Major Changes, Minor Leagues
This season was the first with Major League Baseball’s new reorganization of Minor League Baseball, something we first wrote about here last December. Ostensibly, it was so Major League Baseball had more direct control over the Minor League operation and to consolidate business plans, create efficiencies, and whatever else.
It also creates an avenue for Major League Baseball to bring unprecedented amounts of capital into the Minors.
From Joe Pompliano’s Huddle Up:
Endeavor, the public holding company of various sports and entertainment assets like the Ultimate Fighting Championship (UFC) & Professional Bull Riders (PBR), announced last week that they would be forming Diamond Baseball Holdings.
Here’s the TLDR version — they plan to acquire a bunch of minor league baseball teams and leverage their experience with negotiating media rights, selling tickets, and digitally transforming business operations to derive additional value from these assets.
The holding company has already purchased or is currently in the process of buying at least nine Minor League Baseball teams, including:
Iowa Cubs (Chicago Cubs)
Memphis Redbirds (St. Louis Cardinals)
Scranton/Wilkes-Barre RailRiders (NY Yankees)
Gwinnett Stripers (Atlanta Braves)
Mississippi Braves (Atlanta Braves)
Hudson Valley Renegades (NY Yankees)
Rome Braves (Atlanta Braves)
Augusta GreenJackets (Atlanta Braves)
San Jose Giants (Low-A Giants)
Since you already know that I am a baseball traditionalists, you already know that I hate this.
Now, there have been consortiums owning and purchasing multiple minor league baseball teams for years. Maryland Baseball Holding, LLC owns the Norfolk Tides Bowie Baysox, and the Frederick Keys (still). 7th Inning Stretch LP owns the Delmarva Shorebirds, Stockton Ports, and Everett Aquasox. Cal Ripken, Jr. owned three teams and before selling two of them. Those individuals and groups are specific LLCs created for the purpose of owning minor league baseball teams.
Not so with Endeavor’s Diamond Baseball Holdings. They are buying a bunch of sports properties with the intent of further monetizing them. That in and of itself I have no problem with. The good part of Endeavor’s proposal is that they plan to buy all of the Atlanta Braves farm teams. That seems like a very synergistic approach in creating opportunities for teams in the same minor league system.
But there are two specific things that I have a problem with in Endeavor’s plan.
First, Diamond Baseball Partnership is proposing to own multiple teams in the same league. The Hudson Valley Renegades and Rome Braves share the High-A East. Scranton and Gwinnett are both in Triple-A East while Memphis and Iowa share Triple-A West. It seems problematic considering those teams are playing against each other and competing against each other.
Speaking of competing against each other, Endeavor’s plan includes purchasing the Triple-A teams of the archrival Chicago Cubs and St. Louis Cardinals. It seems like a conflict of interest that two teams who are competing against each other not only on the field but in the Illinois market to have their minor league teams owned by the same company.
Many in baseball may not remember the problems that existed with syndicate ownership back in the old days of baseball. In 1899, the Robison Brothers purchased the St. Louis Cardinals. They also owned the Cleveland Spiders. In order to own one good team instead of two mediocre teams, the Robisons sent all of the Spiders best players to St. Louis, among them Cy Young. The Spiders went 20-134 that season, far and away the worst season in the history of Major League Baseball.
After the season was over the Spiders were one of four teams (along with the Baltimore Orioles, Louisville Colonels, and Washington Senators) contracted from the National League. And baseball banned somebody from owning two teams.
Major League Baseball has continued to enforce this to this day. One of the other large market corporations on a buying spree is Fenway Sports Group, headed by John Henry. Henry owned an interest in the Yankees, which he had to sell in order to buy the Marlins, which he had to sell to own the Red Sox ownership group.
Which leads me to beg this question; why would anybody in the baseball hierarchy allow any of this to happen? Why would an individual or company be allowed to own team teams in one league? Why would an individual or company be allowed to own the minor-league affiliates of two archrivals?
Don’t get me wrong; I understand the dynamics of all of this are changing. I understand that it costs more money to run a minor league team these days and in the past. I understand that the mom and pop operations are a thing of the past in affiliated baseball.
But that doesn’t mean that this is the way. That doesn’t mean that the homogenization of minor league operations and presentation is a good thing for the teams or their fanbases. That doesn’t mean that one company owning nine of the 120 minor league affiliated clubs available is good for players, coaches, and other consumers of baseball.
The Major Leagues promised major changes for the Minors. But I’m not sure that fans were ready for this….