What is particularly interesting about the Brewers’ overall franchise valuation leap, which sees the club crack the $1 billion mark, is that Forbes viewed the club as one of the most dramatic one-year franchise value changes in MLB:

The progression of estimated operating income over the last four years appears to be consistent with Forbes‘ assessment of the Brewers as one of the largest growing franchises in the MLB:

Additionally, Rob Mains scrutinized the Forbes analysis at Baseball Prospectus, adding long-term analytics such as Compound Average Growth Rate. In Mains’s estimation, the Brewers leap from their standing as a bottom third organization (in terms of overall franchise value) into the solid middle tier of the league in terms of their consistent annual return. Mains estimates that Attanasio’s group could have spent approximately $16 million in additional revenue each year of ownership and still maintained an 8 percent return on investment. Coming from a 1,055-1,064 (.498) tenure as owner one wonders whether $224 million could have found a useful place in Brewers blue.

Rebuilding as Capital Expansion
While most Brewers fans view the rebuilding efforts of the club as a baseball operation, leaving debates to the details of whether or not the club should have “tanked” or whether they went far enough in stripping down the MLB roster, the rebuilding efforts can also be viewed as a capital expansion for the club. Witness the Miller Park renovations entering 2017, the 2017 purchase of the Carolina Mudcats (and alleged rumors about further minor league ownership talks), and the upgrade of their Arizona facilities as three key examples of capital expansion for the ownership group. What is most interesting about these purchases and renovations is that they need not represent uses of the operating revenue listed above; through the magic of debt finance, the Brewers can leverage their position of financial strength and arrange partnerships or loans (or both) that allow them to continue their stream of fantastic revenue flows and increase those flows (by adding minor league teams, improved facilities, and better concessions at Miller Park).

It is worth questioning how Forbes considered these elements of the club in assessing franchise value. Given the Brewers’ control of the Carolina Mudcats (and presumably more routes to depreciation and other financial benefits) and additional streams of revenue in Arizona and Milwaukee alike, the growth figures already exhibited by the club could be on the “low end” of the club’s valuation. Would anyone be surprised if Mark Attanasio and his ownership group sold the Brewers for $1.3 billion or more? The Miami Marlins were able to fetch a 28 percent increase over their Forbes valuation in an awful financial situation, which leaves one wonder whether even a $1.3 billion price is low for the Brewers.

The rebuild is an unmitigated success for Mark Attanasio’s ownership group. Since GM David Stearns did go quite far in stripping the club’s roster, the Brewers have opened a five year contention window with precious few guaranteed contracts on the books. According to Cot’s Contracts, the highest collection of guaranteed contracts that Milwaukee is obligated to pay from 2019-2023 is around $66 million (entering next season). Granted, a set of contract extensions (10 years / $200 million for Orlando Arcia, please!) signed during the 2018 season could increase the long-term contractual burden for Milwaukee, but the point is, it is not a necessity. Stearns has shown an ability to shrewdly acquire low cost talent (Manny Pina, Jonathan Villar, Keon Broxton, Oliver Drake, Junior Guerra, even [arguably] Chase Anderson), and a preference for turning “big” money into smaller money even when it’s not necessary to improve the club (witness the Jett Bandy for Martin Maldonado trade). It would be interesting to know the extent to which Attanasio and Stearns discuss the financials of the team; one wonders whether Stearns is an explicit member of the Attanasio ownership expansion efforts, or an unwitting participant (in which case I certainly hope Stearns asks for his fair cut, soon). Perhaps the former case explains why Stearns’s contract details were never released.

Where does Attanasio go from here? It is difficult to argue that Attanasio needs to spend simply for the sake of spending. For one, even in this offseason’s depressed market, there were some highly praised players that signed poor contracts (see Lance Lynn, whose $19 million three-year surplus value turned into a one-year, $12 million contract, or Alex Cobb, who spun $14 million surplus value into a $57 million contract). It is difficult to argue that either pitcher would have markedly improved the Brewers for their given prices. Contrary to popular belief, both are bad contracts. In terms of the big contracts handed to Yu Darvish and Jake Arrieta, one can question their strengths, but it cannot be argued that the Brewers did not have room to sign either ace; Milwaukee’s opening day payroll of $91 million is currently operating at approximately 75 percent of their realistic payroll ceiling. Of course, the Brewers ownership group has no mandate to spend money on the field, certainly not under the Manfred regime.

