Minor league players no longer have to pay for lodging and from 2021 they earn between $110 and $250 more a week. But their annual income is still below the federal minimum of $7.25 an hour, and only 10% will make it. Big leaguesaccording to a study by More Than Baseball, an NGO that represents and seeks a minimum income of US$35,000 a year.
In this context, Big League Advance (BLA), a company that lends money to prospects in exchange for charging fixed percentages for life of their income in the MLBhas seen the number of applicants skyrocket and claims to bring its portfolio closer to half a thousand players.
For this reason, the company headed by Michael Schwimer is seeking to raise an investment of US$250 million in a third round of expansion, the former pitcher told Sportico.com.
It is the same company that made its biggest hit when Fernando Tatis Jr. signed the US$350 million, 13-year extension with the Padres in 2021. In 2017, the shortstop on the injured list today took out a loan of less than would have to pay him up to $26 million from that deal, according to The Wall Street Journal.
“We have over 400 players right now and it’s getting more popular; players are saying ‘yes’ more and more,” Schwimer said. The charge goes between 1 and 10%.
BLA raised $26 million in its first fund and $130 million in its second, and would have little cash left over from that total. Schwimer said the group has invested in 400-450 players, of which about 100 made it to the MLB and about the same amount came entirely out of baseball.
Schwimer said Big League Advance already has about $100 million committed to the new fund. He declined to provide the names of those investors.
Big League Advance’s business model raises serious questions in the industry. The Players Union of the MLB has called such third-party deals “exploitative,” and has expressed fears about conflicts of interest that could arise from these deals.
In 2018, Big League Advance was sued by Cleveland Guardians Dominican prospect Francisco Mejia, who claimed he was taken advantage of in a deal that gave him $360,000 in exchange for 10% of his earnings from the league. MLB. Mejía later withdrew the lawsuit and apologized.
