UTK Short 12/29/22

The Coming Wave of Outsourcing

For years, minor league baseball operated under a different rule set than the major leagues. Players had no protections, no representation, and pay that bordered on indentured servitude. Add in little incentive to help with housing, nutrition, and travel accommodations that hadn’t changed since the 1950’s and it’s no wonder so many players had such a difficult time. Adding these kind of life issues to a high-failure development environment never made sense and many teams saw “can’t miss prospects” do just that, time and again.

2023 will be different, after the sea-change of union representation and a commitment to more fair pay. However, many teams are already looking for ways to reduce costs and are going to do it the way businesses have been doing it for decades - outsourcing. With MLB teams expected to spend an additional $4m, per ESPN, any way to cut those costs will be investigated.

If players are paid by the hour - something many believe could be negotiated in the first MiLB collective bargaining agreement - then reducing those hours is an easy way. Game time can’t be controlled and travel is mandatory, but things like medical rehab, pre-game/in-season workouts, extra work, and virtually anything outside the game itself, could be outsourced.

Many players are already heading this direction, with even minor leaguers scraping together money to work out with Driveline or Cressey in the off-season. Paid more fairly, it’s more likely that they can buy the best training, but for teams, it’s offloading some of the cost as well. Look for some teams to come up with volume discounts to appear the good guys.

On the other side of that, teams might become reluctant to have more coaching and development staff. Medical staffs and support staffs are already bare bones, so there’s little fat to cut off the bone there anyway. Where there might be changes is in the rehab work. Again, pushing that to a physical therapy clinic would keep players from punching the clock and adding to their hours. (There’s some technical rules here that could affect this, including a case involving Apple stores that’s currently under appeal.)

All this could be wiped out by a negotiated salary, but remember that the issue that led to all this was the “hours and wages” lawsuit that was settled. The voluntary recognition of the MiLB players came shortly after this. If the CBA doesn’t come, the existing rules stay in place.

According to labor expert (and friend of UTK) Eugene Freedman, “it is an unfair labor practice for the employer to change the status quo work and pay rules during bargaining without the agreement of the union. The unilateral grant of a new benefit or a pay raise is bad faith bargaining no different than a pay cut or termination of an existing benefit, because they both undermine the union’s role in negotiating pay, benefits, and working conditions with the employer. That said, the existing rules now include the settlement in the Senne case, so throughout spring training and complex leagues MiLB players will be paid in accordance with state wage and hour laws in Arizona and Florida.”

Another complicating factor is that there are minor league teams in almost every state and unless there’s a CBA agreed to, the rules could be different in every state until there is one. Things as simple as the definition of work and the minimum wage are vastly different from state to state. A pitcher in the Yankees organization might get less money if he’s promoted from Somerset ($14.25/hr in Massachusetts) to Scranton ($7.25/hr)!

MLB owners are notoriously cheap, Steve Cohen aside. If outsourcing as much as possible at the minor league levels seems pennywise and pound foolish, well, that’s pretty standard as well. Don’t expect big post-game spreads, long team meetings, or any real extras, not that the minors had a lot of extras in most cases. Travel could be scheduled outside of work hours and not payable in some cases, though again, this is likely to be addressed in the CBA.

Where this could be worst is at the complex. One MLB development staffer told me that in planning for the upcoming season, they’ve been told to limit hours and even limit access for the players that need it most, those early-career and post-draftees. If bullpens and batting cages are forced out of the complex and into a nearby baseball facility, you can imagine how quickly Phoenix is going to be overrun with industrial space facilities with lane after lane for pitching and batting.

Worse, the increase in data will be complexified by this. An athlete that does a pen off-site and has his Rapsodo data couldn’t share that with the team. Things done “off the clock” couldn’t be pulled back in by the team’s coaches without risking it being deemed “on the clock.” The solution is to use a third-party data aggregator, especially one that could contextualize the data. (Have I talked about Northstarr lately? Call me, owners.)

There’s always unintended consequences of any move, but I doubt many thought that a minor league CBA might push baseball to hasten the outsourcing that’s been happening over the last decade. Better, more personalized training could be good, but the lack of development time and guidance could be bad. We simply won’t know for decades to come and the consequences could be a lot more can’t-misses missing in the meantime.