Additionally, there’s a legitimate sense that so long as the MLB operates without true revenue sharing across markets (a la the National Football League), a club like Milwaukee is arguably better off with a flexible payroll. Given that even the Brewers’ strongest realistic 2018 payroll was two or three elite contracts below the MLB luxury tax threshold, there is no way that Milwaukee can seriously maintain a set of high roller commitments like their closest division rival to the south. In fact, if the Brewers maxed out their realistic payroll between $115 to $120 million in 2018, twenty MLB teams would still have higher opening day payrolls; adding in MLB Advanced Media Revenue and assuming a wild $140 to $150 million figure would barely crack the top ten. The reality is that anyone complaining that Brewers ownership is uncommitted to winning because of their low payroll would have the same material facts even if the Brewers paid their highest realistic payroll entering the season.

In a strange way, $91 million feels just right for this club, and not simply because that figure represents a 15 percent increase over the 2017 year-end payroll.

The Brewers are stuck in a strange place as an organization. Financially, Milwaukee is as solvent and successful as ever, positioning the team as a true “grower” within the MLB. Yet, even given the robust MLB revenue landscape, the Brewers are working with relative scraps. Still, it is difficult to see the club undergo a rebuilding process and endure losing seasons while racking up fantastic operating revenue positions, expanding capital spending, and continuing to spend below their most realistic payroll ceiling. There is no happy middle ground here for the Brewers: they scrapped an MLB roster to shift labor costs away from the big league roster and toward the minor league rosters, which also effectively drained revenue from the players and tilted it toward ownership. But, that’s what ownership does, and even within this environment, Attanasio cannot claim to have a *rich* club. One can only hope that this swirling set of circumstances for the small-but-growing franchise corresponds with winning on the field.

Photo Credit: Benny Sieu, USA Today Sports Images

Although collusion would obviously have a significant impact, there are also rational reasons for the veteran free agent market to deteriorate.  Teams have realized that players signed into their mid- to late-30s are bad investments, so they are relying more on younger players to fill roster spots.  Additionally, since the average age of rookies now is 24.6 and thus players don’t hit free agency until they are through their peak years, teams can keep control of these players through their most productive years.  Then, when players become free agents, the next batch of rookies takes those spots.

This is a problem for the players, though, because free agency has always provided the promise of a payday.  Players earn the league minimum salary for their first three years regardless of production, and then they enter arbitration. In arbitration they get more money, but not their market rate.  For example, Kris Bryant has just become arbitration-eligible, and he will be making the most money ever for a first-year arbitration-eligible player: $10.85 million.  By contrast, the Blue Jays signed veteran Jaime Garcia, he of the career 95 cFIP, for $10 million.  One of the ten best position players in baseball will earn roughly the same as a league-average starting pitcher.

Baseball’s system has generally worked because players like Bryant knew they would receive a massive free agent contract after they exhausted their six years of team control.  But if teams stop rewarding players for past performance, then the best players in baseball will never get paid what they deserve.  This is a threat to the balance between players and ownership, and this article will present a possible alternative method.

Any analysis like this requires a certain set of assumptions.  I am assuming here that the MLBPA is interested in maximizing the money their members make (which may not be entirely fair, given the way veterans control union power).  I am also assuming that owners would be willing to pay market value for players who are more likely to perform over the life of the contract (which may not be fair if what we are witnessing is collusion).

With that being said, a system like the NBA’s restricted free agency seems to make sense for baseball as well.  After an NBA player’s fourth season, he becomes a restricted free agent.  Other teams can sign that player to an offer sheet, but the player’s current team has the right to match that contract.  The advantages of such a system are that teams still retain control over their young players, but players are eligible for a large payday much sooner in their careers.  Kris Bryant, for example, could be a restricted free agent at 27 instead of an unrestricted free agent at 30, and so a longer-term contract would make sense because some of his prime years are still in front of him.

This system would not be perfect.  Players still have to be under team control for long enough that a team feels comfortable investing in player development.  Free agency after one year, for example, would likely harm player development because teams would not be guaranteed any reward.  Additionally, this system would still be subject to the type of age manipulation that we currently see.  Teams can hold players down to get more of their prime years in the current system, and the same would be true for any new system as well.  MLB’s minor league system complicates matters, as MLB teams have direct control over when the service time clock begins.

It also would not translate directly from how the NBA does it.  The NBA’s maximum salary is not mirrored in baseball, as teams have cost certainty for their young players even once they have hit free agency.  This does not exist in baseball; Bryce Harper could sign for $30 million per year next offseason if he wants a ten-year contract, or he could sign for $40 million per year if he takes a shorter deal.  The Washington Wizards, on the other hand, knew that they would be paying Otto Porter about $25 million this season because that was the most he could be offered.

