When the dust settles on the next Professional Baseball Agreement (PBA), which is the binding agreement between Major League Baseball and Minor League Baseball (MiLB), some MiLB teams may find themselves in search of a new home. After receiving an extension in 2011 that kept the relationship status quo, the current PBA expires on September 15, 2020 and significant changes are expected. According to leaked reports, negotiations include a proposed restructuring of teams participating in the lower level of MiLB, transitioning short-season rookie ball and lower Class A teams to a new league, currently referred to as the “Dream League,” for undrafted players. The PBA has not substantially changed since 1990.

Under the proposed terms of the PBA, the number of minor league clubs affiliated with MLB teams would be cut from 160 to 120. This shift would significantly increase the number of MiLB teams operating independent from an MLB franchise. Currently, only the Sugar Land Skeeters (Houston, TX) and St. Paul Saints (St. Paul, MN) operate in the MiLB. The MLB has determined the 40 teams at risk of losing their affiliation based on the quality of the team’s facilities. MLB teams were polled to assess the facilities throughout their systems at the end of the MiLB season, which now has placed those in the greatest need on the MLB’s shortlist for change. As it currently stands, MiLB teams are financially responsible for maintaining facilities, while the MLB covers the salaries of MiLB players, coaches, and staffs. In his letter to the MiLB about the proposal, MiLB President Pat O’Conner told teams, “[a]lthough we understand that MLB projects that the 120 plan will ‘save’ the 30 Major League clubs an aggregate of about $20M a year, the loss to the future of the game would be exponentially greater.”

The last time the MLB changed facility requirements was in 1992, which resulted in significant team relocation. In an interview with Baseball America, O’Conner said that the 1992 facility requirement change was “catastrophic for some cities,” but, together with the MLB, the core of baseball operations is much stronger now and likely to withstand any changes. O’Conner went on, “[w]e have concerns about what changes to the structural system will do to the game itself—not the economics of the game, not the function of the game, but the game itself.”

At this time, the PBA negotiations are in the infant stages. Certainly, the MLB is looking to the future, and cutting the roster of MiLB teams may make sense when considering the direction of future growth. Alternatively, if the MLB can cut back the number of players in the development pipeline, the remaining prospects will likely see better pay and an increase in MiLB facilities and operations across the board. The PBA proposal almost certainly puts the MiLB teams currently on the cutting block in a difficult position, especially considering some of those teams are likely to be playing at facilities with debt associated with the team’s facilities maintenance.

As negotiations continue, this drastic change is likely to be refined or even eliminated. It is not unprecedented for opening negotiations to temper through dialogue, especially where months stand between the current PBA’s deadline. The GS Sports and Entertainment Law Insider team will continue to monitor PBA negotiations and provide further update as news continues to break.