Without antitrust exemption, MLB’s ability to govern working conditions for minor leaguers ‘may not be possible,’ says Rob Manfred

In a letter to the Senate Judiciary Committee, Major League Baseball commissioner Rob Manfred argued that “it may not be possible” for the league to enforce, establish and maintain better working conditions for minor leaguers if the antitrust exemption is stripped.

Additionally, Manfred said that without the antitrust exemption, it was “more likely” that Minor League affiliates would leave their current communities.

“Without coordinated oversight and decision-making by MLB, it is likely that more Minor League affiliates will leave their existing communities for a superior player-development environment, and that fewer — rather than more — Minor League clubs affiliated with MLB clubs will exist in the future,” Manfred wrote.

The letter from Manfred comes nearly two weeks after the Senate Judiciary Committee, led by Democratic Sen. Dick Durbin of Illinois, Republic Sen. Chuck Grassley of Iowa, Democrat Sen. Richard Blumenthal of Connecticut and Republican Sen. Mike Lee of Utah asked the league to explain the potential impact of stripping away the league’s antitrust exemption on the minor leagues.

In 1922, the Supreme Court ruled that MLB was exempted from the Sherman Antitrust Law of 1890, allowing the league to have an effective monopoly on baseball in the United States.

In a 17-page document, Manfred argues that the league must maintain the current player development system because it already spends $1 billion annually to support the minors, which do not make a profit and are subsidized by MLB teams. This allows teams to provide to low ticket prices and remain in areas that otherwise could not “economically support a professional baseball team.”

In 2021, MLB teams made a combined revenue of $9.56 billion. The combined net worth MLB owners is $96.55 billion, according to Statista.

Manfred stated that work stoppages have not affected the operations of the minor leagues. Additionally, Manfred said that minor leaguers must sign the uniform player contract because it is the “product of collective bargaining with the Players Association.”

The uniform player contract signed by every minor leaguer states that teams control the rights of players for up to seven years in the minor leagues and seven years in the major leagues. Due to the antitrust exemption, if a minor leaguer decides to stop playing the sport before the seven years elapse in the minors or the majors, the team owns the rights to player and he cannot play the sport professionally elsewhere unless he is released from his contract.

As a result of the antitrust exemption, baseball players who sign the uniform player contract cannot seek better pay elsewhere. Currently, players make a minimum of $700 in Triple-A, $600 in Double-A, $500 in Single-A and $400 in the complex leagues. Six teams, according to Advocates for Minor Leaguers, do not pay players in extended spring training. In 2022, minor leaguers will make an annual salary between $4,800 and $15,400. The U.S federal poverty guideline for one person in most states in 2022 is $13,590.

Players also receive signing bonuses, ranging from $1,000 to the $8 million received by Gerrit Cole in the 2011 draft.

In mid-July, Manfred stated at the All-Star Game that he “reject[s] the premise” that [minor leaguers] are not paid a living wage,” prompting a tsunami of criticism.

“I kind of reject the premise of the question that minor league players are not paid a living wage,” Manfred said when asked whether owners can’t afford to pay minor leaguers more or simply choose not to. “We’ve made real strides in the last few years in terms of what minor league players are paid, even putting to one side the signing bonuses that many of them have already received. They receive housing, which obviously is another form of compensation. I just reject the premise of that question. I don’t know what else to say about that.”

Additionally in the letter, Manfred said MLB would not be able to mandate housing, training standards, health insurance benefits, pension benefits, per diem meals, integrity policies, the number of affiliates and minor league exclusive territories without the antitrust exemption and that subjecting the minor leagues to antitrust scrutiny would not benefit the fans because some teams could decide to cut back on minor league affiliates if they cannot mandate the four that are currently required.

“There also may be fewer – not more – games conducted by each Minor League affiliate because some clubs will choose to provide players with more rest and training time during the season, rather than actual game experience, during their development period,” Manfred said.

But that sentiment is not held by every major league team. One American League general manager said that minor leaguers would benefit from higher wages because their internal studies have shown that players who are better compensated and life conditions develop into better baseball players.

“I think they should have a union to negotiate better salaries,” the American League general manager said. “It would also get rid of the bureaucracy that exists in enforcing things like the minor league housing policy that does not uniformly apply well to every single person’s situation.”

Manfred also stated that the antitrust exemption allows the league to investigate and sanction misconduct in the market for international prospects that lead to teenagers taking performance-enhancing drugs to backchannel dealings with scouts and trainers.

Major League Baseball also previously lobbied for the Save America’s Pastime Act – which aimed to exempt minor leaguers from minimum wage and maximum hour requirements – stating that it would prevent minor league contraction. However, 42 minor league teams lost MLB affiliation before the 2020 season. When asked about how the contraction affected the minor leagues, Manfred said that working conditions improved and allowed the league to enforced reduced travel for teams and argued that the minor leagues would become less favorable to players, fans and communities without their ability to mandate standards on the minor leagues.

“[Minor leaguers] are not permitted to perform work outside of their schedule without approval, and are not paid for days or periods in which they do not work,” Manfred said. “Such a system is antithetical to ultra-competitive fields such as acting, music, sports or other creative or entertainment pursuits in which the chance of success is slim but the potential reward is substantial.”

The letter represents the second legal response from Major League Baseball in July addressing the minor leagues. On July 15, MLB agreed to pay $185 million to settle a federal class-action lawsuit filed by minor leaguers who sought pay for minimum-wage and overtime violations by teams.

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