tiny bonuses. The reason is leverage. A drafted college senior’s only choices when it comes to playing professional baseball are to take the offered bonus and then make a pittance or to go to Independent Ball with no pathway back to affiliated ball (the drafting team still holds their rights).

Meanwhile in all of this baseball says that they are exempt from collusion to keep wages down due to exemption from anti-trust laws. They classify players as seasonal workers. They make it appear to fans that paying players more will endanger minor league teams, even though minor league teams are not footing the bill for player salaries (salaries are paid by the parent club).

None of this makes any sense from a business perspective either because of the existence of another pro-business part of the CBA, the major league minimum salary and years of team control. If a team can develop a player to be a solid middle reliever, that player is worth $7-$8M in surplus value to that team (we will come back to this number).

Teams also talk about the cost, so let’s talk about it. Domestically a team has somewhere between 170 and 200 players. For now I have 190 players in my model (30 per 4 full season teams and 35 per 2 short season teams) with full season players getting 5 months of pay and short season players getting 3 months of pay. This comes to a grand total of $1,239,000 in total salaries.

Now why don’t we say that we want to pay them a modest amount, let’s say everyone gets $50,000 per year. The cost to an organization would be $9,500,000 or $8,261,000 more than they are paying now. We can now go back to earlier example. If paying players a living wage gets you one 1 WAR player per year extra, it has paid for itself. If this increase gains you a higher level player per year, you are set as an organization.

It isn’t just higher pay. It is doing away with the idea that baseball is a season job, because it isn’t. Teams expect players to be constantly improving without giving them the resources to do so. Teams are expecting better baseball players without putting in the work and it is time for them to put in the work.

3 thoughts on “Baseball Teams Need to Pay Their Minor Leaguers a Fair Wage”

  1. Thanks for this, Matt. It is ridiculous to me that Major League teams don’t better support their minor league affiliates and particularly the development of their own players. There is so much to gain from doing so, and at such little respective costs.

    My hope is that one ML team is brave enough to correct this oversight and will then gain a clear competitive advantage, thereby encouraging ALL other teams to do the same.

  2. You nailed it. It makes business sense to make sure the kids receive enough so that they can eat good, clean foods and live in safe, restful environments. Having guys employed by billion dollar businesses worrying about their next meal is sinful and stupid!

Comments are closed.