The Farm System Goes Legit (1932)

Part 8 of our series on Important Moments in Team Building.  See introduction, and up-to-date list.


images (3)While Branch Rickey pioneered a rudimentary farm system for the St. Louis Cardinals during the 1920s, other teams remained skeptical that such a scheme was worth its huge cost. Was it really more productive and cost effective than buying fully-seasoned players from independent minor league clubs? One of the fundamental concerns for the naysayers was that these proto-farm systems never really got around the 40 man roster problem—at least legally. The 1921 major league agreement set the major league player control limit at 40 (an increase from 35), and limited teams to 25 active players during the bulk of the season—the limits still in effect today. With one major difference: If a franchise had a working agreement with a minor league team or owned it outright such that it asserted control over those players, they all counted against the 40 man roster, leaving no room for anyone else. In effect, a big league club couldn’t even control one farm team’s worth of players.

During the 1920s the independent minor leagues were relatively profitable and liked the existing structure. Their fans cared about the pennant races, and the owners could make extra money selling their stars to the majors. But like Rickey, many big-league team owners began to chafe and the uncertainty and cost of having to buy players from the minors and being limited to a reserve list of only 15 players beyond their 25-man roster. Today of course teams still have a 40 man roster yet also control all the rest of the players in their minor league system.

To get around this limitation the major leagues resorted to all sorts of subterfuges with friendly minor league owners. The most common dodge involved sending a player to a minor league team, technically surrendering control to that minor league team, but with a handshake agreement that you could buy him back when you wanted him. Another tactic—a favorite of Branch Rickey’s–was to have an option on any one player on a team; that is, not identify a specific player and try to have that count as just optioned roster spot. Though technically not legitimate, it was common practice and often not challenged.

With the advent of the Great Depression, the minor league owners were struggling to stay afloat and willing to surrender some of their independence for a cash infusion from major league owners. This led to a far-reaching discussion at the 1931 winter meetings, where the major leaguer owners debated liberating the roster rules while providing financial support to minor league franchises.

images (4)Yankee owner Jacob Ruppert bluntly asked Commissioner Landis, who was in charge of enforcing the player control rules: “I would like to ask a question: in the event of a club lending a man, or giving a club at least $3,000, and he gives you an option on his ballclub, or an option on one or two players, are those players counted in the player list?” “Yes, sir,” answered Landis. In other words, Landis was confirming that any player on a minor league team—even one that a club controlled or invested in—would occupy a roster spot if the major league team had his option.

Rickey offered his secret for getting around the issue: “I have for several years of taking an option on the club of one man, say $3,000; I have the option on this club to take one man at a certain time, for $3,000. I don’t believe there has ever been a time that any man who has taken an option on a club in those circumstances have ever lost the second man to anybody else, if he wanted the second man. I have never known of it in my experience.” This workaround was not approved by Landis, but apparently the Commissioner did not recognize the extent of some of these tactics and often failed to crackdown on these gentleman’s agreements (Landis had very little staff for investigating the many under-the-table deals).

Unlike Rickey, Ruppert accepted Landis’s answer: “Two years ago at Chattanooga, when the Nebraska State League wanted different clubs financed, at that time you remember we were going to finance a club, I believe they had eleven players on that club; and we were then to select from that club one, or as many players as we saw fit. And at that time, Judge, you ruled those eleven men on that club would count in our player limit.” After some additional discussion it became clear that many owners did not actually understand all the roster and option rules.

The result of all of this talk was that the owners voted that to allow teams to invest in teams in Class B, C, or D leagues, and that those players would not count against the 40 man roster. Under this new rule, a major league team could own a minor league team, have full rights to all its players, and none would count against the major league limits until the major league team actually designated a player for call-up. This rule was eventually implemented for the higher classification minor leagues as well.

It was this rule that really freed up major league teams to create more expansive farm systems in the years ahead. The top teams over the next several years would be those, like the Yankees, that aggressively gobbled up minor league teams or created working relationships to build top-notch farm systems. While there were only 18 MLB-owned or affiliated minor league teams in 1928, a decade later the number was approaching 200, over 10 per big league club.


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