One development during the 1930s may have raised Major League expenses: the burgeoning farm system. Major League owners began buying or subsidizing Minor League teams in the 1920s. The owners had previously purchased players from Minor League teams, sometimes in open bidding and sometimes through fixed prices via a draft of Minor League talent.
Owners could negotiate a working agreement with a Minor League team whereby a Major League team would get first dibs on promising Minor League players on that particular Minor League team. The Minor League team might get a subsidy or other support in return. Some Major League owners disliked the potential of a Minor League team owner reneging on an agreement and sending a talented youngster to another team. These owners might choose to purchase a Minor League team and the accompanying players. The Major League owner would then have greater control over the players but would also be liable for the expenses of the Minor League team. In either case, both Major League and Minor League team owners were subject to the Major-Minor agreement pertaining to players. The key question was whether the expense of sustaining Minor League teams was less than that of having to engage in open bidding for new talent. Even if the expense was greater, the Major League owners might still consider the endeavor worthwhile if it meant greater security over the flow of talent from the Minor to the Major Leagues.
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Publication information: Book title: Wins, Losses, and Empty Seats: How Baseball Outlasted the Great Depression. Contributors: David George Surdam - Author. Publisher: University of Nebraska Press. Place of publication: Lincoln, NE. Publication year: 2011. Page number: 95.
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