How to raise Minor League salaries without spending additional money Doug Gray December 23, 2017 29 Comments If you’ve followed me for any real amount of time you know that I’ve long been a proponent of paying Minor League Baseball players more than they are currently making. I’ve written about this more than a few times, but last weeks comments from the President of Minor League Baseball just brought it all back to the forefront once again. Right now, based on the amount of hours worked, and the salary paid, players are making less than minimum wage. And some of them are making significantly less than that. It’s been a very, very long time since salary has gone up for Minor Leaguers. Here’s the pay scale for how much a Minor Leaguer makes who has not yet reached free agency, been in the Major Leagues, or is currently on the 40-man roster: Per Month Level 1st Year Additional Year AAA $2,150 $2400 (2nd year), $2700 (3rd year) AA $1,700 Goes up $100 per month for repeating players A+ $1,500 Goes up $50 a year for repeating players A $1,300 Goes up $50 a year for repeating players Rookie $1,150 Unknown DSL At least $300 No less than the 1st year rate A few things to note, that some of you may know, and that some others may not know: The salary is paid by the Major League Baseball team you are with. It’s not paid for by the Minor League franchise owner. Housing is not paid for, except in the Dominican Summer League where the players live “on site”. The players do get a food per diem while on the road of $25 per day. While at home, they do not get meal money, but are provided with a pre-game meal that now days is actual quality food (the days of peanut butter and jelly or lunch meat spreads are over – teams finally wised up and have begun to provide quality food rather than have a 20-something clubhouse attendant provide the daily spread for athletes on a chump-change set of clubhouse dues). The players are not paid for spring training. Major League Baseball owners don’t want to pay Minor Leaguers more. And, at least for now, they don’t have to. Somehow, Minor League baseball players are classified as seasonal workers. Like the people who work at the Christmas Tree lot on the corner. But, weird enough, during the season in which they aren’t working, they are subject to random drug testing by their seasonal employer. And they also aren’t allowed to ply their trade for another company in the non-season employment period. But, sure, seasonal employees. So, how can Major League Baseball owners pay Minor League Baseball players more money right now, but not spend any extra money? I’ve got the answer. At least for quite a while. Major League Baseball changed how teams operated when it came to signing international players a handful of years ago. They limited how much money teams could spend to sign amateurs before having to face stiff penalties. One of those penalties was a 100% tax paid on overages that went directly to Major League Baseball. They believed that teams would follow the rules. Instead, for the few years before they once again changed the rules, teams racked up over $200M in penalties paid to Major League Baseball. That money is what they were willing to pay players to sign, but instead had to pay it to Major League Baseball for “breaking the rules”. Due to the fact that they didn’t expect to see much money, Major League Baseball never had a plan of what to do with that penalty money. Why not use that money to give it directly back to the Minor League players in salary? The money is already spent and the owners aren’t getting that money back. It was money they were willing to give players, who ultimately didn’t get it. I spoke with a financial adviser about how much of a raise each player could get and how long that fund would last in paying that additional salary. We made a few concessions here. First, we decided that only 175 players in the system would get the raise. At any given point in time a system has something around 200-225 players in it. But once players have been in the Majors Leagues, or have been on the 40-man roster or reached free agency, their salary scale is very different and so we decided they didn’t need a raise. How to Increase Minor League Salary So, with 175 players in every organization qualifying for a raise, we decided to see how long things would last. If all 175 players in all 30 organizations were given a raise of $500 per month, the fund would pay for that for the next 24 years. Sort of. If Major League Baseball got a return of 7% on their money, and there was a built in 3% raise per year to the Minor Leaguers for a “cost of living” increase, the money would last for 24 years. If the players only got a 2% cost of living increase per year, the fund would last for 30 years. THIRTY YEARS. It’s time for Major League Baseball, the owners, and the Major League Baseball Players Association to get together and do the right thing. That money was willing to be spent to sign players – and it was. It just didn’t go to the players themselves. Do something good with it. Do something right with it. Give it back to the players. Give them an option of maybe not having four roommates in a three bedroom apartment where someone gets to live in the living room just so everyone has enough money to get by. At some point in the next 24-30 years the owners can try and come up with another way to pay that extra money when this fund runs out. Until then, they wouldn’t be out a dime, but it would be a big difference maker for the Minor Leaguer players. 