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Major League Baseball Is Doing The Right Thing
Huddle Up is a daily letter that breaks down the business and money behind sports.
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Hey Friends,
Major League Baseball (MLB) is a massive business.
As the oldest professional sports league in the United States, Major League Baseball generates more than $10 billion in revenue during a typical year. The 30 teams play a combined 4,860 games over a 6-7 month stretch, and the average club brings in more than $330 million in revenue annually.
Major League Baseball Revenue
2010: $6.14 billion
2019: $10.37 billion
Unsurprisingly, those numbers have translated into incredible value for the owners of each team. Today, the average MLB team is worth $2.2 billion, and the collective fair-market value of the league's 30 franchises is nearly $70 billion.
Most Valuable MLB Franchises
New York Yankees: $6.75 billion
Boston Red Sox: $4.8 billion
Los Angeles Dodgers: $4.62 billion
Chicago Cubs: $4.14 billion
San Francisco Giants: $3.49 billion
But here’s the interesting part — despite Major League Baseball being an incredibly lucrative business for almost everyone involved, the roughly 7,500 players that compete throughout the minor league system are not nearly as fortunate.
Here are the current salaries across minor league baseball, including the 38% to 73% pay increase that Major League Baseball implemented this year.
For High/Low-A, the weekly minimum pay increased from $290 to $500.
For Double-A, the minimum increased from $350 to $600.
For Triple-A, the minimum increased from $502 to $700.
A pay increase is excellent, of course, but given that players are only compensated for the ~21 weeks each year that they are actively playing baseball, the average minor league player only makes between $10,000 and $15,000 per year.
For Single-A players, that’s $10,500 in total salary for five months of work.
For Double-A players, that’s $12,600 in total salary for five months of work.
For Triple-A players, that’s $14,700 in total salary for five months of work.
For context, even if you doubled the salary to account for offseason work, it would still be less than the average income of a high school janitor in the United States.
But liveable wages are just one part of the problem. There are so many things that minor league players deal with that often go unnoticed. For example, not only are players responsible for their transportation, phone bills, laundry, and dining, but they also need to find themselves housing.
Historically, players have had two options. Either find a host family within the community willing to rent you a bedroom in exchange for ~$150 to $250 per month or split an apartment with other players in the organization, often jamming 3-4 people in a single bedroom to make the economics work.
Here’s a picture of former player Tom Koehler’s first minor league apartment:
Keep in mind, not only does the language barrier often make things more difficult for international players, but if a player is traded to another team mid-season, most organizations only provide hotel accommodations for 3 to 4 days before the player is expected to find housing. Oh yeah, they are also expected to adjust to a brand new city and perform their best on the field.
The good news? This appears to be changing, finally.
Last night, ESPN MLB Insider Jeff Passan reported that Major League Baseball will require all teams to provide housing for minor league players starting in 2022.
Here’s a statement from the league:
"MLB is engaged in a multi-year effort to modernize the minor league system and better assist players as they pursue their dreams of playing in the Major Leagues. In 2021, we increased the salaries for minor league players by 38-72%, depending on level, and significantly reduced travel requirements during the season.
In addition, hundreds of millions of dollars worth of improvements to minor league ballparks around the country are already underway, including substantial renovations to player-facing facilities like locker rooms and training rooms."
It’s easy to get excited about this, but the details are scant. Will teams provide a stipend that fully covers housing costs? Will they provide the lodging themselves? Will they build apartment complexes near ballparks? We’ll see how it plays out.
Still, this is an obvious step in the right direction. Organizations like Advocates for Minor Leaguers, More Than Baseball, and others, have fought long and hard to increase the rights of minor league baseball players across the country.
The thing that has always bothered me about minor league housing is that it really shouldn’t have ever been a debate. In most scenarios, decisions seem to be either-or. If I make this choice, it has an equally negative consequence on the other end.
For example, most would assume that if MLB teams were required to provide housing for all minor league players, that would negatively impact the salary of coaches, stadium employees, and others.
But that’s not the case. Most MLB teams estimate that it will cost less than $1 million annually to provide housing for all minor league players within their organization.
Think of it this way — the average MLB team brings in roughly $330 million in annual revenue, meaning that a $1 million housing expense is just .3% of their budget. That’s nothing.
The Houston Astros deserve credit for being the first team to provide furnished apartments to minor league players at all levels for the 2021 season. Now other teams are following their lead. That’s great, but providing players with a liveable wage needs to be next.
I hope each of you had a great weekend. We’ll talk tomorrow.
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Huddle Up is a daily letter that breaks down the business and money behind sports.
Join more than 48,000 professional athletes, business executives, and casual sports fans that receive it directly in their inbox each morning — it’s free.
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