First Pitch: Major League Baseball’s Takeover of Minor League Baseball

My neighborhood has a Home Owner’s Association.

This association meets once a year, during the never busy period of late November/early December.

In order to make change, the association requires 75% of the homeowners to vote in favor of the change.

More than 25% of the houses in this neighborhood are owned by the banks. They’re rented out through shell companies, but all lead back to the same group of banks in the end.

In a pandemic, those banks let houses sit vacant rather than reducing their rates, and try to raise rates for their renters in the process. They don’t really need the money.

The individuals who own homes in this neighborhood are like any other neighborhood, where they’re concerned for their property value. Most of their savings is tied up into their house, and they have the hope of selling that house one day.

The banks are building brand new houses all around them.

Those new homes are priced just high enough to make that new neighborhood more desirable, but low enough to allow anyone looking for a house to jump from the old houses in this 15-year-old neighborhood to the brand new houses a minute away.

Why wouldn’t you go for a new house? That old one needs a new roof soon. The air conditioner is over ten years old. At least two appliances need to be replaced. There are no problems at all with a new house, said anyone who has never actually purchased a new house.

Eventually, an emergency hits. You lose your job. The roof starts leaking. The hot water heater explodes.

In a country where over half of the citizens have a negative net worth, and are living paycheck to paycheck, no one can afford one of these emergencies.

Then the HOA comes in with their letters. You need to maintain the yard more often. You need to fix your fence. The air conditioning unit can be seen from the street, and you need to plant some shrubs so we can’t see that your house has air conditioning.

The person living paycheck to paycheck can’t afford the fence. They can’t afford the shrubs that will eventually become overgrown and burn out the A/C unit. They don’t have time to maintain the yard, and can’t afford to pay someone to do it for them. Yet if they don’t respond, they’ll get fined a ridiculous amount of money for overgrown hedges.

Eventually, they move away. If they’re lucky, they can get some kind of value from their house sale. If they’re ignorant to sunk costs and maintenance fees, they’ll say they made a profit on their house by looking at the purchase price and the sale price, and ignoring the massive amount of interest they paid in the process.

The shell game comes to an end over time. Someone loses their job and loses their house. Another person couldn’t afford the repairs and couldn’t compete with the new houses around the corner, selling to an investment company backed by the banks.

Eventually, the bank gets it all. That’s what happens when an organization is too big, doesn’t need money, and doesn’t care about the consumer. There will always be another consumer. If there isn’t one looking to buy, there will be one looking to rent, because everyone needs shelter. And if the business of exploiting the little guy isn’t working, the government will always be there to bail the big guys out.

The irony of my neighborhood is that home owners are blind to this. They see renters as the ones potentially lowering their property value. I’ve been on both sides, and can say that the HOA doesn’t go after renters. They go after owners. They don’t exist to protect the property values of the actual individual owners. They exist to protect the property values of the bank owned homes, and to drive out the individual owners in a way that will allow the bank to claim more property.

Think of owning a minor league baseball franchise like owning a house.

Think of Major League Baseball as the bank.

You’ve got your place of residence, but so many things are out of your control. You don’t have a long-term contract with a major league organization, and you don’t have control over which players are sent to your level. It’s up to you to bring in fans with what you’ve got, in order to pay the bills, and yet you owe 8.5% to MLB for all ticket sales that you generate.

If it ever gets to be too much, you can try to cash out by selling. It’s a high cost, but someone out there will pay it, because it’s the thing to do when you’ve got that much money. After all, if you don’t have billions to own an MLB franchise, the next best thing is tens of millions to own that MLB franchise’s minor league franchise. A stadium is a stadium.

Major League Baseball is the bank and the HOA. And right now, they’re forcing minor league owners out of their homes.

Rob Manfred’s “One Baseball” plan is nothing more than MLB’s attempt to push minor league owners out of business.

By cutting the minors from 160 teams to 120 teams, you create competition for survival. Those 40 teams who were cut don’t just disappear. Their stadiums don’t dissipate. They can try to reach a deal with an independent league, but they’re not going to see the same value they once saw, and they won’t see the same ticket sales.

There are only 120 houses in the desirable neighborhood, and anyone left on the outside instantly sees their property value decrease.

The World is in the middle of a pandemic, and while Major League Baseball is operational, the minor league season has been cancelled. That has dealt a crushing blow to every franchise in the minors.

Here’s what happens after MLB cuts down to 120 teams: Many of those 40 teams who were cut will go bankrupt. They’ll have nothing but an expensive, locally public funded stadium, and no team.

Once that happens, MLB will swoop in and buy those franchises at a fraction of what they’re worth now. Those franchises will suddenly be good enough to return to the 120.

The new MLB-owned minor league teams will replace some of the “lowest performing” teams that aren’t owned by MLB, with MLB almost certainly citing costs as the reason for change, much like they’re doing now.

More and more minor league teams will go out of business. MLB will buy more and more franchises and stadiums at discount costs.

Eventually, MLB will own it all.

And minor league owners will be too busy constantly fighting to be one of the surviving 120 every year to do anything about it.

Even if the minor league owners could stand up as one, MLB has the backing of the government, with their antitrust exemption at play, allowing them to ultimately keep costs down by paying their low level employees a below-poverty wage.

They might start paying the minor leaguers more, but they’ll use that as a continued excuse to drive more and more minor league teams out of business, all under the guise of cost cutting from a $10 billion a year and growing industry.

Of course, I’m only thinking this because I’m the worst of humanity, according to MLB.

MLB officials reject the assertion that there’s any motive to drive down franchise values. The changes are all about efficiency, they said.

“If you go to the worst of humanity and say, ‘Why would someone want to do all this?’ It would really be to steal your lunch money. It would be to drive people out of business and be able to come in at a less than market rate,” one MLB team executive said. “And if you go to the best of intentions, which, as a fair-minded person, I actually believe there could be best of intentions here … Major League Baseball sees a way to make this better, to make it where it’s cheaper.”

Like a called strike on the outside of the zone: That was perfectly framed.

Why wouldn’t we think MLB has the best of intentions when they’ve shown the worst intentions at every turn?

There are some days where I can’t stand Major League Baseball, and want to see it all burned to the ground, replaced with a league that actually likes baseball, and isn’t 100% focused on money.

As for the other days? I’ll let you know if they ever arrive. I don’t see any in the forecast while Rob Manfred is commissioner.

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First Pitch