The new CBA: THT reacts

Major League Baseball announced its new Collective Bargaining Agreement yesterday. Although we’re all still digesting the details, I asked some THT writers and friends for their reactions. Here they are:

Greg Simons touched on several aspects of the new deal.
HGH blood testing: Is it a reliable test? Union Head Michael Werner said the MLBPA is comfortable with this, though he reserved the right to challenge a positive test.

Also, ESPN’s Buster Olney said blood samples will be taken in spring training to see how the drawing of blood affects players’ energy levels, and those samples will be destroyed immediately. In light of the leaked 2003 PED survey testing results, if I were a player, I would be quite wary of MLB’s ability to handle this properly.

Additional playoff teams: It certainly makes winning your division more important. How will a 95-win second-place team feel about possibly getting bounced from the playoffs by an 84-win team based on a single game? Also, more teams will stay in the playoff hunt longer, so what will this do to the July 31 trading deadline? It seems there will be significantly fewer deals.

Houston’s move to the American League: Astros fans gain the in-state rivalry with the Rangers but lose games with a couple of long-time (and high-attendance) rivals in the Cubs and Cardinals. Also, there will be more late-night games on TV due to their new West Coast division rivals, which is certain to disappoint Houston fans.

Minimum salary: Goes up to $480,000 next year, $500,000 in 2014. I should have worked harder on my game as a kid.

Luxury tax: It remains $178 million in 2012-2013, rises to $189 million for 2014-16. Yes, this will impact the Yankees, Red Sox and Phillies, but they won’t care.

Free agent compensation: A team has to offer its former players the average of the top 125 salaries, currently about $12 million, to receive draft-pick compensation. This one will require some time to see how it plays out. It will (thankfully) eliminate middle relievers from what had been called “Type A” free agent status.

Brian Cartwright pitched in on this last angle:
Some more details:
1. Starting in 2012, “Type A” and “Type B” free agents and the use of the Elias ranking system will be eliminated.

2. The current system of draft pick compensation will be replaced with the following system:
A. Only players who have been with their clubs for the entire season will be subject to compensation.
B. A free agent will be subject to compensation if his former club offers him a guaranteed one-year contract with a salary equal to the average salary of the 125-highest paid players from the prior season. The offer must be made at the end of the five-day free agent “quiet period,” and the player will have seven days to accept the offer.

I think these are sensible improvements that will serve to reduce the number of compensation picks. Elias rankings and offering arbitration to departing free agents are scrapped in favor of requiring teams to offer a guaranteed one-year contract that would be in excess in excess of $10 million.

No longer will teams be able to make deadline deals for potential free agents then collect the compensation picks, nor will middle relievers be signed at the cost of losing a team’s first-round pick.

Vince Caramela:
I do see some advantages: I like the fact that relievers could no longer qualify for Type A comp status since the guidelines for a minimum yearly salary of $12 million must be offered (and probably won’t be unless the reliever is named Mariano Rivera).

I know the Phillies felt like they just got kicked in the nether regions on this one. (I guess they shouldn’t have pulled that ridiculous contract away from Ryan Madson.) I also feel a bit sorry for teams like the Cardinals (Octavio Dotel), Twins (Matt Capps) and Brewers (Francisco Rodriguez) since I’m sure one of them would have snagged a first-rounder.

Starting in 2013, Interleague games will be played throughout the entire schedule, rather than exclusively in specific inter-league segments. Interleague play on every day of the season will complete the de facto merger of the two leagues in a single “MLB” league, in the style of the NFL, with two 15-team conferences, each with three five-team divisions. The NL and AL designations will only now serve playoff seeding.

Big changes in the draft:

A Hardball Times Update
Goodbye for now.

1. The draft will continue to be conducted in June, but the signing deadline will be moved to a date between July 12 and July 18, depending on the date of the All-Star Game.

2. Drafted players may only sign minor league contracts. Smart move to put the signing deadline at the All-Star break. This will give about a four-week period to negotiate terms. Even if agents hold out until the deadline, there are still six weeks left in the minor league season for signed players to compete.

A. Each club will be assigned an aggregate Signing Bonus Pool prior to each draft. For the purpose of calculating the Signing Bonus Pools, each pick in the first 10 rounds of the draft has been assigned a value. (These values will grow each year with the rate of growth of industry revenue.) A club’s Signing Bonus Pool equals the sum of the values of that club’s selections in the first 10 rounds of the draft.

