MLB has guaranteed Fresno a Minor League Baseball licensee through 2030 and will push its member teams to consider it for Triple-A as part of an agreement for the Fresno Grizzlies to move from the Pacific Coast League to the Low-A California League in 2021.
The guarantee, which came in a letter from MLB Deputy Commissioner Dan Halem to the Fresno city attorney, says that MLB considers Chukchansi Park to be in compliance with new MiLB facility standards as well. Fresno will remain in the California League or a successor league through 2030 if a) the California League continues to exist and b) the ballpark continues to meet MiLB facilities standards. After that, MLB will keep Fresno in a player development league, though not necessarily the Cal League, through 2036.
The MLB guarantee, which appears to be the first time that Major League Baseball has directly guaranteed a municipality an MiLB team, led to Fresno dropping threats of legal action against MLB for the classification shift and the Grizzlies ownership to agree to it, clearing the way for a determination of the 120 teams invited to be part of the new MiLB. Both Fresno and the team had threatened legal action potentially based on the diminished value of the team due to MLB’s actions. It also represents a firm guarantee that does not appear to be offered to other MiLB teams as MLB continues its takeover of Minor League Baseball.
As a result of the MLB guarantee, the Fresno City Council will reduce rent at Chukchansi Park from $500,000 to $100,000 annually. In addition, the city will pay the first $300,000 of utility bills; the Grizzlies were previously responsible for the entire amount. However, the Grizzlies and the city will enter into a revenue-sharing agreement, with the city receiving 12.5 percent of the first $500,000 in revenue, jumping to 20 percent should profits exceed $500,000. And the pair will also share naming-rights revenues: the Grizzlies will receive the first $650,000, and the city everything above that. The current naming-rights deal expires at the end of the 2021 season.
Here is the letter:
(Alternately, you can find the full letter here; it can also be found in the Fresno city archives. Thanks to David Taub from gvwire.com for pointing us to the letter and the role it played in the Fresno decision.)
This is a big week in the Minor League Baseball takeover saga: teams have been presented with a 54-page summary of the new Professional Development License (PDL) as well as a form prohibiting teams from suing MLB over the reorganization. MiLB teams were given a deadline of Friday to sign the release and move on to the next step in the process: a formal presentation of the full PDL, which is not finished. (Indeed, negotiators are still discussing provisions of the PDL. The latest bombshell: MLB has added provisions for both buyers and sellers to pay MLB in the case of a licensee sale. The buyer would pay a flat $500,000 fee to MLB; the seller would pay 5 percent of the sale price to MLB.) Signing the waiver does not commit the MiLB owner to being part of the new MiLB, but rather moving the process to the next step, which includes a review of the full PDL followed by a commitment to the agreement. MLB-owned MiLB teams have reportedly already signed the liability waivers; most, if not all, other MiLB teams are expected to follow suit. But there is unrest among MiLB owners and team management about the impending PDL, and there’s been plenty of venting via email regarding the potential PDL and whether MiLB teams should unite and refuse to sign it, which would trigger a standoff of monumental proportions. Given than some MLB types freely admit that this MiLB reorg is not among their priorities—how to manage the 2021 MLB season and how to approach the next labor agreement with players are clearly higher priorities—it remains to be seen how future MiLB actions will be considered.
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