Commissioner Rob Manfred’s grand vision to unify baseball (and softball)—at all levels—under the Major League Baseball banner appears to be slowly but surely coming to fruition. Sources familiar with MLB’s plan said the league is engaged in separate conversations/negotiations with Minor League Baseball (MiLB), several independent professional leagues and various amateur baseball stakeholders about operating under MLB control.
The ‘One Baseball’ concept is rooted in MLB’s desire to improve the league’s on-field product (think: elite player development, get more kids playing) and to develop the next generation of baseball fans (see: increased engagement); presumably, the approach will also yield some longer-term financial returns. MLB’s plans are yet to be formalized, but our sources said to expect “some of [the changes] will be in place [as soon as] next year. The rest will be implemented over the next 2-3 years.”
Our Take: It’s been suggested that the ‘One Baseball’ concept is MLB’s take on FIFA’s soccer governance structure. While not a perfect comparison (there are no plans to establish a player transfer market), the framework of having various interrelated—but independent—leagues, across multiple levels, all under a single organizational umbrella is similar.
When Manfred first spoke of his ‘One Baseball’ vision in 2015, his focus was primarily on amateur baseball (the Professional Baseball Association negotiations were still five years away). The idea was to add structure to a landscape that historically was dominated by a collective of independent private, for-profit entities (think: pay-to-play showcases, tournaments). They believed that if the league could eliminate cost as a barrier for entry—and provide a clear path to professional baseball—more top-level athletes would stick with the game (as opposed to shift focus to football or basketball).
Since MLB, along with USA Baseball, introduced the Play Ball campaign in 2015, participation across the sport is up +20%. Last summer the league took a significant step toward improving the elite prospect pool by introducing the Prospect Development Pipeline League, a free summer league for high schoolers entering their junior years (and a viable alternative to the exclusive travel team model). While COVID-19 torpedoed this summer’s event, MLB intends to expand into more regions going forward. It’s worth noting that MLB is also investing in elite amateur baseball infrastructure abroad, focusing efforts in talent-rich Latin American (think: DR, Venezuela, Colombia, Panama, Curaçao, Aruba).
Part of providing a clear path to the majors is cleaning up a disjointed collegiate summer league landscape. MLB believes it can accomplish the feat by repurposing three of the rookie/short-season leagues slated to lose their affiliation with MiLB with the expiration of the Professional Baseball Agreement. Under the proposed plan (negotiations are ongoing), the Appalachian League would be converted into a summer league for college players entering their sophomore years. That class would then graduate on to the Cape Cod League the following summer before participating in a league formed from parts of the Pioneer and New York-Penn leagues after their senior years. (MLB would like to push the draft back to accommodate the summer league seasons.)
By incorporating the three rookie/short-season leagues under the MLB umbrella, the league can ensure that quality baseball remains in those markets set to lose their MiLB affiliation (critical for future fan development). The 2020 and 2021 MLB drafts will be just five rounds, and there’s no guarantee the league will return to 40 rounds in 2022 (MLB believes 20 or 25 would be sufficient; they will need the players’ association to sign off). Fewer rounds should translate to an increase in player quality across the collegiate baseball landscape (including the aforementioned summer leagues).
Now that the PBA is coming up on its Sept. 30 expiration (the CBA will expire in Dec. ’21), MLB has turned its focus to unifying professional baseball. For much of the last 30 years, MLB clubs have supplied MiLB affiliates with players and that has been the extent of their relationship. MLB is intent on changing that. Manfred & Co. believe if they assume operational control of the minor leagues, MLB could use the additional reach to promote the game and get more people playing (think: MLB sponsored youth programs tied to each affiliate). Presumably, the relationship would also come with access to valuable fan data they could use to drive engagement (and ultimately ticket/merchandise sales).
While taking control of MiLB presents a long-term value proposition for MLB team owners, in the short-term a unified front between MLB and MiLB should be a boon to the owners of MLB affiliates. MLB expects to be able to leverage its brand and resources to drive MiLB revenues (by pooling and selling their licensing and sponsorship rights for them) and reduce their costs (due to their scale). Establishing stable, long-term relationships (think: franchisor/franchisee agreements) with major league clubs could also potentially result in increased MiLB team valuations. Remember, as it currently stands, there’s an ongoing game of musical chairs (as affiliations can change every 2-4 years) that prevents MLB teams from investing in or jointly marketing alongside their farm clubs.
Josh Schaub believes a dramatic shift in the minor league business model would “end the affiliated minor league baseball business as we know it, where MiLB has significant subsidy and had a monopoly on affiliations thus artificially increasing valuations.” In fact, the American Association Commissioner believes it just might lead to turnover in MiLB ownership. Said Schaub: “I believe a lot of MLB teams are [now] looking to make further acquisitions [of MiLB organizations] to better control and create stability in their system.”
Major League Baseball is looking about to establish formal relationships with various independent baseball leagues too. Historically speaking, the big leagues have ignored their independent counterparts. But with 5-6 million fans coming through their gates annually and MLB increasingly wanting to bring professional baseball to as many people as possible it certainly makes sense to bring the disparate leagues under the umbrella.
The new PBA will come with a reshuffling of MLB affiliates. Expect MLB clubs to shrink the geographic footprint within their respective farm systems in an effort to reduce costs and the distance from their MiLB players—a shift in thinking that is likely to result in MLB teams adopting some of the more prominent independent league teams as affiliates. Schaub explained that he believes MLB will disregard the old system and target any club that has “really good facilities, in or near major markets, that have been untapped [from an MiLB] perspective because of territorial restrictions” (which would be eliminated). For what it’s worth, Schaub didn’t believe any of the 40 markets losing their MiLB affiliation would lose baseball permanently. “Some operator will backfill into those communities [with either professional or summer collegiate baseball] because there’s demand for it,” he said.
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