Players selected after the 10th round do not count against a club’s Signing Bonus Pool if they receive bonuses up to $100,000. Any amounts paid in excess of $100,000 will count against the Pool.

There is a harsh enforcement of slot allocations. The allocations are pooled, so a team has discretion on what to spend on each pick as long as they don’t exceed the cap. Higher drafting teams will have larger caps, as the first team selecting will have its cap as the sum of the allocations for picks 1, 31, 61, 91, 121, 151, 181, 211, 241 & 271, while the last team will be based on picks 30, 60, 90, 120, 150, 180, 210, 240, 270 & 300.

My concern is that the higher-drafting teams will not have a cap size which fits the market for higher-end draft bonuses, and thus will cripple teams such as the Pirates that cannot compete in free agency and thus look to the draft to escape the cellar. However, the purpose of this cap is to reduce bonuses overall, so teams will be looking for ways to game the new system.

Vince on the draft:
I like it. More flexibility. Although I do wonder about the possible increase of undrafted players, especially in the first 10 rounds.

Jim Callis has posted a new blog about the CBA, and pre-draft medical screening will become mandatory for the top 200 prospects. I’m not sure how or by whom these players will be rated, but this should help eliminate any controversies (i.e., Anthony Rendon’s rumored sore shoulder) about a player’s health before he is picked.

Greg on the draft:
Draft spending penalties: Stupid, stupid, stupid. The desire by owners to limit drafted players’ negotiating leverage is understandable, but it could be self-defeating. When spectacular physical talents take their skills to the gridiron or the court instead of a ballfield, baseball loses, and this will push away a few more top-tier players every season.

The players probably think this will mean more money for the major league players, but it will almost certainly only mean more money in the owners’ pockets.

Back to Brian:
There’s something new called a Competitive Balance Lottery

A. For the first time, clubs with the lowest revenues and in the smallest markets will have an opportunity to obtain additional draft picks through a lottery.

B. The ten clubs with the lowest revenues, and the ten clubs in the smallest markets, will be entered into a lottery for the six draft selections immediately following the completion of the first round of the draft. A club’s odds of winning the lottery will be based on its prior season’s winning percentage.

C. The eligible clubs that did not receive one of the six selections after the first round, and all other payee clubs under the Revenue Sharing Plan, will be entered into a second lottery for the six picks immediately following the completion of the second round of the draft. A club’s odds of winning the lottery will be based on its prior season’s winning percentage.

D. Picks awarded in the Competitive Balance Lottery may be assigned by a club, subject to certain restrictions.

In other words, supplemental picks will now be awarded based on small markets, low revenue and poor performance, and these picks will be tradeable.

I do like the idea that the picks in the “competitive balance” draft can be traded to other clubs, assuming I’m reading that right. That could be enticing to some teams, but a lot more thought will have to go into it, since the players taken better be signed according to slot guidelines. I guess scouting departments will be required to really know just how signable certain players are (actually, this could be a disadvantage, since signability will be paramount to a player’s pure ability).

I know the extra Wild Card adds a lot more variance to the postseason, but I’m sure this is welcoming news to the Rays, Blue Jays and others trapped in a heavily competitive division. The expanded playoffs are already a crapshoot, so if we are going to include more teams, we may as well not drag it out for another week.

Looking over the rules of interleague play, it makes sense to have these games played consistently throughout the season. This way there can be no “unbalanced” schedules that can be unfair to teams expected to play the Yankees, Red Sox, and Phillies on a consistent basis.

Caps on international bonuses. The size of the pool will be based on the previous season’s rank by winning percentage. Perhaps they might modify that to more than one year’s winning percentage, or base the amount on the winning percentage itself and not the rank to discourage teams from losing games in order to gain draft cap space. It leaves open the option of placing the international players in the Rule 4 draft, or creating a separate international draft.

Here’s a bold suggestion: If they decide to create an international draft, instead of the traditional method of last picks first, use an auction format, similar to fantasy leagues, where each player’s name is submitted and then bid on until all teams exhaust their assigned bonus pool. If it proves successful, propose it for the Rule 4 draft in the next CBA.

