So, Major League Baseball and the Major League Baseball Players Association reached an agreement this week on a new Collective Bargaining Agreement that keeps labor peace for the next 5 years. In any large, complex agreement, there are going to be positives and negatives that greatly and minimally impact the practices within an organization. Rather than sifting through an extremely long legal document with many articles and subsections, Ben Nicholson-Smith of MLB Trade Rumors has broken the new CBA down into 10 key points that are now in effect for MLB. Here is a list of the ten:
1. Playoff Expansion as Early as 2012
2. A "Mid-Level Exception" Concept for old Type B level players
3. A Cap on Spending in the Draft and a Draft "Luxury Tax"
4. An Earlier Signing Deadline for Draft Picks
5. Changes to Compensation Rules for Traded Players
6. Loose Trading of Draft Picks
7. Limits on International Spending
8. More "Super Twos"
9. Earlier Deadlines in the Off Season
10. Expanded Rosters for Doubleheaders
Now, to understand each of the 10 concepts, here are the positives and negatives for each, along with my personal grade for the move overall:
1. Playoff Expansion as Early as 2012
Positives:
This really only provides positives as far as MLB is concerned. Playoff expansion puts more teams in the race, thus increasing fan interest during the regular season. This will lead to, hopefully, more sales in tickets, merchandise, and more tune-ins during television and radio broadcasts. Having more teams interested in the regular season will also lead to more interest in the playoffs, because more teams will have already followed for 162 games. Adding a one-game playoff means an extra opening of two MLB ballparks, thus increasing overall league revenue. If a small market team like Tampa makes it, that's a big difference.
Negatives:
Baseball is a game of tradition, and it definitely likes to hold to those roots. Some of the franchises are nearing 150 years old, and a lot of the old traditions in baseball still exist. A lot of change in baseball has been good, but a lot of it has also either been bad or has been improved upon after being changed. By constantly changing the way the fans view the game, baseball is taking a chance at losing old fans in favor of gaining new ones. Hopefully the positive gain in new fans is large and that old traditionalists can stick with the game.
Wooly's Grade: B+
The format for the new playoff system is ideal, but adding big-money games to the schedule is always a plus. Getting people more interested in baseball is always going to help the game.
2. A "Mid-Level Exception" Concept for old Type B level players
Positives:
The positives that stem from this would be that the "average Joe" in MLB would not be undervalued like he is in every league with a salary cap that is currently playing (HAHA, NBA). It would make it so that players have an easier path to earning more money and have more leverage in negotiations when they become unrestricted free agents. This helps large market teams by giving them more consistent access to the average players they need to acquire to round out their rosters.
Negatives:
This move makes it extremely hard for small market teams to hold on to even the average players. Lack of finances already makes it hard for small market teams to keep big players, so making it harder for them to hold on to average players is crippling. Here's an example: in the current system, Ronny Cedeno (assuming he's eligible for arbitration) would be offered arbitartion, and if he accepts, the debate would go to an arbiter and a salary would be negotiated. The player wouldn't make as much money, but would be able to sign a fair deal to both parties. If he didn't accept arbitration and qualified as a Type A or Type B free agent, the team would be compensated for the loss. In the new system, middle-tier free agents (like a Ronny Cedeno if he would be going into free agency) will make, at a minimum, the average dollar amount of the 125 highest paid players in the game (roughly 12 million dollars). If the team declines, the player goes to free agency as an unrestricted free agent and will likely sign with a new team. They will then be able to use the new arbitration level (the average of the 125 highest paid players) to negotiate their new deal.
Wooly's Grade: D
I do not approve at all of the inflation of contracts for average players. While it can help some teams, it does not promote proper distribution of money based on performance. I would say it hasn't helped in the NBA and definitely won't work in MLB.
3. A Cap on Spending in the Draft and a Draft "Luxury Tax"
Positives:
I can only find one positive from this: players can't hold out on teams and then negotiate with large market teams to get contracts. Also, players taken high in the draft won't be making insane amounts of money to potentially be complete busts.
Negatives:
Teams that were beginning to spend the most on the draft (Pittsburgh, Kansas City, Atlanta, Texas, Toronto, etc) no longer get to take advantage of the market inefficiency that existed. The new CBA has destroyed the newest form of Moneyball, in a sense. The free agent market has become so inflated and inefficient that small market teams simply can't compete in it. Therefore, they began to direct more of their resources to spending in the draft. Now when they try to take advantage of that, they will be punished. The playing field has been "evened" despite the old system favoring the teams smart enough to properly allocate their resources. Another major problem is that draftees can no longer sign....wait for it....major league contracts! That's right, everyone is essentially going to be loosely slotted and can only sign minor league deals. Less incentive for kids to come out early. A high school kid now basically only has the option of going to college over the pros unless he is a top 10 slotted pick.
Wooly's Grade: F
Major League Baseball comes up with a major fail on this one. The league was getting a lot better with letting small market teams take advantage of market inefficiencies, and this is a major step backwards. This hurts the Pirates and Royals so much that it isn't even funny.
