I'm a bit surprised that the lawsuit brought by former minor league baseball players Aaron Senne, Michael Liberto and Oliver Odle against various Major League Baseball teams in California is not getting more attention because so far the minor league players are putting up quite a good case.
The lawsuit by the Plaintiffs claims that Major League Baseball teams are routinely paying minor league players less than the minimum wage in California and are in violation of the Fair Labor Standards Act. In case you are wondering why the lawsuit is not against the minor league teams, that is because major league teams actually control and pay the salaries of all players. Minor league teams have no control over personnel.
It should also be noted that minor league players are not benefiting at all from the collective bargaining agreement between the Major League Players Union and Major League Baseball. Minor league baseball players have no union.
The plaintiffs claim that most minor league baseball players earn about $3000 to $7500 per YEAR, but that they routinely work in excess of 50 hours per week during the five month season, not including travel. Additionally, the players are required to stay in shape during the offseason and often they must also participate in other team related activities.
California's minimum wage is currently $10/hour, and that is climbing to $15/hour over the next five years. Let's calculate some of these numbers rough-hand, after all, I'm not the legendary Nate Silver. If the average minor league player is required to attend every game and practice including spring training, they would to work approximately 185 days per year. Most seasons are about 140-144 games, except for players playing in lower levels.
Well, if a player is working 185 days per year, multiply that by $10/hour by 8 hours/day, that should be a salary of $14,800. Now most workers are limited to a 40/hour work week, otherwise they are entitled to overtime - not minor league baseball players. On average, a player is only getting 1 day off per week during the season, so we should calculate that at least once a week for 26 weeks that a player should be entitled to overtime. So, $5 (overtime) multiplied by 26 (days) multiplied by 8 (hours) equals another $1040, for a total of $15,840/year... still barely above the poverty line, but way above the current average.
I'm having trouble figuring out exactly how many minor league players there are, but I think it is around 5300. Let's be generous and say that there are 5300 players earning an average of $7500 per year now, that comes a cost of $40M. (Note, even though some players earn a signing bonus, they are generally relatively small and most still are paid a fixed minor league salary, which is different from the signing bonus.)
Increasing the average salary to $15,840 would result in a cost of $84M, or increase of $44M. That may sound like a lot, but that is going to be divided up over 30 teams, so per team there would be an increase of less than $1.5M per team.
According to the web site, Statista.com, in 2015, the average major league baseball team had gross revenues of $280M. This does not include private revenue that most owners receive via ownership interests in cable TV stations that have rights to the teams' games. The Yankees earned the most with $516M in revenue and Tampa Bay earned the least, at $193M in revenue.
Clubs do not release their expenses, so it is difficult to know how profitable these teams really are and whether or not they can afford to pay more in minor league salaries without making major cuts elsewhere. However, they should start thinking about how they are going to be able to afford to pay more, as I sense change is coming.
Two important separate decisions have already been reached in this case:
1) The Court has allowed the action to go forward as a class action suit; and
2) The Court has ruled that some teams that do not have offices or minor league teams in California are still viable defendants based upon their contacts with players and potential players in California.
Additionally, many other major lawsuits by college and professional athletes are trigger closer scrutiny at the way the professional sports business is being run. Heck, we are even paying college athletes now. Surely it won't be long before we pay professional baseball players the minimum wage.
