When news of a superstar athlete’s blockbuster contract breaks, it can be easy to assume that all pros are living large. In baseball, however, this is far from the case: Major League Baseball, in which the biggest names can clear $30 million a year, pays poverty-level wages to thousands of players.

These players toil away in obscurity on one of hundreds of minor-league teams that funnel their top talent to the majors. There, they practice and develop—some for as long as 13 years—until they are promoted to major-league teams or, in nearly 90 percent of cases, are waived by their teams or retire. Though some top prospects are rewarded handsomely before making the jump to the majors, many minor leaguers report making as little as $3,000 to $7,500 for a five-month season of intense physical labor, 60-hour workweeks, and little chance of advancement.

Dirk Hayhurst, whose memoir The Bullpen Gospels documents his years as a minor-league pitcher, describes the problems that these wages create. Mandatory team dues, he said, can reduce players’ salaries to less than $300 per month. To save money, players “find at least two more people than the amount of bedrooms that are actually in the place”—sometimes as many as six to a two-bedroom apartment—and spend nights in sleeping bags or on air mattresses because they can’t afford furniture. Food, too, can be a recurring issue: Grueling schedules, frequent travel, and low wages leave players reliant on cheap and unhealthy fast food or snacks from gas-station minimarts. Throw in the fact that many players “have alcohol, tobacco issues to help them cope with the highs and lows of the game,” he says, and the league’s $25 per diem rarely lasts the day.



Labor conditions like these have prompted dozens of former minor-league players to file two separate suits against the MLB. The first, Senne v. MLB, alleges that the MLB habitually violates federal minimum-wage statutes. Moreover, the plaintiffs claim, it’s not fair that the season includes stretches of entirely unpaid labor. Reasoning that training games are for the benefit of the players and not the league itself, the league does not pay players during pre-season spring training. After spring training, a team may choose to send certain players to an “instructional,” rather than competitive, league, where the team applies the same logic and may not pay players for upwards of a month. (Major League Baseball did not respond to multiple requests for comment on this article.)

According to Nathaniel Grow, an associate professor of legal studies at the University of Georgia’s Terry College of Business, the MLB is able to maintain such low wages (or avoid paying them entirely) thanks to a clause in the 1938 Fair Labor Standards Act. The law, a linchpin of the New Deal that, among other things, outlined the 40-hour workweek and established a federal minimum wage, carved out an exception with which Major League Baseball justifies its practice. Minimum-wage and overtime requirements do not apply, the law stipulates, to “any employee employed by an establishment which is an amusement or recreational establishment” that “does not operate for more than seven months in any calendar year.”



“From a general fan perspective,” Grow says, “there’s no question that the baseball or football teams are amusement and recreational.” But digging into the technical details reveals some complications, he says: “These baseball teams also have sophisticated marketing departments, ticket-sales departments, all these other more core business functions. Are all of them seasonal employees at an amusement or recreational establishment?” Grow brought up other, finer-grained questions: “Is the Tampa Bay minor-league affiliate for the Yankees a separate establishment that you then judge seasonality differently than the main team in the Bronx? Within the team in the Bronx, is it all one, or is the business office a separate establishment from the provision of entertainment to the fans?”

Parallel to Senne is Miranda v. Selig, a case that seeks to remedy the same problem through different means. Where Senne focuses on alleged minimum-wage violations, Miranda aims itself at what many consider the root of the problem: the minor league’s decades-old exemption from federal antitrust law. Major League Baseball, the organization that governs both major-league and minor-league players’ contracts, gained an exemption from antitrust laws in 1922, when the Supreme Court ruled in its favor against the Federal League, its upstart competitor. At the time, the exemption applied to both major- and minor-league teams. The Supreme Court twice reaffirmed the exemption to protect the MLB’s use of “reserve clauses,” which bind players to the team that drafts them for up to seven years.



However, the antitrust exemption no longer applies to major-league teams. In 1970, the perennial all-star Curt Flood sued the league for free agency, which allows players to negotiate with new teams when their contracts expire. Though the Supreme Court ruled against Flood, reaffirming his contract’s reserve clause, the lawsuit set into motion further protests and legal action by major-league players, who ultimately won free agency in 1975. Two decades—and one season-ending strike—later, the Curt Flood Act of 1998 rolled back the exemption in the league’s dealings with major-league players.