29 Responses Michael December 23, 2017 This post makes me angry, why pay them more for playing a game… Same guy complains about getting paid o.t. at 1.5 times hourly rate while these guys don’t get paid for over a month of work. Watch the language Jami Sanderson December 23, 2017 Good idea Doug. Reggie December 23, 2017 At this rate, then don’t give any of them signing bonuses, and start everyone with $3,000 a month. My employer didn’t give me a multi-thousand dollar signing bonus. And if you can’t live on $3,000 a month with most of your food provided for you, then don’t join the real world, where it’s a struggle everyday to do a job you hate, not a game you love. Jonathan Linn December 23, 2017 Couple of questions: how is most of their food paid for them? Secondly what are these players suppose to do in the off-season if they aren wanting to get better. Third – where are you getting $3,000/month? Most I’m adding up is $2650 for AS A. Forth – I’m guessing a small % of minor league players receive thousands of dollars in bonus as well. Other careers do the same thing when you change employers. MK December 23, 2017 Bonuses! I had five players live with me one season. One got $10,000 bonus he used to put a room on his single mothers house so she could take in borders. Another got $50,000 which helped augment his families income for 6 years. Both of these guys are home now making minimum wage one in the Dominican and one in Venezuela. Another got $10,000 to help his single mom and widowed grandmother. He did make it to the big leagues this year and made $110,000 for little over a month. One got $10,000 blew out his knee and was sent home. got no workers comp, but luckily he married a doctor. Finally one Venezuelan beat the system getting a $690,000 bonus, he was released after three years and now runs a successful decorating business in Miami. I am sure any industry that hires someone their Headhunters (scout) determine that can rise to the top of their profession (one of the top 750 in the world)the demand for their services is in great demand. which means a signing bonus is in order. I guess you boss did not determine people in your profession were in that great of demand so no signing bonus. Krozley December 23, 2017 How about taking the $200 million and knocking off $3 or so off every ticket sold next year. Either directly have it reduced upon purchase, or have it be a mail-in or online redemption where, due to the nature of people not redeeming things like this, make it $5 per ticket. I’m not saying minor leaguers shouldn’t get paid a little more, but I’d rather have “found” money like that go to the fans. Jonathan Linn December 23, 2017 However it’s not like they can get a second job while they are playing baseball. The money they earn isn’t even enough to live. Come on man? How about some empathy? I think that’s a great idea Doug. Which months would the players get the extra $500/month? Doug Gray December 23, 2017 April through August (it’s pro-rated into September if they are still playing at that time). Simon Cowell December 24, 2017 Pay them minimum wage and pay them hourly for the time they put in. On an offseason. any time over 8 hours is of course time and a half. Standard labor laws apply. Seriously though should they make more than other workers? If they are making more than minimum wage I have no problem with it. If they are making more than minimum I have no problem with it either. Baseball has been around for 100 plus years and the system works better than any other sport. You start changing things that aren’t broken and you wind up actually breaking the entire system. I think major league baseball needs to focus more on parity and crappy umpires and less on how much individuals are actually making in the farm system. That’s my opinion. Doug Gray December 24, 2017 Well, I think they do deserve to make more than “other workers” if the other workers are literally the absolute bottom of the barrel (re: those who make minimum wage) given that their skillset isn’t something that literally almost anyone can do. But, minimum wage is a start and an improvement. Simon Cowell December 24, 2017 Well, we’ll agree to disagree. They are playing a sport which should be based on passion not on intellectual capacity. someone that goes to school or is going to school deserves the opportunity to advance in their career track. I give the same credence to the baseball player. If they put in the effort and advance themselves then they can rise above the “minimum” A baseball player whose gifts are of a physical nature not be afforded a greater financial future than say someone who is gifted at math. The market and demand decide such things. I’m ok with that because it provides “incentive” to work hard. If you pay more you run the risk of a percentage of players becoming complacent and saying, “eh, this is good enough no need to put in the extra work.” Again I agree that minimum wage should be met. Ater minimum wage is where we disagree. Some work for passion and some work for the food on the table. Both should be treated with equality. Shamrock December 24, 2017 A lot of these “bottom of the barrel” people you refer to work in the service industry and literally make life easier for the rest of us. I would rather see the guy who makes the labor force’s coffee at Dunkin Donuts 358 days a year get paid more than some kid who gets to play a game he loves for 7-8 months. I think the pros are paid way too much and that the signing bonuses have also gotten way out of control. Doug Gray December 24, 2017 I’d rather they both get paid more than they do. And I think you need to go take a look at how much money the owners are making before complaining about signing bonuses. sixpacktwo December 24, 2017 I agree with most of your points but these are young people and a lot of them from other Countries where that money is huge. Young people 18-21 are just getting started in life, live at Home with parents, eat at the family table, going to school, etc. I do think money