| By Jason A. Churchill |  | By 11-25-2011 |
The new collective bargaining agreement sucks, plain and simple. I don't care if you believe it's good -- you're wrong. Yes, there are a few positives, including the doing away with the Elias Player Rankings and the manner in which clubs are compensated for losing free agents. And maybe it turns out to be a good thing that the leagues will each contain 15 clubs starting in 2013 and as early as next fall we'll see 10 playoff teams, rather than eight. In the end, however, there is a great net loss, for players, fans and even the owners.
Let's tackle the good and bad of the new CBA.
• Creating balance between the two leagues is a good thing, and having five teams per division levels the playing field in a small manner -- the schedule. It will be as fair as it can be starting in 2013 when the Houston Astros join the American League West. This move could very well help tilt the scales toward equality between the two leagues, too, although with the DH in the junior circuit and not in the NL, the leagues will never be truly equal in terms of overall talent.
• Clubs will be allowed to expand rosters for doubleheaders. It's only by one to 26, but this can only be a good thing in those circumstances and are likely to be utilized with pitching, for the most part.
• No more Elias Sports Bureau Player Rankings or use of Free Agent Types to determine compensation. Furthermore, to qualify for the compensation, the "former" club has to tender an offer of the average salary of the top 125 salaries in baseball for the season that just ended. This winter, that number is just a shade over $12 million. This will eliminate the issues that have hindered free agents the past handful of offseason, particularly relief pitchers.
• Players offered arbitration have seven days to accept or decline. Dragging it out any longer is useless.
• Clubs that sign a compensation-eligible free agent will forfeit their first-round selection in the following draft unless they finished with one of the 10 worst records during the season that just ended. The wording in the release by Major League Baseball -- "unless it selects in the top 10" -- is incorrect, because clubs can pick in the top 10 as a result of failing to sign a draft pick from the top 9 the previous draft and pick 10 or higher, yet still have to forfeit their "natural" selection for signing the free agent.
• Eligibility for salary arbitration has now jumped from the top 17 percent of players with less than three years but more than two years to the top 22 percent. It's worth noting that each player that falls into the top 22 percent -- regardless of ties -- will be eligible. This is a good move for clubs and players. At 17 percent, clubs were holding their top prospects back until late May to late June, in attempt to save that year of service time, often claiming other reasons, of course.
Now, the cutoff date will likely reside in the month of July, which may motivate clubs to simply forget the service time issue and call up a player when he's ready. This will be especially true for contending clubs and those with a prospect that could fill glaring hole at a particular position.
The smaller-market clubs are still likely to hold back their young players, it's just not going to happen as much because the 2010 San Francisco Giants weren't going to wait another 50 days or so to call up Buster Posey.
• Minimum-salary increases, starting right away for 2012. The big leaguers go from $414,000 to $480,000 and then up $10,000 for the following two seasons. Cost of living adjustments -- up or down -- apply for 2015 and 2016. Most importantly, the minor league minimum -- for players on the 40-man roster, something else the MLB release does not state -- rises from $67,300 to $78,250 in 2012 and $79,900 in 2013. That number goes up to $81,500 for 2014 with adjustments for cost of living adjustments the two years after that.
• The draft signing deadline will move from mid-August to mid-July, likely sometimes during the seven-day period following the All-Star Game. This is one of those "it's about time," changes. Getting players signed earlier allows them to get a month more experience and development than before, and experience they may not get at all versus signing at the deadline, when there are only two-to-three weeks left in the minor league season.
• There will be a competitive balance lottery, awarding six draft picks to the 10 smallest markets and lowest revenues. These picks will be slotted in after the completion of the first round. There will be a second lottery for the clubs that did not win the first one, with the awarded six selections taking place after the second round.
These 12 additional picks can be traded, though there are some restrictions, including that they cannot be traded for other picks, even other lottery picks and future selections.
• The luxury tax threshold will not increase until 2014, remaining at $178 million. This is a good thing.
• The tax rate for fourth-time offenders increases to 50 percent. This is a good thing.
• The top prospects in the draft remain subject to drug screening. This is a good thing.
• As a result of the 15-team league balance, interleague play will occur throughout the schedule, rather than during specific periods during the season. While I like the idea of balanced leagues, interleague play is among the more unnecessary aspects in the game. It's run its course, with the possible exception of legitimate rivalries and matchups.