Crucially, though, the Curt Flood Act doesn’t protect minor leaguers, whose contracts remain controlled by the major-league team with which their minor-league team is affiliated. Unsurprisingly, none of the protections major leaguers have negotiated since 1975—no-trade clauses, for instance, which enable players to veto a deal to send them elsewhere, or free-agency options, which allow players to negotiate for higher contracts with new teams—exist for minor leaguers.

The main reason the Curt Flood Act didn’t cover minor leaguers is that they lacked a union to represent them. The law, Grow says, “was basically a compromise hammered out between the MLB, the Major League Baseball Players Association (MLBPA), and the Minor League Owners Association to try to come up with language that soothes everyone's concerns and made everybody happy.” With no representatives for minor leaguers at the table, Grow says, their interests went unheard, enabling minor-league owners to extract concessions that major-league owners couldn’t.



According to Warren Zola, an associate professor of business law at Boston College’s Carroll School of Management, the Curt Flood Act’s omission of minor leaguers makes clear the MLBPA’s conflicting incentives: “While they in theory represent future members, to be in the union, you have to be on the 40-man roster of a major-league baseball team,” he says. If they fought more actively for minor leaguers, “it’s not impossible to believe that you might give up certain rights that major-league baseball players currently enjoy.”

The preservation of the antitrust exemption for minor-league teams has significant ramifications for minor leaguers. It means teams can promote, demote, or waive a player for any number of reasons, from performance to injury to attitude. It depresses salaries by tamping down competition and prevents players from testing the waters elsewhere, whether with an unaffiliated league in the U.S. or abroad. And it allows teams to include a contractual provision called a “clawback,” with which a team can rescind a player’s signing bonus should he choose to retire before fulfilling his contract.

“We’re playing a role in creating this value. It’s time for us to be compensated as such.”

Both Miranda and Senne were filed in 2014, and the cases have proceeded slowly. Miranda, which both Grow and Zola believe faces bigger challenges due to the antitrust exemption’s longstanding precedent, was dismissed last fall; the plaintiffs have appealed to the Ninth Circuit Court of Appeals, but a hearing has not yet been scheduled. Senne lost its class-action status after the MLB successfully argued that players cannot sue as a class, as doing so implies equivalency between players who take the field thousands of miles away from each other and overlooks the fact that some players are compensated extremely well, receiving massive bonuses upon signing their first contracts. If the class-action status is not restored, any ruling would only apply to the experiences of the players involved and may not have broader effects on minor leaguers generally.

The plaintiffs, in turn, say that these arguments are less airtight than the MLB suggests. Even across different states, minor-league teams conform to a uniform pay scale. And though some players make millions on their signing bonuses, the plaintiffs allege that contracts like this—and, more broadly, those of players who are picked in the earliest rounds of the draft—are the exception rather than the rule. Though the MLB only publishes data on contracts through 10 of the annual draft’s 40 rounds, according to Garrett Broshuis, an ex-player-turned-lawyer spearheading the Senne case, “most players drafted outside the top 10 rounds sign for less than $....”



Zola characterizes the suit as part of a groundswell of what he calls “athlete advocacy.” With broadcast revenues continually increasing, Zola says, “there is an added incentive for the players—in professional sports, at the Olympic level, at the amateur level, and in college athletics—to stand up and say, ‘We’re playing a role in creating this value. It’s time for us to be compensated as such.’”

Though increasing salaries would make a big difference for many minor leaguers, many commentators agree that raising minor-league salaries would not significantly affect the league’s bottom line: The MLB made nearly $9.5 billion in 2015, and the average operating income for a major-league team in 2016 is project.... Likewise, arguing that raising pay would adversely affect poorer teams—the penny-pinching Oakland Athletics of Moneyball fame, for instance—and thus disrupt competitive balance overlooks the fact that the relationship between a team’s valuation and its profits is tenuous at best.

A decision for the plaintiffs in Miranda, meanwhile, could have major ramifications not just for the players but for the overall structure of organized baseball. Already, the relationship between major-league and minor-league teams is unique among American professional sports: Basketball and football players typically jump straight from college to the NBA or NFL without years of post-draft development; minor-league hockey teams do exist, but most aren’t officially affiliated with the NHL.