Another problem with the NBA’s restricted free agency is that it allows teams to keep players for nine years before they hit free agency.  NBA players generally make their debut at 19 or 20, so they still have productive years ahead of them when they finally hit the open market.  But because baseball players debut so much older, this system would not allow players to switch teams in their primes.  Tweaks would have to be made.

One of the most important tweaks would have to be to the timing of restricted free agency offers.  In the NBA, teams make offers to players, and then the player’s original team has three days to decide whether or not to match.  In that time, the offering team’s money and roster spot are tied up.  This creates logistical problems, where teams know that any offer to a star player will be matched, so they don’t bother making it and instead maintain flexibility.

I have a couple ideas about how MLB could fix this.  First, the MLB could provide a buffer for teams who sign restricted free agents to sort out their 40-man roster situation, so teams wouldn’t have to be stuck in a holding pattern for three days.  They could sign a restricted free agent to an offer sheet and then have a week before they need to officially add him to their 40-man roster.  Second, they could shorten the matching time to just one day to provide less uncertainty for teams.

Third, and most radically, they could have a special restricted free agency window before unrestricted free agency.  During this time, offers would be made, but no other transactions would occur, so teams would not risk losing out on other opportunities while they wait for everyone to decide whether or not to match.  This would create some roster-building issues, as teams would be operating with imperfect information during this first window.  The NFL does this with its draft, however: football teams draft for need at times, but the draft occurs before free agency has opened.  The NFL does not appear to have suffered for this, so it seems as if it would be workable in MLB as well.

The types of contract being offered would be the most interesting aspect, and it is the test for whether such a system would actually solve the problem that we appear to be facing.  My proposal is that after three years in the majors, players would hit restricted free agency.  At that time, all teams would be free to offer those players whatever contract they want.  I think the lack of a maximum salary would remove the “automatic match” problem from all but the absolute top players.

Let’s use Kris Bryant as an example again.  After next season, anyone could offer him a new contract.  Teams may offer him a long-term deal, or they could try and entice him with a high-AAV short-term contract.  The Cubs would have the absolute right to match any offer that is made, though.  The main difference between the current system and my proposal is the player’s age: Bryant would be a free agent at 27 instead of 30, so he will be a more attractive option for many teams.  But because the Cubs still have the chance to match any contract, or offer him a long-term extension before he even hits free agency, they do not lose their access to their young talent.  They just have to pay him more.

This would bring a new level of intrigue to free agency.  Without a maximum salary, the Cubs would not have cost certainty.  Any team could try and find the price point at which the Cubs wouldn’t match; could it be $50 million per season?  Rivals like the Brewers could also force the Cubs’ hand by offering Bryant an over-market deal that is still reasonable enough that the Cubs would feel compelled to match (perhaps at $40 million per season?).  Where NBA restricted free agency can be rote because of max contracts, MLB restricted free agency likely would not be.

Another possibility would be that restricted free agency offers could only be for a maximum of four years.  This would still allow a team to try and offer a ridiculous one-year contract for someone like Bryant or Mike Trout, but it would provide some more certainty for both the team and the player.  Players would know that they will hit unrestricted free agency at no more than seven years after their debut, but they would have an opportunity to make more money before then.

I recognize that a possible problem with this is that it might allow big-market teams to exert their financial influence.  With more desirable free agents, the Cubs, Dodgers, Yankees, and Red Sox might be more involved and more able to spend their way to a title.  Small-market teams would have less of an ability to develop their own cores because they would only be guaranteed three years of big league service time instead of six.  Big-market teams would be able to absorb contracts that small-market teams just couldn’t.  For example, the Yankees could offer Orlando Arcia a contract that the Brewers couldn’t afford to match, simply because the Yankees can afford to absorb more money if the contract turns out to be a mistake.

With that being said, financial constraints are always a question.  Big-market teams have resource advantages over small-market teams, but that hasn’t prevented St. Louis or Cleveland from being competitive.  I suppose it’s possible that this is the change that destroys baseball’s relative parity, but I am skeptical that it would do so given that such hand-wringing never seems to pan out.  The lack of a salary cap did not result in the Yankees buying every World Series; they won their four in five years on the strength of a home-grown core.  Teams are smart, and I expect that small-market teams will be able to adapt to this change just as they have adapted to other ones.

This would be a radical alteration to baseball’s free agency structure, but if teams refuse to sign free agents who are over 30 to market-value deals, then something will need to change.  The players are what drive the product, and they are entitled to their share of the profits.  If they are not going to be rewarded in free agency under the current system, then a new system will have to be devised.

