Everything You Want To Know About Minor League Baseball – And More

July 21, 2017

If you are a baseball nut, especially if you like stats, this is your lucky day.

Several minor league baseball players filed an antitrust suit against former baseball commissioner Bud Selig and all of the owners of major league teams. The antitrust issues are as boring as a fifteen inning, low scoring game, but this Opinion puts out lots of information I bet you don’t know.

FARM SYSTEM

Major league baseball (MLB) is an association consisting of thirty MLB franchises – clubs or teams. Each franchise employs approximately forty baseball players on its “40-man roster,” with up to twenty-five players on its “active roster,” who play at the major league level. As part of MLB’s “farm system,” each franchise also employs 150 – 250 players who compete at the minor league level. Although minor league players train and play for minor league clubs, they are employed by a MLB club.

MINOR LEAGUE SALARIES

MLB salary guidelines are not public, but according this federal lawsuit filed by a few minor league players, all first-year minor league players earn $1,100 per month, Class-A minor league players earn $1,250 per month, Class-AA minor league players earn $1,500 per month and Class-AAA minor league players earn $2,150. This suit alleges that most minor league players earn less than $7,500 a year. Minor league players receive no salary for spring training during which they work fifty to sixty hours a week. And you thought you were underpaid.

MLB’S RESERVE CLAUSE

Minor league players must sign a Uniform Player Contract which includes the so-called “reserve clause,” MLB franchises receive exclusive rights to their minor league players for seven years. The clause precludes players from playing for any other baseball team during the contract, whether or not the team is an MLB franchise. Wow.

Unlike major league baseball players, minor league players do not belong to a labor union and must engage in negotiations independently. I get why this suit was filed.

VIOLATION OF ANTITRUST LAWS!

The suit claims MLB’s hiring and employment policies violate federal antitrust laws by “restraining horizontal competition between and among MLB franchises and artificially and illegally depressing minor league salaries.” A Sherman Act violation.

MLB owners claim it has long been established that baseball is exempt from federal antitrust laws, and that Congress specifically exempted minor league baseball when adopting the Curt Flood Act of 1998.

The plaintiff players argued that the courts should not “blindly apply outmoded, erroneous reasoning to an antitrust case.” I think I agree.

MLB OWNERS PREVAIL – OF COURSE

The Ninth Circuit Federal Court of Appeals without hesitation concluded that the U.S. Supreme Court has consistently allowed minor league baseball to be exempt from antitrust laws and that Congress in passing the Curt Flood Act allowed the exemption to continue. The Court ruling concluded, “minor league baseball falls squarely within the nearly century-old business-of-baseball exemption from federal antitrust laws.”

Standup and cheer loudly for those lowly-paid Reno Aces and Sacramento River Cats.

Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. Jim’s practice areas include: real estate, development, construction, business, HOA’s, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at porter@portersimon.com or www.portersimon.com.

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