I would also suggestion considering reducing the number of rounds in the draft. A large percent of picks after round 10 never sign. Save the draft for the top prospects, such as ten rounds for domestic (Rule 4) and five for international. Then everyone else is a non-drafted free agent, free to negotiate with any club.

Greg touched on other aspects of the deal:
Super Two arbitration: Percent of players with between two and three years of service time who will be eligible for arbitration goes from 17 to 22 percent. Those additional five percent of players will be extremely pleased, as their salaries will skyrocket a year earlier.

The gaming of service time clocks will stretch even longer into the summer as teams want to avoid paying their future superstars big bucks a year before they have to. The debates on whether to call up future Buster Poseys and Jason Heywards will rage on.

Smokeless tobacco ban: Second-hand smoke is directly harmful to others, smokeless tobacco is not. It’s a disgusting habit, but players have the right to chew/dip if they want to. If parents don’t want little Johnny to do the same, they—not baseball players—should be leading the fight in their households.

Mat Kovach:
Actually I can see a bigger point here.

There are quite a few parents that were part of the negotiations, so it is easy to assume this was put in there by parents. If you are involved in these types of negotiations, you can be a parent and take the fight out of your household.

Both the MLB and MLBPA have interest in healthy players and former players that live long happy lives and die of natural causes. Best to not have people assume it to be true. Put it on paper and have a good handshake about it. Just a little CYA in the CBA.

Beyond that, at this point, the other notable change is the extra wild card games. That is going to be the one folks are talking about in the future.

Bruce Markusen:
A lot of work environments prohibit chewing tobacco, so that’s a debatable and negotiable point. I work at three museums and a hotel, and I cannot use chewing tobacco on the job or on the premises. Players would also have a tough time making the argument that they need chewing tobacco to do their jobs.

There used to be a former player named Bill Tuttle who traveled around to spring training sites with Joe Garagiola to talk about the dangers of chewing tobacco (which Garagiola always referred to as spit tobacco). The players who listened to Tuttle were left in somewhat of a state of shock because Tuttle literally was missing half of his face, the result of a long chewing habit. Sadly, Tuttle lost his battle with cancer back in the 1990s, and without him, the message is a little less hard hitting.

Sorry to be so old-fashioned on this, but this is a subject that gets me going. It is not only a disgusting habit, but it is a habit without redeeming features. It not only severely damages the health of players over the long-term, but it creates filth wherever it is used: dugouts, bullpens, runways, etc. Minor league baseball long ago banned chewing tobacco (though enforcement remains lagging in some places); MLB should have banned it long ago, too.

Commercial over.

And some final words from Fangraphs’ Albert Lyu:

I feel that what I’ve read in initial reactions to the new CBA from the media has been grossly exaggerated. In particular, the cap on international free agents and a tax on overslot signings are not believed to perform the functions Major League Baseball intends for them (i.e. increase competitive balance and narrow the gap between large-revenue teams and small-revenue teams).

A point has been made that small-budget teams like the Rays and the Royals were competitive in rebuilding their farm systems in the past because they spent a lot of money on the draft relative to large-market teams such as the Yankees and the Red Sox. Yet, many of these clubs spent a lot of money on draft picks because they had protected early first-round picks (Pirates, Diamondbacks, Nationals) or they gamed the previous draft pick compensation system in order to attain even more picks (Blue Jays, Rays).

A tax on overslot signings could limit the extent to which some of these teams have benefited from the previous system, but rest assured that smart teams with undersized budgets will still find ways to poke holes in the new system and game the draft to the team’s best interest regardless of the new taxes.

More importantly, we do not know at the moment what the new “bonus recommendations” and “aggregate signing bonus pool” will be in the 2012 MLB Amateur Draft and beyond (a point that was made by Jim Callis at Baseball America). The aggregate pool will depend on the number of picks a team has and where those picks fall in the draft, so this won’t limit a team’s draft spending as much as publicly believed for teams with many draft picks or early first-round picks.

It’s been said, as well, that large-market teams like the Yankees and Red Sox will benefit the most from the new rules. The cap on international free agent spending brings equality to all 30 teams in terms of how much money they can spend on IFAs, yet this affects the Yankees and Red Sox as much as it does the A’s and Pirates, all of which are very active in the IFA market. The cap on IFA spending won’t preclude Latin American amateur players and Pacific Rim imports from coming to the United States; they will just come at less of a cost for MLB teams.