Related Reading: Historical OFP [Includes historical OFP tables]

One added benefit of monetizing minor league Overall Future Potential value is that minor league players can use their OFP to justify significantly larger paychecks from their parent organizations. While fans might expect that minor league players deserve smaller pay checks because of their risk level and because they can “recoup” value once they reach the MLB, those arguments undersell the professional status of minor league players and overlook the reality of suppressed pay at the MLB level. Take Clayton Kershaw, who sat atop the Dodgers system in 2007 as a potential “true Number 1 starter” (so, an 80 OFP). Based on the historical value of 80 OFP players, Kershaw could be reasonably expected to produce at least $587 million in production value, and an average of $845 million in production value; his 80 OFP prospect grade gave the Dodgers organization a whopping $169.1 million in surplus value (ex., Kershaw was so valuable as a prospect that the club would not reasonably trade him for anyone, since the return would be absurd).

Yet, Kershaw himself has served as a criminally underpaid MLB player. The southpaw has produced $389.2 million in production value, amply returning that OFP surplus and then some. First, the Dodgers paid a measly $2.3 million draft bonus to Kershaw, who was the seventh overall pick of the 2006 draft. Minor league contracts are not typically publicized, but it is probably a safe estimate that Kershaw did not earn anywhere near even the MLB league minimum (now $0.5M) as a minor leaguer. Kershaw certainly was not compensated for his organizational surplus value. Prior to signing his $215 million contract extension in 2014, Kershaw earned just over $20 million for a 33.1 performance (worth $211.7 million in savings for the Dodgers). This is a perfect way to look at the seven year extension: Kershaw has been so criminally underpaid that the Dodgers merely offered him their organizational savings from his production value in lieu of his contract extension.

The Dodgers could cut Kershaw tomorrow, paying out the full value of his contract, and still emerge $157.2 million ahead. That’s 22 WARP, if one values WARP at the common free market assumption of $7 million per win above replacement.

One need not use elite players to make this point, however. Scooter Gennett, my recent favorite 50 OFP prospect, is a perfect example of the MLB’s terrible compensation system: selected in the 16th round of the 2009 draft, the Brewers paid Gennett a $260,000 bonus, and the prospect earned a top OFP of 50 as late as 2013. Once again, one must speculate that Gennett did not earn anywhere near league minimum salary in the minors, and the 4.0 WARP player has thus far been underpaid by as much as $26 million in his career despite returning strong historical value on that 50 OFP (Gennett resides within the 91st percentile of every single MLB player in history in terms of his replacement value).

The Brewers have criminally underpaid Gennett, which makes a much better point than Kershaw: it is easy to dream of Kershaw as underpaid because it is easy to dream about a team paying him $400 million on the free market (which is much closer to his actual value than $215 million). Gennett’s underpaid status is more difficult to discern, since it is difficult to imagine the all-hit second baseman earning $28 million over the last four years. Even if one considers that a team would not maximize a player’s total surplus via contract (so that they might sign a contract and retain some trade value), halving that figure to $14 million still readily makes the point that Gennett is criminally underpaid.

Enter OFP as a bargaining chip for minor league players: if a player’s OFP suggests that his historical worth is a certain monetary amount, that amount must also be diminished due to the risk of developing minor league players. In my previous analysis of historical OFP, I crudely sliced historical OFP values by 80 percent to reflect the basic fact that approximately 20 percent of minor leaguers might make the MLB. This produces a chart of values that works quite well in assessing transactional values in trades (for example, Khris Davis’s depreciated value was approximately $35 million surplus prior to his trade, and Jacob Nottingham and Bubba Derby (55 OFP and 45 OFP, respectively) combined to a historical value of $35.6 million — not bad, David Stearns!).

If a player offers that type of transactional value to their parent organization; that is, if a player like Jacob Nottingham or Bubba Derby can be used to net a player like Khris Davis in trade, those prospects should be paid according to their OFP value. Using a basic sliding scale percentage commission, this would return a 55 OFP prospect like Nottingham $342,000 in minor league salary, and Derby $140,000 in minor league salary. One could protest that paying a player like Derby $140,000 in minor league salary over the course of a few seasons would quickly deplete that $1.4 million OFP surplus value. I’d counter that risk slices both ways: why should minor league players bear the bulk of professional development risk through their below-living-wage salaries?

[Again, if this sounds ridiculous, look at it this way: Nottingham is among the very best catching prospects in a near-$10 billion industry. His skillset is such that he can potentially start at catcher and offer an above average power grade, both of which are strong professional feats. The idea of Nottingham earning, say, $1.5 million in salary over five minor league seasons prior to entering the majors should not be absurd, given the revenue scope of the game and the young prospect’s advanced status and OFP.]

