The Winter Meetings (which are actually the MiLB Winter Meetings) are the time of year when baseball collectively loses its mind and goes on a multi day spending bender. By the end a bunch of players will have contracts with many zeroes and teams will have made trades that will have offended multiple fan bases. It isn't hard to see the entire thing as a display of excess and extravagance, and to some level greed.
This year the meetings kicked off with this.
Source: Melancon deal with #SFGiants expected to be four years, $60M-$65M.— Ken Rosenthal (@Ken_Rosenthal) December 5, 2016
As others have reported, starting with @TBrownYahoo, Hill with #Dodgers is 3 years, $48M. Awesome payday for guy who has been through a lot.— Ken Rosenthal (@Ken_Rosenthal) December 5, 2016
Those are large sums of money. No one is denying that. But the game is flush with cash as teams sign local TV deals in the billions and MLB Advanced Media revenues expected to have topped $1 billion in 2016 and continuing to grow at a staggering rate. Ticket prices for the most part keep rising and the game is coming off of an incredibly exciting post season.
It is easy to get caught up in the large numbers players are signing for. Especially when we have major statistical analysis outlets pushing the theory that frugality and efficiency is of greater value than winning games. It is hard to see ownership profits, especially in cases where teams are funneling that money through local networks to keep their apparent revenues looking lower.
This gives the illusion that baseball is lucrative for all involved. Then we get this.
Phillies' Dylan Cozens notes $8,000 award for most HR in MiLB is more than his salary last season at Winter Meetings awards luncheon.— Brandon Liebhaber (@B_Liebhaber) December 5, 2016
For those that are not too familiar with minor league pay this should help reinforce Dylan Cozens' point.
Low-A ~$1,300/month— Tepid Participation (@TepidP) June 29, 2016
They're paid only during the season. Apr-Aug.
That $8,000 award is not some arbitrary amount, that is $200 per home run hit by Cozens this year, meaning his teammate Rhys Hoskins missed out on doubling his 2016 salary by a mere 2 home runs.
Cozens is one of the lucky ones too. He signed as a 2nd round pick for $659,800 in 2012 and he was just added to the 40 man roster this offseason meaning he will receive a sizeable raise in 2017 (actual amount is unknown but somewhere just over $40,000 a season for first year on 40 man roster). He is the exception. There are many minor leaguers toiling away who did not receive a bonus of any significance or only enough to get them through a year or two, not 5+ years in the minor leagues.
This does not appear to be changing any time soon. There is currently a lawsuit underway to force major league baseball to pay minor leaguers a wage that complies with Federal Minimum Wage laws. However, that is being fought at many levels, including this now.
MILB's Stan Brand announces start of MILB Political Action Committee to lobby for MILB re: "our legislative issues." I.e.,player lawsuit— John Manuel (@johnmanuelba) December 5, 2016
Called creation of PAC "crossing political rubicon." This is all to fight player lawsuit. Also reconstitute minor league caucus in Congress— John Manuel (@johnmanuelba) December 5, 2016
Pat O'Conner says PAC makes it incumbent on every owner in minors to participate in PAC, I.e., fund the PAC. "You must participate."— John Manuel (@johnmanuelba) December 5, 2016
Pat O'Conner with more political talk than I ever have heard here. Minors lawsuit about player pay still scares the minors.— John Manuel (@johnmanuelba) December 5, 2016
That is minor league team ownership leading this fight, not major league teams. For those that are unfamiliar with the way minor league salaries work. Minor leaguers are paid by the major league clubs who supply them and the coaches to the minor league teams. This means that minor league teams are funding political action to save major league owners money.
We are also not talking about a lot of money to be able to pay minor leaguers a fair wage. There are roughly 160 minor leaguers in each organization structured like the Phillies (4 Full Season, 1 Short Season, 1 Domestic Complex), of which roughly 15 are on the 40 man roster so let's reduce that 145 players per team unprotected by current rules or roughly 4,350 baseball players. Let's say we don't crazy and they all get the $40,000 Cozens gets next year for 5 months of work (I am ignoring foreign leagues for right now, but there are roughly 30-60 players per org in the Dominican Republic). So here is some back of a napkin math (assuming we are saving AAA salary with our 40 man players).
Estimated Current Minor League Salary Costs: $25,000,000
Estimated $40,000 a year salary: $174,000,000
That is a big difference and we can call it $150,000,000. But when we break it down to a team by team basis, that is $5,000,000. That is a David Hernandez per organization to pay ALL of their minor leaguers. Teams should be motivated to this because they can save a David Hernandez by having just one player became a big leaguer purely by taking care of this aspect of their life.
Instead baseball is ready to continue to fight against this change with their time and money. They will continue to use things like the Hill and Melancon contracts to show players greed and to distract from the money they are making and not paying the most vulnerable people in the game.