After competitive balance, the next complaint I hear is that the new rules will prevent the Bubba Starlings of the world from choosing baseball over football. First of all, taxing overslot signings gives teams more leverage and will likely result in players drafted in order of talent rather than in order of a combination of talent and signability.

Instead of negotiating for the $15-30 million major league deals that teams can hand out, top prep players with another sport to go to, such as Starling or Archie Bradley, or with high bonus demands, such as Josh Bell or Tyler Beede, will want to get drafted higher rather than using college or another sport as a part of the negotiation process.

In the end, the top players will get their money if they are drafted in the early first round, and it will still likely be in the millions range. Instead of the players having the bargaining power, the teams have the leverage now, and it’s up to the player to decide if he wants to play baseball or not given his slot recommendation. (Again, teams can still sign overslot if they are willing to bear the tax—but that’s not for the players to know until the negotiations begin.)

In the 2012 draft, first-round talents like Bell won’t be second-rounders because of signability, while players like Beede who chose college over a reported $2.5 million offer on the table will be slotted in the right order. Guys like both Bell and Beede, who make it known that they want to go to college, will be taken seriously with these new rules, and where they are picked in the draft will reflect that.

This is not to say that I believe the new CBA is perfect. I’ve read a few opinions on other changes (most suggesting a rollback to previous CBA draft rules), and one of the most intriguing I’ve read (from a commenter named “cubbluie” at FanGraphs) is applying a luxury tax to the entire amount a team spends on “baseball operations” as opposed to draft spending, international signings, and MLB salaries, independently.

This would allow each and any team to construct their 40-man roster and refill their minor league system with flexibility. In the current CBA, if a team like the Rays puts all of its money into draft spending instead of signing free agents, they get taxed for “spending too much” when really they’re allocating their resources to another avenue of acquiring talent.

In general, I think there are wrinkles in the new CBA deal that can be improved given the new amateur draft and international free agency spending rules, yet I would rather take a wait-and-see approach than jump to conclusions on how this is bad for all of baseball or promotes competitive imbalance. What’s more intriguing to me is to see how teams will adjust to these new rules, and how the 2012 amateur draft will play itself out differently than in the past.

A curious postscript. One of the most curious aspects of the new CBA is that teams that sign relievers this year won’t have to pay draft picks, but Jonathan Papelbon signed with the Phillies before and the new standards are apparently not being applied retroactively. Brad Johnson said this about this particular head scratcher:

– Not removing “Type A” status retroactively on Papelbon only makes sense if the Phillies were made fully aware up front that there was at least a chance of this happening and they would not recoup their pick if they signed Paps now.

– In such an environment, the Phillies simply may have chosen to spend what they did plus a draft pick rather than more money later without the draft pick. The team has plenty of picks but is a little strapped for cash.

– The Phillies don’t have the best track record with picks around No. 31. They’re almost more likely to find better players in Rounds 2-10 than they are to find a good MLB player at pick No. 31. Therefore, they may have seen the pick as entirely fungible.

– Again, waiting until after the CBA announcement probably means that Papelbon would add another $4-8 million to his contract demands, since hiring him would no longer also cost a pick.

Got any thoughts of your own? Please share them.

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t ball
12 years ago

Cubbluie’s idea is fantastic – but I doubt the players union would prefer it over the deal in place since it would likely put a slight drag on their salaries.

12 years ago

Why feel sorry for the Cardinals, Twins, and Brewers because the compensation for players like Dotel, Capps, or Rodriguez has changed?  The point of the change is MLB and the union realize that these guys aren’t worth it.  Feel sorry because the system has been corrected?

Greg Simons
12 years ago

@Mike S – Yes, the amount of blood taken will be small, but that’s what was stated.  As you said, any effect would be psychological.  Maybe those who are squeamish about needles or having blood drawn would be thrown off for a little while, but there would have to be a serious aversion for it to be significant.

We didn’t touch on instant replay, but fair/foul and trapped ball calls will be reviewable under the new agreement.  This is a very good thing.  Getting the calls right should be the top priority of officials.

Also, no new players may use maple bats, but they will be grandfathered in for existing players.  I think this is an overreaction.  There are ways to make bats safer – regulating minimum diameters, thin protective polymer sleeves to contain a broken bat, etc. – instead of simply banning them.