Peter Davis, proprietor of the Missoula PaddleHeads, was two years into his career as a minor league baseball owner when disaster struck.
The PaddleHeads, who had been a farm team for the Arizona Diamondbacks, became an independent club. The PaddleHeads players and coaches were not paid by the Diamondbacks. The financial value that came with owning an affiliated team.
We lost all the equity. We had no idea what we were going to do at that point.
The PaddleHeads were able to swim. They won the championship in the Pioneer League, which was independent for the 2021 season.
We had a great season, and we loved being an independent team.
Many minor league officials predicted disaster when MLB reduced the number of affiliated teams from 160 to 120. We reached out to more than 50 teams to see how they did.
The reconfiguration was a disaster for some clubs. Eight teams that lost affiliation folded or did not play in 2021, and some of them are now suing MLB for breaching their contracts. Some officials from teams that remained affiliated said they wouldn't air their grievances publicly for fear of angering Major League Baseball.
For the owners who lost affiliation, a number was like Davis. They say the reorganization worked out better than they expected, even though they were worried about MLB's long-term commitment to their new leagues.
The owner of the now-independent Northern Colorado Owlz says he was wrong. I am encouraged. I would have told you that it was going to be a s--- show.
The Owlz were one of the eight teams that didn't play because their stadium was incomplete, but they plan to play again this year.
Minor league baseball will be the only professional game in town if the major league owners and players don't resolve their labor dispute. The minor league seasons will begin on schedule, despite the fact that players on MLB teams are not allowed to work. The potential for a banner season is being seen by minor league owners.
Andy Shea, the CEO of two teams that lost affiliation, says that the first reaction was "Change is bad, change is bad, I want status quo."
The de-affiliated teams joined either the independent professional league or MLB's new amateur draft and prospect league, which use college players swinging wooden bats.
The plan to restructure the game has gone well according to MLB officials.
Morgan Sword, MLB's executive vice president for baseball operations, says that Year 1 was in a global Pandemic and that prevented them from progressing as quickly as they wanted.
One thing is clear: Major League Baseball is now in complete control of the minor league system, all of which is part of the vision of commissioner Rob Manfred.
One minor league owner says that Major League Baseball is very powerful at getting what it wants. They will ultimately get what they want.
The Minor League Baseball offices in St. Pete, Florida were the only places where the patchwork of leagues worked under the old minor league system.
The New York Mets had a Triple-A team in Las Vegas for six seasons, but they had to renew their agreements every two to four years. The new system allows clubs to choose affiliates.
Minor league facilities that are publicly owned were wanted by the MLB teams. The owners were told they would lose their affiliation if they didn't make the upgrades.
The tab can be several million dollars for some ballparks. Major league clubs would be able to improve the pay of their minor leaguers if they reduced the number of teams.
The affiliated minor league owner says that the goals were worth it.
He says a lot of that was needed.
An agreement a year ago that established four independent leagues, including the Pioneer, was a positive turning point for owners who lost affiliation. For the first three years, MLB covers the administrative costs of up to $500,000 per league, and it provides scouting technology for teams to keep an eye on players.
The biggest thing the agreement gave Davis was a sense of security.
An MLB official says that by the year 2023 there will be minor league ball in five of the cities where teams didn't play last year.
Chris says that he has to at least appreciate the fact that MLB has done everything they said they would do in bringing summer league ball to these markets. We had to either try this or we would be out of a business. It worked out well for us. Other leagues and teams have had more of a challenge than we have.
Freedom is just another word for having way more in expenses for some teams that moved to independent ball. The PaddleHeads had to come up with money for things the major league teams used to provide, such as $300,000 for players and trainers, and all the baseball expenses, baseballs and bats. It was fun to do it all ourselves this year. He says it was fun, but it was expensive.
Some owners say their total expenses are higher because teams like his no longer have to pay fees to MiLB.
The owners of clubs that converted to independent professional teams say their biggest issue is that they lost a lot of value when they lost affiliation. If you don't intend to sell, it's fine as long as you have a beautiful house.
Davis says the equity difference is millions of dollars. The rest of the league wants to be affiliated so they can get their money back.
Several sources say that the Mets Double-A affiliate, the Rumble Ponies, were sold last year for $10 million, which is consistent with the market before contraction. The Vermont Lake Monsters lost their affiliation and sold for about $1 million, far less than the $8 million that other teams in their league had sold for previously.
It hurt in a lot of ways. I was there for 26 years or more. I was hopeful for something special in the community, and all of a sudden they took all of that away from us.
The buyer would keep the team in Vermont.