• Adding a playoff team in each league may be a good thing by itself, but considering the one-game playoff scenario being installed as a result, it cancels out much of the good the original Wildcard offers.
If the Boston Red Sox win 95 games in 2012 and finish in second place in the east behind the 98-win Yankees, they will be at a disadvantage not experienced by previous Wildcard qualifiers. Being forced to play a one-game, loser out playoff is asinine and forces clubs, perhaps a club good enough to win the World Series, to either pitch their ace on short rest -- eliminating him from starting the first two games of an ensuing series and giving the division winners who may be all of one or two games better even more of an advantage then home field -- or using less than their best to try and advance.
This eliminates some of the prestige of the wildcard and gives more advantages to clubs that are already enjoying home field advantage. Furthermore, the one-game playoff could be won by the team that lucks into their wildcard clinching the quickest, so they can set up their starting pitcher for the one-gamer.
This leads me into calling for the three-division setup to go away and for the regular-season schedule to begin a week earlier so the wildcard series can be at least three games in duration.
• Clubs will now be limited to a pool of bonus money, which will be based on how many selections they have and where those selections sit. Each draft pick, through round 10, is assigned a value, and the team's pool for that draft will be the sum of those values pertaining to that club's draft selections.
This won't likely hurt the top picks all that much, in fact the numbers assigned to the Top 5 picks aren't that far off what the selections received last summer, with the exception of the fifth pick.
1. Gerrit Cole, Pittsburgh Pirates
Bonus: $8 million + MLB contract
2012 Value: $7.2 milliom
2. Danny Hultzen, Seattle Mariners
Bonus: $6.35 million + MLB contract
2012 Value: $6.2 million
3. Trevor Bauer, Arizona Diamondbacks
Bonus: $3.4 million, plus MLB contract with guaranteed salaries pushing total value over $6 million.
2012 Value: $5.2 million
4. Dylan Bundy, Baltimore Orioles
Bonus: $4 million
2012 Value: $4.2 million
5. Bubba Starling, Kansas City Royals
Bonus: $7.5 million
2012 Value: $3.5 million
The value assigned for pick No. 8 is identical to the bonus the Cleveland Indians gave shortstop Francisco Lindor, and the value for Nos. 9 and 10 for 2012 are larger than the bonuses given to the selections from this past draft.
However, this may not have been the case if the absolute best talent was selected in each spot. That may not have been the case with the final two picks of the Top 10.
For those that asked on Twitter, the answer is no. The question was: With the pool being limited to the first 10 rounds, won't clubs just wait until round 11 and then grossly overpay prospects that fell due to signability?
Clubs are limited to $100,000 bonuses in rounds 11-50. If they go over that, the entire bonus for those selections counts against their pool for the first 10 rounds.
Club can go over the assigned value for any pick, they simply can't go over their total pool. What this will force is clubs spending big money up high and going for cheaper picks later in the draft.
• Clubs no longer have the ability to sign two-sport starts in the same manner. Sure, they can still spread out the bonus over five years, but the entire total bonus still counts against the current year's pool of allotted monies.
• The penalties for exceeding the pool caps for draft picks are insane. If the offenders exceed the cap by up to five percent, they will pay 75 percent of that overage total as penalty. Those that exceed the cap by more than five and as much as 10 percent will pay the 75 percent tax on the overage, plus the loss of a first-round draft pick. Ten to fifteen percent overages call for a 100 percent tax and loss of first and second round picks. More than 15 percent overage calls for a 100 percent tax and a loss of first-round picks in the next two drafts.
The one good part of this process is that the tax money AND forfeited selections go into a lottery where the clubs with the worst winning percentages have the best chance of winning the extra selections, but overall it's a ridiculous addition.
The clubs that have been spending on the draft the last several years are exactly those that the league should want -- Kansas City, Baltimore, Pittsburgh, Tampa Bay and Toronto, for example -- teams that aren't able to spend $100 million or more on payroll in order to compete on the field.
The clubs that aren't winning always have a chance to turn that around because they get the top draft selections and if they are willing to spend fractions of what free agents cost, they also get the best players available in that draft. Those teams have spoken loud and clear that they ARE willing to spend that money.
