Ownership Structure between Major and Minor League Baseball

Abstract

Some Major League Baseball (MLB) owners own a portion of their minor league affiliates while other owners have a player development contract or working agreement with all of their minor league affiliates. Even though MLB teams always own the rights to the players and coaches in their minor league system, there are many other aspects of their operations that might be outsourced. This study attempts to explain differences in minor league ownership. It is hypothesized that the relationship between major and minor league teams depends upon the MLB owners’ other businesses and the minor league affiliates’ level or classification. This study analyzes a cross-sectional data set from the Nation League using a probit model. The study finds that media providers that own MLB teams are more likely to own their minor league affiliates and MLB owners are more likely to own lower classified minor league teams.