The risk of professional development ought to be spread much more evenly, since it is risky for both minor league players and organizations to embark on professional baseball development; this, of course, has the added difficulty of forcing MLB teams to admit that minor league players are professionals (and they are professionals. Minor league baseball players are professional baseball players!).

There are several hidden issues here:
(1) There is no labor system in place for delivering such salaries to minor league players.
(2) There is a certain point where certain league minimum MLB players could indeed earn less than the very best prospects.

Regarding (1), first and foremost the MLBPA must step up and represent minor league ballplayers as a part of the baseball profession. The problematic salaries minor leaguers are paid are not solely the fault of greedy owners — they are also the fault of a certain class of players that are unduly profiting from a professional schism. Once the MLBPA represents all players in affiliated ball, quite an easy mechanism can be put in place to adjust salaries: annual arbitration or salary schedules for minor league and MLB players alike. Regarding (2), some replacement MLB players are not worth a prorated portion of a league minimum salary, 45 grade prospects (that might become replacement players) are worth $140,000.

A more crude system, absent the MLBPA representing minor leaguers, would offer minor league players free agency after two years of organizational development: if you protest, just remember that MLB teams used the argument that players are simply “seasonal apprentices,” so setting those apprentices free every other year should allow them to vastly increase their earnings by creating a free market for MILB talent among teams. If one is inclined to argue that a team should not have to lose a development asset after two years of minor league play, that should provide significant incentive for improving pay by allowing that player the option to work with the organization that will pay them the best (or perhaps, provide the best pay and development strategy combination). What do you think the Cubs would have paid to keep seasonal apprentice Kris Bryant after the 2014 minor league season, for example? Analysts should not shy away from supporting this method: the fact that, say, Trent Clark or Demi Orimoloye are far removed from the MLB and do not yet have clear roles does not mean that the Brewers do not have their value precisely priced; they are two of the 2015 draft prospects that would have immensely benefited from free agency after 2016.

Given the existence of industry sources such as BaseballAmerica and BaseballProspectus that evaluate prospects, there is certainly an independent scouting infrastructure available that could operate an arbitration system to compensate prospects based on their OFP. Such a system could also have the benefit of establishing a much higher salary floor for minor league players; even if a $20,000 salary more accurately reflects the value of an organizational depth player, that salary is not necessarily life changing but will offer more financial support than current minor league salaries (and would be slightly more in line with entry level professional salaries for other fields).

It is deeply problematic that such rich analytic tools exist in the field of baseball, and yet player compensation lags so far behind its justifiable salary levels. Of course, there is a certain extent to which analytical tools are meant specifically to drive down player costs and return revenue to owners. Given the ease of implementing improved compensation — again, there is already quite a strong administrative system in place for arbitration, and there is are representative bodies such as the MLBPA that can assist with matters of compensation — the real issue is political feasibility due to the lack of willpower from MLB ownership and MLBPA. This lack of willpower leaves members of the analytic community to place more pressure on that infrastructure to begin justly compensating baseball players.

Prospects need not only have OFP grades for show: if MLB clubs can trade players for MLB value based on a player’s OFP, they can also justly compensate that prospect by paying them a commission based on their ceiling. OFP need not merely be transactional, or rather, the extent to which OFP is transactional should be expanded to include compensation.

Two congresspeople, Rep. Cheri Bustos (since rescinded) and Rep. Brett Guthrie, both of whom received donations from MLB’s Political Action Committee during the 2016 election cycle, recently introduced legislation H.R. 5580, dubbed the “Save America’s Pastime Act.” The bill officially exempts the MLB and Minor League Baseball from the requirements of the FLSA and denies their employees the rights afforded to them under the law.

Congressman Brett Guthrie and Congresswoman Cheri Bustos introduce the Save America's Pastime Act in House of Reps pic.twitter.com/AL8ohwqwuo

— Josh Norris (@jnorris427) June 29, 2016

Major League Baseball itself doubled down on the issue yesterday, releasing a statement yesterday referring to minor league baseball not as a career, but as a “short-term seasonal apprenticeship.” The MLB essentially claims that it subsidizes minor league baseball as some sort of charitable exercise so that folks living in smaller towns and rural America will still be able to have the privilege of seeing professional baseball being played.

