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Green behind decline of blacks in baseball

The amateur draft and baseball economics are the reasons why baseball has only half the black players of a decade ago.

A weekly column by Chris Isidore, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- You may have heard a lot of folks worrying about the steep drop in the number of black baseball players as the sport celebrates Jackie Robinson, who broke the color barrier 60 years ago this weekend.

But what you probably haven't heard are the economic reasons for that decline.

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As baseball honors Jackie Robinson, it has seen the percentage of black players fall to half the level of 10 years ago.
As baseball honors Jackie Robinson, it has seen the percentage of black players fall to half the level of 10 years ago.
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The percentage of black major league players is now 8.4 percent, not counting those who are foreign born, according to the Institute for Diversity and Ethics and Sport. That's a touch less than half the level it was at only 10 years ago. Some teams, such as the Atlanta Braves and Houston Astros, have no black players on their rosters.

A lot of things have been blamed for the decline, including baseball trailing basketball and football in popularity, especially among inner-city youth, to the lack of blacks in the sport's front offices.

But the real reasons behind the decline have more to do with money - the economics of scouting and player development, as well as socioeconomic issues in the U.S.

First and foremost, it is most closely tied to the peculiarities of baseball's amateur draft.

The draft has - unintentionally - created a greater supply of foreign-born players and white American-born players.

"Baseball is getting beat up on this. But it's really supply and demand that dictates a lot of this," said Maury Brown, the creator and editor of BizofBaseball.com.

And these are two trends that are not likely to change, even as Major League Baseball and the players union work together to build baseball fields and start youth baseball programs in inner city neighborhoods, and the league pushes for more minority hiring in the front office.

Baseball teams select U.S. amateur players through a draft process, based on the reverse order of their finish. The draft is a way to level the playing field so deep pocketed teams couldn't corner all the young talent. It also gives the U.S. players limited bargaining leverage when negotiating a signing bonus and contract with the team that drafted them.

But the draft does not apply to players from outside the U.S., partly because there were only a handful of foreign-born players when the draft started in 1965.

This fact has caused teams to look more closely at overseas markets, particularly Caribbean countries, since scouting skill, as opposed to the luck of the draw, helps them discover and sign players.

"The international market is more economically efficient," said Vince Gennaro, a consultant to numerous major league teams and the author of "Diamonds and Dollars," a book about the economics of baseball. "This is the place where the high revenue teams can leverage their economic advantage."

Because of that, every team has opened an academy in the Dominican Republic, providing a combination of schooling and baseball instruction to the promising young players. Another 10 teams have academies in Venezuela.

"Clubs do leverage their dollars much better if they develop a kid in a country not subject to the draft," said Jimmie Lee Solomon, MLB executive vice president for baseball operations, who is black. "Those decisions are purely business decisions, very pragmatic business decisions."

In addition, the relative poverty of some of the countries, such as the Dominican Republic, made it relatively cheap to sign many of the players, although those signing bonuses are rising in recent years. So the percentage of foreign born players has seen a steady climb, to 29 percent this year, nearly double their percentage in 1995.

In America, though, the draft and the growth of salaries in baseball is driving teams to look more and more towards drafting and signing college players, rather than high school players, who are much more of a long shot to develop into a major league player.

The players who are drafted out of high school have only two options -- accept the top salary and signing bonus offered by the team, or go to college and hope they will be picked in a higher draft position a year or two down the road. With baseball salaries rising steadily, more see an advantage to try the college path.

In 2005, the most recent year for which figures were available, only 35 percent of players drafted were high school players, down from 56 percent when the draft started. And only about a quarter of drafted high school players now sign with a team, compared to about 70 percent of college players who are drafted.

In 1965, about half of drafted high school players signed, compared to 55 percent of college players who were drafted.

But baseball is not considered a revenue sport in college, as football and basketball are. Full scholarships are very rare for baseball. More often two or three players will share a scholarship.

It takes a certain amount of economic resources for a baseball player to go to college and whites, on average, have higher incomes than blacks in the U.S. So for a black athlete that needs financial assistance to attend college, it makes more sense to try for a football or basketball scholarship. This is a big reason why college baseball teams have even a lower percentage of black players than does the major league, said Solomon.

"A Division 1 football program can give out 85 scholarships, and baseball teams only 11.7," said Solomon. "If you're an African American kid and you need help to go to school, do the math."

Major League Baseball is making a push to try to get more black athletes interested in playing the game. May 1 will be the first anniversary of the opening of the Urban Youth Academy in Compton, Calif., near Los Angeles.

Unlike the Latin American academies, is not a full-service school, but it provides clinics and training to promising players. And MLB is looking at possibly opening up similar schools near Miami, and in Washington and Philadelphia.

But even Solomon admits there could be further declines before baseball's efforts result in any uptick of black players.

"You're not going to have a very quick reversal. It took 30 years to get here," he said.

Baseball is the new football

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.