When the 2021 baseball season arrives—if it arrives—the minor leagues will look a bit different than they did two years ago. And more than a dozen cities might look extra foolish for spending major amounts of public money on minor league ballparks.
There was no minor league baseball in 2020 due to the COVID-19 pandemic, but there was still plenty of drama surrounding Major League Baseball's (MLB) farm system. After months of speculation and occasional news leaks, MLB finalized its plans earlier this month to reduce the number of affiliated minor league clubs that are used by major league teams to develop talent. Previously, each of the 30 MLB clubs had five or six minor league affiliates—starting next year, each will have just four.
It's a move that's meant to save the big league clubs money, as it means paying fewer minor league ballplayers and financially supporting fewer clubs. Even though minor league teams are owned and operated mostly independently of their MLB parent organizations, the much richer big-league clubs provide a steady stream of revenue to their farm teams. Losing its connection to an MLB franchise can be an existential threat to a minor league club, which stands to lose both the direct financial benefits of being affiliated and the indirect benefits of attracting fans who want to see future big-leaguers or rehabbing MLB stars.
That's the gloomy future to which about 40 former minor league teams have been doomed. Given the uncertainties created by COVID-19—will fans be allowed into the stadiums this summer?—it seems more than likely that some of those franchises will simply cease to exist.
That's a shame, because taxpayers have funneled nearly $250 million into stadiums for teams that are now on MLB's chopping block. That's according to Neil deMause, a stadium subsidy critic and co-author of Field of Schemes (as well as a blog of the same name), who crunched the numbers after the official affiliation announcements were made earlier this month.
"A whole lot of minor-league baseball fans are about to lose their teams, and a whole lot of cities are about to see their investments in stadiums go up in smoke," writes deMause.
One of the biggest losers is New York City, which spent $71 million of public money to help build a waterfront minor league ballpark in Staten Island less than 20 years ago. The Staten Island Yankees, a former affiliate to the cross-town team of the same name, didn't survive this year's minor league reaping. The team has folded and plans to sue MLB, according to a statement.
The story is much the same elsewhere. Taxpayers in Kane County, Illinois, kicked in $19 million to build and later upgrade a minor league ballpark, but the Kane County Cougars got booted to the curb by MLB and are now exploring options including independent leagues. In Charleston, West Virginia, taxpayers put up $25 million in 2005 to build a ballpark for the West Virginia Power. Just 15 years later, MLB is turning out the lights.
Empty minor league ballparks that stand as monuments to failed economic development schemes aren't new, of course. In New Jersey, for example, taxpayers paid to build—and then demolish—stadiums in Camden and Newark within the past couple of decades when those teams abruptly ran out of money.
Unfortunately, this year's reduction in the number of MLB-affiliated minor league teams is unlikely to stop local officials from throwing money at baseball teams. In fact, MLB may be hoping that it does the exact opposite—by reducing the number of affiliated minor league teams in the market, those remaining teams could have greater leverage to extract public subsidies by threatening to leave for new homes.
As deMause notes, one of the reasons MLB gave for seeking to cut teams was to improve minor league "stadium facilities," and some owners of teams headed for the scrap heap have said they were more or less told that subpar facilities doomed them. The message to the remaining minor league owners is clear: Lobby your local governments to pay for upgrades or face the consequences.
But those investments are foolish even when they don't result in abandoned stadiums. Study after study after study has debunked the idea that publicly funded stadiums are financially beneficial to anyone other than the team owners, who get free infrastructure for their business. And the costs keep rising. Worcester, Massachusetts, recently spent $70 million in public funds on a new ballpark, a record for a minor league facility—one that was completed just in time for fans to be banned from attending sporting events due to the pandemic.
Even in cities that aren't losing their minor league teams, the farm system reshuffling is making civic leaders look foolish for spending big bucks on stadiums.
Consider what's happened in Wichita, Kansas. For years, the city had been home to a Double-A minor league team—that's two steps below the major leagues—until it relocated to Arkansas in 2007. Even though the city already possessed a perfectly fine minor league ballpark, local officials decided to spend $75 million building a new stadium in the hopes of luring a Triple-A team—the highest minor league level—from somewhere else. What more could a midsized city in Kansas want, and all it cost residents was an extra 2 percent sales tax.
It seemed to work. The Triple-A affiliate of the Minnesota Twins announced in 2019 that it would relocate from New Orleans to Wichita. The new ballpark was set to open earlier this year.
Then COVID-19 struck, and the season was canceled. Now, as part of the overall MLB reshuffling, the Twins have designated a different team, located in nearby St. Paul, their Triple-A affiliate. They'll still maintain the new team in Wichita, but it will be demoted.
Next season, Wichita residents will be watching Double-A ball once again. They'll still be paying those higher taxes.