management at this age will, or can, help you the rest of your life. I had four roommates in college and it was a great experience. Drew December 24, 2017 In my day job, I have dealt with quite a few kids who go on to get “paid” to play professionally. It is very financially difficult for for most of them and ends up costing many of them money. For a guy who signs on after college, he may forgo four or five years of salary in their eventual profession to chase their dream. Of course, this is their choice. However, these guys should at least be paid a living wage while in the minors. The owners and the MLBPA are both, IMO, culpable in the plight of minor league players. We all know that the impetus for change is not going to come from the owners. It needs to come from the players who “made it” to help those who are “on the way” and also those who will never make it. Timothy December 24, 2017 Love the idea. How do you make this happen and get it implemented? What has the MLB done with that money? MK December 24, 2017 Looks like Sebastian Elizalde is going to lead the Mexican Winter League in Batting Average,. He has sustained a 5 to 10 pvt. point lead most of the season and there are only a couple of weeks to go. Michael December 24, 2017 I am literally shaking my head. Does anyone not think they should at least make minimum wage? Does anyone think they should at least be paid for work they are doing? They do not get paid minimum wage and they do not get paid for spring training and instructionasl league. Shawn December 24, 2017 It makes no sense that players don’t make enough to live on. Too much money involved for this to happen. Shameful Rich December 25, 2017 I agree with you about the Minor League salary problem, Doug. Creative and reasonable solution. Ryan December 25, 2017 One aspect critics are bringing up is that they are playing a game, which is fun, so they’re pay(or lack of) shouldn’t matter. What they are aren’t getting is that there is an opportunity cost attached to spending time in the minors instead of pursing opportunities in the workforce. sixpacktwo December 25, 2017 of course you are right and it is called life choices. You apprentice in a trade to learn. You work at fast food when your young to learn and if you stay you have made a choice as hopefully you moved up. Living with other people regardless of where (baseball, College, etc) you are learning life lessons and that is invaluable as you go thru life. The pay you get at this young age is also a learning experience. I want more and this is how I get it, whatever that is. Richard Williams December 25, 2017 Keep your political ideas and garbage hot takes to yourself. If you want to have those conversations, this isn’t the place for them. Richard Williams December 26, 2017 Shame MLB into change may be the only viable avenue. Sign up all minor leaguers that are eligible for welfare benefits on day 1 of spring training in FL and AZ en masse. It would bring a spotlight on to the situation. MLB, the team’s, and the owners could not withstand all the negative OR generated by daily news stories. Every day of spring training would be a feature news story. With all the money that is awash in MLB, they could not withstand the nightmare PR that would be generated. Doug Gray December 26, 2017 This isn’t a place to talk politics and if you want to keep doing so, I will absolutely ban you from posting here. This is a place to talk about baseball. People can’t talk politics and be reasonable with each other. It’s not going to be tolerated here, so keep it out. I’m not going to tell you again. Piggly Wiggly December 25, 2017 Santa told me last night that a 3-way 3-team trade with the Reds will be consummated soon. Going to SF Giants are OF Billy Hamilton and RHRP Zach Weiss. Going to Cincinnati are 1B/OF Chris Shaw, OF Steven Duggar, and LHP Garrett Williams. In turn, the Reds send Shaw, Duggar, OF Scott Schebler, LHP Amir Garrett, RHP Jose Lopez, and SS Jeter Downs to Tampa Bay for OF Kevin Kiermaier, OF Justin Williams, and SS Willie Adames. Reds get CF Kevin Kiermaier, SS Willie Adames, OF Justin Williams, and LHP Garrett Williams. A new CF and leadoff hitter, a new SS, a new LHP, and a new OF. Something about that last name Williams. Simon Cowell December 25, 2017 We don’t live in a Socialist country “yet”. Players and or workers for any company are not paid based on a percentage of anything. Players should be paid on a few factors 1) contribution to ticket sales 2) replaceability 3) performance. 4) future projection. Anything else is ridiculous to even consider. Players are paid based on what the major league team values the player. I think it is that simple. Again, I believe that they should be paid minimum wage on an hourly rate and anything above that should be projection or performance based. Doug Gray December 26, 2017 Players aren’t paid on that, though. They are paid what the owners and MLB players agreed to pay them. We know that these wages aren’t what they are valued at because we’ve seen how much guys actually get paid when they somehow become free agents due to loopholes and it’s multitudes higher than what they get when they aren’t. Bill December 26, 2017 One-off free agents are a poor example as the create an isolated sellers market where only one player is available and multiple motivated buyers are in play. This drives up the price of the contract for that individual player. Look at the IFA market. A relatively few players receive $100K signing bonuses while the majority sign for significantly less. This happens on the major league free agent market too where the top players earn enormous contracts compared to the majority of free agents. What we actually observe in the marketplace is that clubs will only pay a premium for top talent.