How Minor League Baseball Teams Work

History of the Minors

According to minor leagues expert Bob Hoie, the first recognized minor league was the Northwestern League, which was organized in 1882. League officials sought cooperation and protection of player contracts from the National League -- a necessary step because independent clubs often lost their best players during the season to the National League and, later, to the American Association clubs.

In 1883, the Northwestern League, the National League and the American Association signed an agreement that bound the clubs to honor the contracts of players on reserve lists, to recognize each other's suspensions and expulsions, to establish territorial rights and to form an arbitration committee to settle disputes. The agreement also set minimum salaries -- at a higher level in the National League and the American Association and lower in the Northwestern League -- and basically assigned "major" or "minor" status to teams, Hoie said.


In 1885, a new National Agreement was adopted, making the National League and the American Association (which had just accepted the Interstate Association as an "alliance" league) the principal parties and removing from minor league clubs the protection of the reserve clause. Two years later, that clause was reinstated for the minors, but the lines had been drawn and the major-minor league distinction had been formalized.

The next new National Agreement, which came on the heels of the American Association's collapse in 1892, established minor league classifications for the first time and awarded major league teams the right to draft minor league players at fixed prices. (While all these negotiations were underway, the number of minor leagues in the country had grown from two in 1883 to 17 by 1888.)

Briefly, organized baseball was confined to the northeast quadrant of the country, expanding to the South in 1885, to the upper midwest in 1886, to California in 1887, Texas in 1888 and the Pacific Northwest in 1890.

Meanwhile, the Negro Baseball League, which was being raided (for players) by the partially integrated minor leagues, sought -- and received -- protection under the National Agreement. Unfortunately, economic woes and, some say, the pressures of the times, led to the closing of the league two weeks later. According to Hoie, that kind of casualty was common during the 19th century when more than 40 percent of the leagues that started a season failed to finish it.

Minor league baseball continued to hang in there with its core supporters over the economic battles of the next several decades -- battles that often focused on draft issues and salaries and pitted majors against minors and higher minors against lower minors.

By 1963, 90 percent of the minor league clubs were major league affiliates and the overall number of minor clubs was down. But that had changed by the 1980s, when minor league baseball exploded (experts aren't sure why), topping 20 million in attendance in 1987 for the first time since the 1950s. The Buffalo, N.Y., team set an all-time minor league attendance record with 1.1 million in 1988. And -- in what may have been the catalyst for the 1990 major-minor crisis -- minor league franchises, which could be picked up for a song in the 1970s, were being sold for millions.

The Professional Baseball Agreement that binds the majors and minors was set to expire at the end of 1990. Under that agreement, the majors provided significant support for the minors. The majors proposed a reduction in those subsidies, claiming that the minors were healthy enough to pay more of their operational expenses. On the other hand, minor league clubs resented what they perceived as attempts to take financial advantage.

After the dust settled, most minors gave in, fearing they couldn't survive without players provided by the majors. Under the new agreement, the majors would still pay most of the operational expenses, but minors were now required to pay a share of their ticket revenues to the majors, forego their share of big-league TV revenues and meet newly established minimum standards at their parks.

It was generally believed that these changes would reduce minor league clubs' profits and, in the process, stabilize or reduce the value of franchises, Hoie said. This did not turn out to be the case; in 1992, the Las Vegas franchise sold for a record $7 million and some less-than-successful Class A franchises were sold for more than $1 million each.

Despite the positive trends of the past decade or so, not all minor league clubs enjoy the degree of success of Buffalo, Indianapolis, Louisville and Durham clubs; around 25 percent of the clubs still draw fewer than 1,000 fans per game. Only time will tell if minor league baseball's roller-coaster ride of the past century will continue.