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Originally Posted by mlyons
The more players you have, however, the more likely someone's going to get a talent boost. Quite a few times I've had guys I've kept on my A or AA roster as "backups" go through a talent boost and end up as productive major leaguers. If I kept my minor league rosters down to just the "sure things", those guys would have been cut long before they became productive. As long as your top prospects are getting 400-500 ABs (or 175-225 IP) per season and not being blocked from moving up through your system, there's no harm in keeping 20-25 players at each level.
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I always have to scratch my head when I see GMs releasing young prospects when they have few prospects in their system. I imagine they're just neat freaks or something and like to have as little clutter as possible even if it hurts them.