These differences arise in part because the skill gap between amateur baseball and the Majors is significantly larger than it is for other sports: Since 2000, only two drafted players have debuted on major-league teams without playing for a minor-league one first. But the antitrust exemption also plays a key role in enabling the partnerships between major-league and minor-league teams, allowing them to partner in ways that may be deemed collusive in other industries. “[If] that antitrust exemption goes out the window,” Grow suggests, “then you could reasonably question, well, does this whole minor-league structure violate antitrust law? Why is it that the Toledo Mud Hens are agreeing to be subservient to the Detroit Tigers and not compete with them when they're 50 miles away?”  

“If you bitch first, and you're not that good, they will release you and then somebody will take your spot.”

These lawsuits are not, strictly speaking, necessary for implementing the changes the players seek: Minor leaguers could potentially acquire enough leverage to improve their lot by forming a union. But there are several reasons why that movement would have difficulty gaining traction. For one, any attempts to unionize would be happening at a nadir for organized labor; the MLBPA, meanwhile, was founded in the 1960s, a high-water mark for unionization in the U.S. Further, Broshuis has described unionization efforts as a non-starter among players. “They’re chasing this boyhood dream that they’ve been after since they were three or four years old,” he told Mother Jones in 2014, “so guys are reluctant to do anything that might place that dream in jeopardy.”

Hayhurst was more blunt in his explanation: When unionization talks begin, he says, players worry that, “if you bitch first, and you're not that good, they will release you and then somebody will take your spot.” Moreover, forming a union would be logistically difficult. “It’s really hard for guys making that little, who don't know each other, who have no method of communicating with one another, to somehow pull enough numbers together to threaten Major League Baseball with their demands,” Hayhurst says.



These problems are arguably even more acute for players who enter the league from foreign countries, especially Latin American ones. The Washington Post described how unlicensed scouts called buscónes recruit Dominican teenagers, often from destitute backgrounds, to the Minors in exchange for a chunk of their signing bonuses. For many with whom Hayhurst played, a minor-league salary, he says, “is more money than they’ve ever had. Why would they want to piss on that?”

Grow and Zola point to additional difficulties in attempting to form a union. Zola listed several tricky questions a union would need to consider: “Who qualifies? Is it someone who’s drafted, someone who signs, someone who has been in the league with a certain amount of service time? Do you forgo your membership the second you make a 40-man roster [for a major-league team]?”

Grow believes that the players’ best chance for unionization might be if they were to win one of their lawsuits, particularly Miranda. If the MLB suddenly found its antitrust exemption in jeopardy, Grow says, it would actually be in the league’s best interest to encourage minor leaguers to unionize. Doing so would invoke what lawyers call a nonstatutory antitrust exemption, which basically says that, if both the players and the teams have voluntarily entered into non-competitive agreements, future cases would be treated as labor disputes rather than antitrust issues.



As Hayhurst sees it, whether or not the lawsuits succeed in court is secondary to the attention they bring to the struggles of life as a minor leaguer. While many people who read his book express surprise and sympathy, he says others reject the idea that they should feel sorry for professional athletes. He characterizes the opposition as resentment: Casual fans, Hayhurst says, “associate players with getting to live the dream, and if you're living the dream, you have zero right to bitch about anything, ever,” especially considering that “the most successful versions of you make oodles of money, the amount of money that small countries make.”

Hayhurst finds this attitude misguided, pointing to the fact that many minor-league players wind up in significant debt with few marketable skills on which they can fall back. Though he thinks favorable verdicts are unlikely—“the war chest that the Major League Baseball Players Association has, and just Major League Baseball in general, just outstrips everybody that would stand up against it,” he says—he hopes that the increased attention the suits have brought will lay the groundwork for better pay.

As the lawsuits proceed, the ex-minor leaguers are likely to face resistance not only from the MLB but also from other quarters as well. In June, Representatives Brett Guthrie, a Republican from Kentucky, and Cheri Bustos, a Democrat from Illinois, introduced the Save America’s Pastime Act, which would make Minor League Baseball’s exemption from the minimum wage explicit and permanent. The law is seen as unlikely to pass—Bustos withdrew her support a few days after introducing it—but its framing is nonetheless remarkably telling. In the name of “saving America’s pastime,” some members of Congress have proactively suggested keeping thousands of minor leaguers in poverty.

http://www.theatlantic.com/business/archive/2016/09/minor-leagues-m...