MLB just released this statement on the Save America's Pastime Act. pic.twitter.com/pScjxtvCz8

— Big League Stew (@bigleaguestew) June 30, 2016

So, if playing minor league baseball is a “seasonal apprenticeship,”  how come players aren’t allowed to choose their employer and are instead subject to a draft? Why are they forced to sign seven-year minor league contracts that give them no control over their future? These “apprentices” don’t get to choose what city or even part of the country that they work in. Their apprenticeship could be transferred to another company and part of the country at any time without their prior knowledge or permission, should that player be traded. These apprentices aren’t paid during the offseason or spring training, yet are expected to keep in shape and made subject to random drug tests?

The suggestion by some that minor league teams have anything to do with how these players are paid is also laughable. Player salaries and bonuses are paid by the parent organizations and have nothing to do with the the minor league organizations that these players suit up for. Player development is one of the most essential aspects of an MLB organization; the MLB needs the minor leagues to train and develop future big leaguers. There is more of an emphasis on “young, controllable talent” today now more than ever.

The game is more flush with money now than it has ever been before, as well. The MLB’s revenue last season increased by $500 million, to a total approaching $9.5 billion. Even the Tampa Bay Rays, the league’s least valuable team according to Forbes, brought in a revenue of $193 million in 2015. The idea that increasing minor league pay would lead to financial hardship for MLB organizations or the folding of minor league organizations is simply ludicrous. The MLB statement approximates that there are about 7,500 players in minor league baseball, or roughly 250 per MLB franchise. If an organization were to pay those players an average salary of, say, $25,000 (which would be two to three times more than most minor league players make currently), it would cost about $6.25 million. For reference, that’s slightly less than what the Diamondbacks are paying Aaron Hill NOT to play for them this year. That’s a little over half of the $10.1 million of dead salary that the Braves absorbed in the form of Tommy John patient Bronson Arroyo last year so that they could also acquire Touki Toussaint from Arizona. Jose Reyes and Carl Crawford were both recently released by their employers despite being owed $20+ million in guaranteed money.

Oh, and by the way, the MLB just agreed to a $3.5 billion deal with Disney for a stake in their Video Arm technology. According to Jon Heyman, the payout will be about $120 million to each franchise, or enough for each team to pay out the above-suggested minor league salary for 19 years.

This issue is something that’s unique to the MLB, as well. While football doesn’t have a similar type of minor league system, both the National Hockey League and National Basketball Association utilize lower level leagues for player development. In the American Hockey League, players earning the minimum salary of $42,375 are still pulling in a median US income while the average salary in that league is closer to $90,000. Players in the NBA’s Developmental League earn between $13,000-25,000 and also have housing provided. The players’ unions in those leagues have gone to bat for their minor league brethren to ensure that they aren’t struggling to survive.

Meanwhile, MiLB players are on a scale that pays them between $1,150-$2,150 per month, and only during the regular season. That does not include spring training or any instructional league play. Even draft or international signing bonuses do not typically provide financial security, as $130 million of the MLB’s $311 million bonus pool is allotted to merely 50 draftees; even the bonus slot system only covers 10 rounds, meaning that the vast majority of draftees receive paltry bonuses. Players are required to find their own housing, and as Brewers’ farmhand Chris McFarland recently shed light on, this can lead to situations like his where five players are sharing a two-bedroom apartment in Biloxi. While players are afforded a $25 per diem for meals when on the road, they are required to otherwise provide their own sustenance.  Teams are increasingly willing to spend millions on bonus payments to drafted players or international signees, yet they aren’t willing to invest in making sure these players are able to provide adequate shelter and nutrition for themselves?

The most common argument I’ve seen is that “no one is forcing these players to play minor league ball.” But how does that justify the extent to which minor league players are being taken advantage of? Try applying that to a different market. Because a person could go work at Culver’s or Burger King, should McDonald’s be exempted from the federal wage and hour guidelines and be allowed to pay their employees less than minimum wage? I don’t buy that for a second.

In the past few days since H.R. 5580 was introduced, there has been a significant and negative response from those around the game and beyond. After receiving feedback from her constituents, Rep. Bustos has since withdrawn her support for “Save America’s Pastime,” though perhaps she should have educated herself better before introducing the bipartisan legislation in the first place. The MLB Player’s Association, one of the strongest unions in America, has also voiced their support on an issue they’ve been mostly silent on over the years.