Under the new rules, smaller-market, lower-revenue and struggling clubs will need a lot longer to rebuild and become contenders, rendering them irrelevant for even longer. That is absolutely and unequivocally not good for baseball and can only diminish the prominence of the draft.
These limits could also push athletes toward other sports and college, rather than getting them into baseball when they can be developed properly, rather than not getting them into baseball at all, or risking a college coach's preference of winning over development and long-term health.
• There are now similar limitations on the spending on international talents. As much as I generally believe IFAs are far, far too risky to throw millions of dollars at the way some clubs have of late, putting a cap on that spending only sends the message to athletes that another sport, soccer in the instance of most Latin American prospects, may be the better path.
Again, the very top prospects will still get plenty of money that will convince them to sign, but if a non-elite prospect at 13 or 14 years of age feels he may be one of those hurt by the limits, he could give up baseball. One executive that works the Dominican academies told me Tuesday that he was afraid this might happen and already knows of some kids that have told their baseball teams and trainers that they will skip the next camp to play in a soccer tournament.
The best talents will still come to the states to play baseball, but remember, several of the game's better foreign imports began their pro careers as anything but a top prospect, often receiving low six-figure bonuses. Those are the players that may choose to skip out on baseball before they are even on the radar of baseball scouts.
The signing pools for the next signing period will be equal among all 30 clubs, but after that the pools will be based on winning percentage the prior season. That procedure goes into effect July 2, 2013. The silver lining here is that if you're going to have a cap and pool -- and a tax and penalties for those that exceed their pool -- at least the pools will be doled out properly in order to give advantages to the clubs that have been struggling.
The taxes and penalties are as follows:
Those that exceed the pool limits by up to five percent will pay a 75 percent tax on the overage amount. This isn't likely to deter all clubs from going over and teams may very well base their decisions on what the following year's class looks like.
Those that exceed the limits by more than five and as much as 10 percent will pay a 75 percent tax on the overage amount and lose the right to pay a bonus of more than $500,000 the following signing period. The signing periods, by the way, are defined as July 2 through June 15 the following year.
Those that spend more than 10 percent and as much as 15 percent more than their bonus pool will pay a 100 percent tax and lose to the right to hand out a bonus of more than $500,000 the following signing period.
For those that spend more than 15 percent above their pool will pay a 100 percent tax on the overages and be limited to $250,000 bonuses the following signing period.
The penalties will increase starting July 2, 2014, unless an international draft is agreed upon by then. I'd bet a draft is on its way, an idea which I, for one, despise.
• Teams are no longer allowed to trade for a free agent to-be and receive compensation if they make a qualifying offer and that player signs elsewhere. As Keith Law called it, this is the "screw you, Alex Anthopoulos" rule, as the Blue Jays took advantage of the absence of such a clause in years past. Smart, but no longer allowed. If clubs aren't allowed to trade their assets -- and a pending free agent that comes with compensation was an asset -- it's just more restrictions laid upon clubs trying to rebuild.
The biggest problem in the game's financial structure was not addressed. There are all of these taxes and penalties that hurt the small market clubs and do nothing to deter the haves from willingly paying the max tax of 100 percent and sacrificing a future first round draft pick or two. Those clubs draft 25-30 every year anyway, and have the funds to write a check for the overage penalties.
If the league wants to add taxes, caps and penalties -- for the record, I don't like any of the taxes, the game was fine without them -- then why not a tax, cap and penalty on free agent spending? I'll tell you why the LEAGUE would never want that, let alone the MLBPA, who would never do anything that lowers the average annual salary of its union. Because that would hurt the haves, the Yankees, Red Sox and Phillies, and force them to actually practice restraint and be a smart organization that shares the same rules and regulations as everyone else.
The league doesn't want a level playing field, they just want it to be level enough to keep all 30 cities interested for as long as possible, in order to maximize its revenue. In the end, they want the Yankees, Phillies, Red Sox, Angels, Rangers, Tigers and Dodgers to win every year and battle it out for the series.
Maybe that's better for the league, but it's sure as hell not better for the game. There will never be a fix for that, however, not under Bud Selig, not under any commissioner.
The new CBA helps the owners significantly more than he players, and it's not even close. If I were a union rep, I'd be sorely disappointed, but then again the draft and international free agent adjustments don't impact the union at all. Those players are not members of the players association, and the current members were aided by a few of the rule changes.