Three of the 43 teams that lost affiliation are now suing MLB, saying that MLB bullied them out of business. Some of the owners who didn't operate last year couldn't sue, they also own teams that kept affiliation, and they waive that right when they sign agreements with MLB
An MLB official, speaking on the condition of anonymity, denied that the clubs or MLB violated any contracts.
The official says that the Professional Baseball Agreement between MLB and MiLB expired in 2020. If you take it to a logical extreme, they say you are here forever.
The antitrust exemption of MLB was the subject of a federal lawsuit in December. A class action lawsuit was filed this month on behalf of minor league players, who claim that MLB and its teams colluded to keep pay low. Minor league teams would move and create a state of chaos without MLB's antitrust exemption, which allows it to control team territories.
The Staten Island Yankees were owned by Nostalgic Partners. They are suing for 20 million dollars.
The firm is going to win the suit because they were totally wronged by MLB and the Yankees.
The owners of the Salem-Keizer (Oregon) Volcanoes and the Tri-City (New York) ValleyCats were once affiliated with the Houston Astros. The owner of the Sea Unicorns joined the lawsuit.
The $500,000 MLB is giving his new league isn't enough to cover what was lost, and he doesn't have faith that it will continue to support baseball in that league's communities
They did the minimum that they could. He expects them to participate for three years and then leave. How do you negotiate when there is nothing to negotiate with?
The owner said he didn't want any of that attributed to him, because he hopes that someday MLB will restore his affiliation.
Even Allen, who says MLB came through on 98% of what was promised, has concerns for the long run.
You can't expect them to pay for 20 years down the road. He says that he is concerned about the league's sustainable nature. I know our community is worried. If they pull the financing, what is the plan? Some teams will not be able to make it if the financing is pulled. I believe ours would survive. Some of them wouldn't.
The teams that were keeping their affiliation were relieved, but they had concerns about what life would be like under direct MLB rule.
At the beginning, there was a lot of cynicism. Ken Young, who is a part-owner of four affiliated teams, says the cynicism dissipated a bit. We had attendance restrictions. We had a lot of different problems that were more COVID-19 than anything else.
According to Baseball America magazine, attendance for affiliated clubs was down. Some of that is due to restrictions at some parks, fan fears of the virus, and games being canceled because of team outbreaks. All clubs say they had a drop in corporate sales, but are optimistic that companies will buy bulk tickets in the future.
The biggest concern of affiliated teams was that MLB would take over their marketing and financial plans, robbing them of their independence.
For the first season, it was satisfactory that we were allowed to operate normally.
Major League Baseball decided to sign 10-year agreements with affiliates, rather than the two- to four-year deals that left major league clubs playing "musical chairs" as they negotiated for minor league clubs. A number of firms and private equity funds are seeking ownership of affiliated teams.
Endeavor, which has grown from its original business as a talent agency, recently announced it was creating a subsidiary called Diamond Baseball and buying 10 affiliated minor league clubs with more acquisitions to come.
Minor league baseball is in the most secure place it could be, according to Peter Freund, the CEO of Diamond and a veteran minor league owner himself. We can grow the brand nationally. The opportunity was not there before.
According to The Athletic, the MLB Players Association told agents they would have to leave the company if they wanted to represent baseball players.
An MLB official says on the condition of anonymity that seeing Endeavor get into the market was shocking. I think it's a compliment that large companies are interested in playing in the minor league.
The old MiLB office in Florida could not coordinate national marketing and merchandising efforts in a way that the MLB minor league office could.
The minor league game will try to expand its appeal with improved broadcasting and marketing. Major league broadcasts should be cut away from minor league games to show the organization's best prospects at work, according to Freund.
MLB officials expressed concerns about letting one owner become too powerful, while they were pleased with the entry into ownership of Endeavor. There is a rule that no one can own more than 24 minor league teams or more than nine within the same minor league level. The rule will be reexamined in the years to come.
Wealthy people who made money elsewhere and want to own a team where they live is the model that the MLB likes to see.
He agrees that the local connection is important, and that he has been preaching local control despite the nationalization of minor league marketing.
Fans have become accustomed to local leadership and we will still operate in that way.
Affiliation is crucial to the value of a club and the teams Endeavor has pursued underscore that point.
The strength of minor league baseball is determined by the strength of Major League Baseball. The Cubs, Dodgers, Giants, Yankees, and Braves are affiliates of teams with national followings, which is why they were pursued by Endeavor.
To affiliate as closely as possible with Major League Baseball is the gold standard. The relationship with MLB is not better than any other option, according to the lead owner of the Jackson Generals, who did not play in 2021.
Newly independent teams that are succeeding say they want back in.
We want to be an affiliated part of Major League Baseball. It is the goal, eventually, according to the vice president and general manager of the Kane County (Illinois) Cougars. So far, so good. The fans have embraced it. The beer and hot dogs are still good.
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