4. An Earlier Signing Deadline for Draft Picks
Positives:
Draft picks can't hold out for contracts as long as they could before, and front offices have to put less time towards signing guys.
Negatives:
It's easier for players to hold out and not agree to contracts. There is less pressure on them to sign, and there is much more pressure on teams to get deals done. Some contract negotiations will be rushed.
Wooly's Grade: C
Really, in the end, I think this is just something that owners wanted for reasons I am unaware of.
5. Changes to Compensation Rules for Traded Players
Positives:
Teams will no longer be able to trade for random Type A or Type B players mid season and take advantage of the compensation system while watching the player walk away in free agency. Essentially, teams won't be able to turn a mid-level prospect into a first round compensation pick.
Negatives:
Teams trying to unload large contracts at the deadline for so-called "rental players" now have a lot less bargaining power. A player now has to be on a roster for the entire year for a team to be able to access compensation for him. This means that the Giants have a lot less incentive to trade for Carlos Beltran at the deadline, and means that there's no way they get an elite prospect like Zack Wheeler out of the deal. Elite players in the last year of their deals will begin to go for less to large market teams from small market teams. This means that the Yankees can trade the Pirates for Andrew McCutchen in the last year of his deal and the Pirates will have access to less compensation than they would have before.
Wooly's Grade: D
Another move that hurts the progress of taking advantage of market inefficiencies. Teams like the Blue Jays (who have a genius for a GM) won't be able to trade for the Kelly Johnson's of the world and get compensation for it. The league is giving more leverage to large market teams, here.
6. Loose Trading of Draft Picks
Rather than focus on positives and negatives for this one, I'm going to say that not enough was done with draft pick trading and that the new system is extremely situational. I do not understand the details well enough yet to comment properly on the topic. As of now, compensation lottery picks can be assigned to other teams. Perhaps some more research on this will benefit everyone.
Wooly's Grade: B
I like the concept of trading draft picks, even though I don't fully understand how MLB has changed the system. It's a start, and will serve as a base for future discussion of the trading of draft picks.
7. Limits on International Spending
Positives:
No more Daisuke Matsuzaka-esque postings. Teams will have better access to international players and they won't be as pricey.
Negatives:
This is a lot like capping the draft. It punishes teams for spending smartly in the international market and trying to take advantage of market inefficiencies. It puts everyone "on the same playing field" when in fact it makes it so hard-working small market teams can't take advantage of the larger market teams who don't properly allocate their resources into international players. This is the second CBA decision that has limited access to a newer, well-developing "Moneyball."
Wooly's Grade: D+
The idea behind limiting international spending is good, but the way MLB has gone about it hurts small market teams way too much.
8. More "Super Twos"
Positives:
Players that are fast developing will have faster access to arbitration. As they progress, they will be better and more quickly able to negotiate their contracts. It makes teams more fairly pay their young players. This also encourages the signing of more team-friendly extensions that eat up a player's arbitration years. These contracts are extremely efficient and beneficial.
Negatives:
Small market teams will have to start paying more for their young stars at an earlier age. The faster the players develop, the better access they will have to more money. This will limit the money that small market teams can put towards the free agent market, including average players and elite players. In order to prevent this from happening, teams will be more reluctant to call up their star prospects, and will likely do so later in a season, which hurts the development of the player and the overall competitive level of the team itself.
Wooly's Grade: F
This will just hurry the process of star players from the Royals being placed on the Yankees' roster.
9. Earlier Deadlines in the Off Season
This just speeds up the process of the off season and creates a longer time for the free agent market to grow and develop. Teams have to offer arbitration earlier after the end of the World Series and rosters will begin to take shape earlier, likely before the GM meetings and then the Winter Meetings in December. This will likely just promote more fruitful discussion at those meetings between teams and agents.
Wooly's Grade: B
Doesn't create a lot of positives, but it speeds up the off season and lets more fruitful discussion happen over a longer period of time.
10. Expanded Rosters for Doubleheaders
Basically, a team can carry a 26 man roster for a doubleheader day so that teams don't have to worry about added strategy going into a double header. It gives them more roster flexibility.
Wooly's Grade: A
This is a long-awaited move that reduces the possibility of injury and gives teams more flexibility. I'm all for this kind of move. Unfortunately, the CBA didn't do enough of this.
Overall Reaction:
This CBA has hurt small market teams so much that I would legitimately entertain the idea of a hard salary cap. I have been against the idea of a salary cap in baseball forever, but it's just so hard now to justify its existence with the way the new CBA is written. Large market teams now have a financial advantage, won't be hurt as much in the draft, won't lose as many draft picks in the compensation system, will have more leverage in trade deadline negotiations, and will be hurt less by the international market. So many things have been given in favor of large market teams that small market teams can't keep up in an open market. Eventually, the "Mid-Level Exception" for the arbitration figure mentioned earlier will be unaffordable to most teams. This is because the contract extensions for Howard, Braun, and others haven't kicked in, and guys like Pujols, Fielder, Wilson, Darvish, and others will be getting massive pay days and will feed more into the top 125.
It's good that this new CBA is only 5 years.
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