Overall, it's terrific that there will be labor peace for another five seasons and I reiterate that it's quite interesting that the one major sports without a salary cap has experience such peace for the last 17 years -- a number that will reach at least 22 -- while the other leagues have puts their fans through hell, particularly the NHL and NBA.
While many, including myself, do not like much of what the new CBA brings, at least there will be baseball starting in the spring -- not halfway through the summer on an 80-game schedule, or not at all.
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Comments
The following 14 comment(s) for this article are shown below:
| 1. By: masonb on 11-25-2011 14:19:14 Jason, this is by far one of the best articles I've seen on the site. Thanks for laying it out there. It also helps--I would think-- to settle some of the dispute your readers have had over the whether these changes are positive or negative. |
| 2. By: Jason A. Churchill on 11-25-2011 14:50:03 Thanks, masonb. I think most fans are just happy there won't be a stoppage, and I can certainly understand that. |
| 3. By: k0o56 on 11-25-2011 15:26:14 I totally agree with you, Jason. There are aspects of the new deal that I like and some that I don't, but the main thing is that it's done and there WILL be baseball. And that's what it boils down to the most. Thanks for the great info and analysis! |
| 4. By: masonb on 11-25-2011 16:09:55 I have mixed feelings, because yes, there will be baseball, but I think it makes things in the long run pretty boring. Especially if Seattle isn't willing to pony up and bring the free agents on. Jason, seeing as how this CBA really effects amateur acquisition, do you see the front office perhaps altering their strategy for signing free agents in the short term? I know it all really boils down to what ownership is willing to pay for, but it just seems now that there is increased reason for maybe going after a guy like Fielder or especially Darvish. |
| 5. By: nighthawk180 on 11-25-2011 17:24:44 Thx Jason, This is a great rundown of the the new CBA contract. I completely agree with you. There are some good things but a lot of negatives. The trading of the low market teams is an interesting tidbit in the contract. Do you think this could be a precursor for trading picks in the future? |
| 6. By: Jason A. Churchill on 11-25-2011 17:44:04 Thanks, K0o56! masonb, Two things -- the M's are willing to pony up, as you put it, for free agents. But they won't make idiotic deals for aging players or handcuff themselves. The player, the right player, has to be willing to take the money. The strategy has never been to not sign free agents. The new regime under Zduriencik has simply shown restraint, but you can't rebuild an organization through free agency. They are the point now where a free agent or two -- even a big, gigantic one, no pun intended -- makes some sense. The Mariners have not been cheap; it's been a long time since that was true, more than 10 years. They spend unwisely under the previous regime, but the owners did spend. And no, not Darvish and especially not "especially Darvish." There's no team need for Darvish, and the risk there is quite large, anyway. He'll cost a ton in total monies and the M's need hitters, hitters, hitters. Darvish makes ZERO sense, unless they plan on a payroll crawling over $150 million -- and that isn't happening in 2012 or 2013. If the Mariners overpay, so to speak, for a big-name free agent this winter, it'll be Fielder. nighthawk180, I do think at some point the two sides may agree on trading draft picks, but it opens up a huge clerical problem, so they will need to create restrictions. I have always thought something similar to the NBA's might work. NBA clubs cannot trade first round picks from two successive seasons. That general idea can probably work in MLB, and some picks should probably not be trade eligible, such as compensation picks and/or picks after a certain round. The current CBA runs through the 2016 season, but we could see changes toward trading draft picks before then. |
| 7. By: jgstecker on 11-25-2011 19:31:07 I'm not sure that teams like the Pirates are worse off as far as the draft is concerned. Yes, they can't go after a Josh Bell at pick 61 anymore, but they also don't have to. This year, Pittsburgh got Cole, Bell and Dickerson in the top 100 for a total of about $13.5 million. Forget 2012's draft - its a mess. But look at 2013. Assuming the Pirates are still the Pirates, they're looking at a top 10 pick, a lottery pick between 25-30 overall, a 2nd rounder at 36-45, a third rounder at 66-75, and a 4th rounder at 96-105. That's 3 top 40ish picks and 5 in the top 100 or so. If 2011's class was drafted in 2013, they'd essential still get Cole and Dickerson and have to swap Bell for signable players at 25 overall, 36 overall, and 66 overall. I'd take that. |
