Money  /  Explainer

How Government Devastated Minor League Baseball

And why stopping the subsidies can help bring it back.

In early 2018, MLB Commissioner Rob Manfred put the squeeze on the owners of the 160 minor league baseball teams: Go lobby Congress to pass the unsubtly named Save America's Pastime Act, or face potentially dire consequences.

"We were told very clearly if we didn't get that thing passed, we would be staring down the barrel of contraction," multi-franchise owner Dave Heller recalled to ESPN. "So we were all supremely motivated to help MLB pass that legislation." (Two of Heller's four franchises lost their MLB affiliations in the December 2020 downsizing.)

The press release from sponsor Rep. Brett Guthrie (R–Ky.) announcing the 2016 bill warned that if it wasn't passed, "the costs to support local teams would likely increase dramatically and usher in significant cuts across the league, threatening the primary pathway to the Majors and putting teams at risk."

The Save America's Pastime Act amended the 1938 Fair Labor Standards Act to carve out an exemption for minor league baseball players so that they would not be paid overtime during the season or any money at all during pre- and post-season team workouts. Instead of paying players the federal minimum wage, franchises could retain them for as low as $1,100 a month for three to five months.

This was sold to legislators by minor league owners as a way to keep community ties alive in non–major metro areas like Charleston, West Virginia, and Burlington, Vermont. But in fact it was a penny-squeezing power play by MLB owners in the country's largest markets. To understand why requires a brief historical explanation about the relationship between the major and minor leagues.

Baseball as we know it derives from ball-and-bat game variations developed in the mid–19th century in Philadelphia, Connecticut, Massachusetts, and especially New York City. There were clubs of varying degrees of formality, temporary travel teams, and eventually leagues. The eight-team National League was born in 1876 and quickly developed a reputation as the best in organized ball; an eight-team American League upstart came along in 1901; the two formed an organizational truce and held an annual World Series, and that (with a couple of brief detours) is pretty much what Major League Baseball looked like for a half-century.

But the "minor leagues" during that span changed so dramatically they are unrecognizable. "The minor leagues did not start out as what they are," author Bill James wrote in The New Bill James Historical Baseball Abstract. "By a long series of actions and agreements, inducements and rewards, the minor leagues were reduced in tiny degrees from entirely independent sovereignties into vassal states, existing only to serve the needs of major league baseball."