Fr #MLBPA50 statement:
All workers, incl athletes, entitled to statutory protections for minimum wages & OT work. pic.twitter.com/0ektlYRHhl

— #MLBPA50 (@MLB_PLAYERS) July 1, 2016

Hopefully this will foreshadow more sweeping changes across the league, perhaps as a part of the upcoming Collective Bargaining Agreement negotiations. You and I as fans can do our part, as well. Get in touch with your representatives and tell them to oppose H.R. 5580. Don’t allow the government to legislate corporate greed under the guise of “Saving America’s Pastime,” which serves only to benefit billionaire MLB owners and millionaire minor league owners. Saving our national pastime shouldn’t mean lining owners’ pockets while the minor league players they benefit from are left wondering if they’ll be able to make their rent or where their next meal will come from. No one is calling for these players to get rich, but they deserve the opportunity to at least make a living wage while being employed by a $9 billion dollar industry that owns a monopoly over professional baseball in the United States.

The ultimate goal is to find the cheapest labor to produce the most wins possible, whether that means searching for efficient and flexible marginal roster depth or gambling on toolsy players to become multifaceted superstars. It should be no surprise that multiple estimates suggest that the MLB Players Association is losing their traditional share of revenue, even as television contracts and Advanced Media shares soar: through analysis, MLB teams can consistently move revenue shares upwards to management, development, or executive ranks (rather than downwards to players). This development extends from Carlos Gomez’s Brewers contract extension (an unbelievable bargain for an elite power/speed centerfielder) to Clayton Kershaw’s contract, and to many others still. It’s easy to pull over on fans: as real wages decline for a large percentage of the USA, who’s going to care that Gomez or Kershaw might be underpaid by at least $15 million annually?

Austerity may be the best possible term to define the American political malaise of the last 40 years. Alongside private efforts to consistently redistribute capital “upwards” (instead of downwards, to labor), the State has swiftly and effectively acted to erode infrastructure, services, and entitlements in order to disenfranchise labor. This effort for upward redistribution can be found across all levels of Federalism, which further renders labor-side counteractions ineffective, contradictory, or misdirected.

Incidentally, this development correlates with widespread professionalization that is also reflected in the MLB executive ranks, as well as most other aspects of society. Knowledge no longer needs to be “scientific” once each field of proprietary analysts and executives moves true scientific advances into the realm of bureaucratic measurements that self-sustain each industry.

This is hardly a new criticism on my part; it’s hardly new to BaseballProspectus, even, as Rian Watt’s take on sabermetrics and baseball writing shows. For example, Ivan Illich used the progression of “scientific advances” to “bureaucratic/professional monopoly” to undergird his scathing 1973 pamphlet, Tools for Conviviality. Illich used the advancement of medicine as his theoretical entry point, but his argument and method fits many professional fields:

“It is not strictly necessary to this argument to accept 1913 and 1955 as the two watershed years in order to understand that early in the century medical practice emerged into an era of scientific verification of its results. And later medical science itself became an alibi for the obvious damage caused by the medical professional. At the first watershed the desirable effects of new scientific discoveries were easily measured and verified….The positive contribution of modern medicine to individual health during the early part of the twentieth century can hardly be questioned.

But then medicine began to approach the second watershed. Every year medical science reported a new breakthrough…The practice of medicine became centered on the performance of hospital-based staffs….The irresponsible use of drugs spread from doctors to the general public. The second watershed was approached when the marginal utility of further professionalization declined, at least insofar as it can be expressed in terms of the physical well-being of the largest number of people. The second watershed was superseded when the marginal disutility increased as further monopoly by the medical establishment became an indicator of more suffering for larger numbers of people.” (Illich, 1973, 6-7)

One can extract from Illich’s case study two moments in the scientific and professional development of a particular field:

(1) The “first watershed” occurs when the scientific method provides solutions to specific problems, thereby creating new tools of knowledge within a given field.

(2) The “second watershed” occurs when trained professionals commandeer those tools and employ new forms of self-measurement to judge their respective performances.

If one critically engages with, and then sets aside, Illich’s bleak attitude about professional monopolies over knowledge, one can find an extremely useful tension between knowledge and power within many different professional fields. Even the “analysis movement” that developed over the last 40 years (or so) in professional baseball is not immune to this tension. What first began as outsider interventions based on hunches that the game was not being properly measured by traditional statistics fully developed into a professionalized field almost fully controlled by the MLB clubs and their elite analysts and executives. Even the story of Bill James seems impossible now, as the idea that a security guard at a pork and beans factory can provide legitimate insights into professional baseball is now commandeered and rendered illegitimate by Ivy League-trained economists. MLB further proved this development with the release of Statcast, which was kept under close wraps to forbid the big data breakthroughs that occurred with pitch f/x.