| 8. By: Jason A. Churchill on 11-25-2011 22:01:12 It is still a hindrance to the smaller-market clubs, jg. Having Bell is better than NOT having Bell. So instead of Bell's profile -- a potential star left fielder -- they get, say, an average player in that spot, maybe worse. Granted, bell could fail, but there's a reason he was a first-round talent. That's the draft. Eliminating the player from Pittsburgh's options is stupidity. And yes, Pitt may not have that option whereas the Yankees and others might, How? Because they CAN spend in free agency -- and do -- and don't use the draft the same way the small-market clubs have to. So in such a scenario, the Yankees can punt on most the rest of their draft and just spent a major portion of it on one player, or they can simply say, screw it, we'll pay him and pay the penalties, even future first round picks. The big market teams can afford to do that. The Pirates cannot. Could you imagine the potential loss for the Pirates if they did that under these new rules, say, in 2010 to get Taillon, et al, and had to forfeit the 2011 first rounder? They'll have to choose between spending extra one year or having their pick the next. That's total B.S. and isn't why the draft is here in the first place. There's a reason the draft orders goes by record, and has for 45 years. It's to help the teams that have been struggling the most. And the new rules absolutely do hurt those teams, unless they happen to be a team like Seattle that has had a lot of early picks, and also can spend some money. |
| 9. By: nighthawk180 on 11-26-2011 00:45:24 Jason, A little of topic here but I read on MLB trade rumors that the reds are looking for pitching. They are willing to trade Alonso to attain the pitching. Do you think the mariners could match up? What kind of package? I dont think just league would get it done but was wondering what your thoughts on this idea. Thx Nighthawk180 |
| 10. By: Slack on 11-26-2011 10:10:45 I was waiting for an article about the CBA like this. Way to deliver, Jason! The CBA has my blood boiling! It really bothers me because the talent flowing into baseball is going to diminish and come in slower. I'm angry to see that its the Yankees, Red Sox and Phillies who benefit the most. I hate seeing those teams in the mix every year. I've been waiting for smaller market teams to take them down for a long time. The Rays came so close in 2008. I've been waiting for Toronto to be king of the hill in the AL East but thats less likely now. |
| 11. By: csiems on 11-27-2011 02:10:37 Jason, Will there be expanded pool for teams that win lottery and expansion picks? Or will teams have to use the same amount to sign even more players? |
| 12. By: Edman on 11-27-2011 04:14:11 I don't think it's the Yankees, Red Sox, Phillies, etc. who benefit the most. It's the MLBPA that benefits the most. They get to hold on to those large contracts, while reducing the pot for the International Free Agents with the belief that it leaves more for them. I don't see that the new CBA benefits any Major League team, but it does hurt some less than others. I don't remember a single CBA that was ever received with full acceptance from the pro-player or pro-owner lobby. It will be different, and is a great deal more creative than in the past. But, there will never be a contract that is fair to the players, the owners and the fans. The fans are at the bottom of the pile, with little to say that can be heard. Until they stop going to games until MLB cleans up the system, nothing will happen. And, I don't see that happening in my lifetime. |
| 13. By: jgstecker on 11-27-2011 08:23:33 Csiems- Each team's pool will grow based on the actual picks they receive, including compensation and lottery picks. Reports that you may have read about a pool maximum (I've heard $11-$12 million a lot) are bogus. There's no way to predict the maximum number of picks a team could end up with Each team's pool will consist of the cumulative slot total for all of the teams picks in the first ten rounds. It will be interesting to see how many teams will reach for over slot guys in the late first/second round and then go super-cheap in the subsequent rounds. Or simply not sign those later picks to avoid the penalty. |
| 14. By: DMac33 on 11-29-2011 15:33:16 There's always pluses and minuses to everything ... Yes, you could have a situation where the two best teams in a league are in the same division and now one of those teams are subject to a 1-game playoff and at a potential disadvantage in the playoffs if they earn the Wild Card slot. But to me, all that does is restore the importance of winning your division. If you don't want to be in the 1-game playoff, then play hard for 162 games. I don't find it overly amusing to know in July each year that say the Yankees and Red Sox are going to be in the playoffs. What I would find amusing is going down to the last week of the season where they have a 3 game series where at stake for those clubs is a division title and the avoidance of a 1-game and you go home scenario. |
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