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Don't be surprised if MLB clubs, watching their MiLB affiliates' precarious financial situations, wait for them to reach the brink or hit bankrupty, then buy those affiliates themselves for pennies on the dollar. Consider the business angle... (1/6)
MiLB teams are hemorrhaging cash, facing a probable lost 2020 and an uncertain long term future with the virus *and* likely contraction looming. Why throw money at a black hole? Instead, wait until their value is dramatically suppressed. (2/6)
Now you buy a previously $30M asset for a few million. Use bankruptcy or debt leverage to reduce base costs to near zero. Lose just a tiny amount in 2020, then ramp up operations in 2021. Gain asset value over a few years. Then the operational gain begins... (3/6)
Profit margins will be small, but that's still free cash flow to the organization. The parent club gains control, to rebuild affiliates in their own vision. No more MLB/MiLB strife in the relationship. Set the table for player conditions as they like. (4/6)
And as some affiliates collapse, the value of all clubs decline. You can now buy even more at reduced prices, even the surviving ones. An MLB club could control all their affiliates in time. In 5 years, we could see a large % of affiliates... (5/6)
...owned by their parent clubs. I'm not saying this is necessarily good for minor league baseball, mind you. In fact it will cause job losses. Just that the biz opportunity here for MLB teams is clear as day, and I'd bet many are considering this very path right now. (6/6)