The trouble with these new proprietary developments is that MLB clubs will use their own metrics as a form of measurement for their own success, which extracts those measurements from the groundbreaking potential or critical eye of the scientific method. One might also expect MLB proprietary analysis to produce competitive stasis: as clubs subscribe to databases and also build their own algorithms to measure scouting, mechanical, medical, and statistical inputs, the “fields of market inefficiencies” will grow smaller, less predictable, and ultimately more expensive.

The coming battle for the MLB, then, reverts back to some typical fight between labor and ownership over television and media revenue. In some cases, MLB commentators are already seeing the writing on the wall and encouraging clubs to spend more money on players. BP Milwaukee‘s own J.P. Breen and Jack Moore have both treated labor issues in the Moneyball era, as one example. J.P. Breen covered this point in his newsletter, Crumbling Sandcastles (#3, April 12, 2016), arguing in favor of increased spending on minor league nutrition and training (and increased minor league pay, as well). Jack Moore has also extensively covered minor league wages. Here, the idea of exploiting market inefficiencies — essentially, exploiting the cheapest labor possible for maximal gains on the field — will be contradicted by a labor fight that necessitates redistributing revenue downward once again.

Fortunately, as Commissioner Rob Manfred also works to increase diversity within the MLB’s executive ranks, there is a chance that the analytical reins will be loosened (this could open quite a fruitful new era for MLB as salaries also increase). The era of Ivy League economists running MLB analysis and player development will eventually close as new viewpoints and diverse training backgrounds populate the MLB front offices. Here, again, the “next market efficiency” will be contradicted by professional developments that hopefully loosen the hold on this iteration of the proprietary information movement.

Brewers fans might be particularly interested in this development, as one might reasonably question whether Chairman and Principal Owner Mark Attanasio was too late to the game in hiring GM David Stearns. Jack Moore offered pointed commentary on this hiring here at BP Milwaukee, comparing the impressive MLB front office experience of Tyrone Brooks to that of Stearns. Perhaps as the need for a specific type of analyst to assemble and judge proprietary information becomes less valued or necessary by MLB clubs, MLB owners will be more compelled to populate the executive ranks with more diverse personnel (this is as intellectually important as it is socially/ethnically important). Stearns undeniably had a fine first offseason, or perhaps a first offseason without major complaint, which makes the question of his place within broader MLB hiring trends more intriguing and critical.

One might also consider the entrenchment of new analytical tools to be as faulty or misguided as the “old” statistical regime in the MLB. The point of using empirical evidence to describe and analyze baseball is to look for new ways to think about the game, and implement new strategies to gain competitive advantage. The point is not to create a powerful means of controlling information and strategy. As the use of high velocity pitchers or fielding shifts shows (to name two strategies), MLB personnel indeed prefer a type of professional orthodoxy (even while touting innovative analytical measurements to support those strategies). Needless to say, both Manfred and Stearns face tall demands for industry innovation, given these points of conflict.

Returning to Illich’s “two watersheds,” then, points (1) and (2) above will conflict wherever a group of professionals in an industry can corner specific tools to gain a competitive or financial monopoly (in the case of the MLB, increasing the share of revenue for ownership is probably the most crucial benefit of the analytical movement, from their point of view). Fans looking for the “next market inefficiency” can ultimately speed the next watershed, the next return to point (1), by eschewing analysis in favor of other narratives, tools, and methods. One of the first keys to accomplish this task will be to abandon the pro-ownership view of using market inefficiencies to acquire cheap players that benefit the roster greatly, in anticipation (and, hopefully, support) of the forthcoming labor battle. Brewers fans ought to be particularly invested in this next battle, as the actual television market disparities and subsequent need for absolute revenue sharing will become yet another subplot to the fights regarding labor/ownership and executive hiring trends.

References and Recommended Reading:
Breen, J.P. 2016. Crumbling Sandcastles. Self-published: Email newsletter.
Dickson, David. 1974. The Politics of Alternative Technology. New York: Universe.
Fainstein, Norman I. & Susan S. Fainstein. 1982. Urban Policy Under Capitalism. Urban Affairs Annual Reviews v.22. Beverly Hills: Sage.
Illich, Ivan. 1973. Tools for Conviviality. New York: Harper Colophon.
____________. 1996 [1978]. The Right to Useful Unemployment and its Professional Enemies. New York: M. Boyars.
Kuhn, Thomas S. 1996 [1962]. The Structure of Scientific Revolutions. Chicago: The University of Chicago Press.
Macdonald, Keith M. 1995. The Sociology of the Professions. London: Sage.
Sawchik, Travis. 2015. Big Data Baseball: Math, Miracles, and the End of a 20-Year Losing Streak. New York: Flatiron.