Baseball is fine, but MLB could use some tweaks (Part 3)

Third verse, same as the first: Baseball is not broken. Baseball is as beautiful a sport as it has ever been. The art of hitting a baseball with an elongated, rounded bat has amazingly persevered through the generations as something that is worth attempting. The drama that builds during crucial games is incredible as every single pitch can have more meaning than the last one. And, the ability to watch the rest of the games while chatting with friends and family on beautiful summer days and nights has also not lost its luster. So, please do not mistake the thoughts presented here as implying that baseball itself is broken. However, MLB could be better.

In part one, we discussed some ways to improve the MLB experience for the fans. In part two, we discussed ways to improve the MLB in game experience though we may have to add to it if MLB does not enforce the pace of play directives they instituted this season as Kirk Lammers mentioned Thursday. Now, in the last installment of this feature, we are going to go over how to improve the MLB Collective Bargaining Agreement from a fan’s perspective¹ .

Unfortunately, unlike the previous installments, I do not have definitive answers² . There are advantages and disadvantages to almost any approach taken. As such, I almost decided to skip this topic entirely, but, Buford Tannen asked if I was “yella”³ .

As a fan, I believe that the main component we want to see in the CBA is that our team of interest has hope to create a championship contending team. For a CBA to be effective to fans of all teams, it must be able to deliver hope to all teams. That hope does not mean a team is guaranteed to be a championship contender, but that a team can contend if their front office and coaching staff make intelligent moves⁴ .

International Prospect Signing

Current rules⁵ :

The International signing period begins on July 2 each year. International players 16 years of age and above are eligible to be signed and each team is given a slotted pool of money to sign international players based on reverse order of major league winning percentage from the previous season. To complicate matters, teams are allowed to trade for up to a 50% increase in their bonus pool money. To further complicate matters, the penalty for going over your bonus pool is to hard cap the amount you can sign an individual player the next year, but the team still gets their slotted pool of money for trading purposes⁶.

Due to MLB clubs targeting players at even younger ages, there was an additional rule placed in 2014. International players are not allowed to be at a team facility until they are 16 years old or until six months before they become eligible to sign, whichever comes first. You know, so that a team cannot give a prospect like Vladimir Guerrero Jr. the Reggie Bush Treatment while he is young so that he will sign with them once he is eligible⁷ .

Advantages

The international signing portions of the CBA are largely targeted at the Latin American countries. As such, they end up rewarding teams that develop a trusted relationship with the area players and coaches because they have to individually sign them. It actually works out in a similar fashion to the college recruitment, which is why MLB instituted a rule that teams may not contact a player younger than 16 years of age unless they are within a six month window of being signed⁸.

The advantage of such a system is that it gives teams incentive to invest heavily in baseball academies in these developing countries.

Disadvantages

The main issue with the international signing is that it is a completely different process than for Canadian, Puerto Rican, and American players. Having a parallel system in place due to the differences in development structures is unfortunate, but okay. I do not believe that having the system be completely different is acceptable. Then, add in the complexity of posting fees to Asian leagues and it gets really strange.

Proposal

MLB did propose an international draft at the time of the last CBA, but the MLBPA rebuked it. The current slotting system got the owners an overall dampening effect on the salaries⁹ , but did not change the fact that the system is not standardized. I would propose that the system matches the First-Year Player Draft rules as proposed below with a couple of addendums to it. First, that the age be maintained at 16 years. Second, that there be a restriction placed on posting fees separate from the governed pool money given to each team. Also, by changing it to a draft, the individual teams should donate money to MLB to maintain the existing academies in Latin America. If some teams want to put more money into those academies, then they could do so as a Sponsored Partner¹⁰ .

First-Year Player Draft¹¹

Current rules

Players who are residents of the United States of America, Canada, Puerto Rico, or any other USA territory are eligible for this draft if they are high school graduates¹², juniors in a 4-year college, or have turned 21 years of age. Teams select from the worst record to best record order according to the standings of the previous season.

The pool money is given to teams based on where they have picks¹³, but the team may use their pool money allocation however they wish. The one difference here is that they only get the pool money allocated if they actually sign the player they drafted in that slot. So, if a team does not sign their first round pick, then they do not get the money allocated for that slot either. If the team does sign their first round pick, then they can potentially sign him for less than his slot money and use that money on another player later in the draft.

And, if you do not think that is complicated enough, then you can read about all the different caveats about signing¹⁴ and exactly which players are eligible here.

Personally, I think the Evil Minions are responsible for writing the MLB rulebook:

https://www.youtube.com/watch?v=TCVG0VLa60E

Advantages

Having a draft rather than signing players out right allows the teams to be on more equal footing to acquire prospects. Putting the teams in reverse order of the standings allows the worst teams to have some measure of hope that they can get better. Having a specific set pool of money to sign prospects was added in order to help remove the word signability from the scouting reports¹⁵ .

Disadvantages

It is odd and unfair that a player attending a 4-year college is penalized professionally in baseball compared to one that goes to a junior college. It is also unfortunate that so many players are drafted that do not actually sign because it is difficult for fans to get excited about a draft that is 40 rounds long made up of many players that will not be signed¹⁶ .

In addition, a team does not know how much money they actually have to utilize because it depends on how many players actually sign contracts (oftentimes, these negotiations run to the last hours as agents use it as leverage). The unknown number of signings also make it difficult for the MLBPA to properly negotiate how much money should be made available in the pool.

Proposal

MLB needs to standardize everything it can here. Keep the draft, but change the eligibility rules to make 4-year college students on the same footing as high school players and junior college players.

Also, players need to submit in their documentation the round value at which they guarantee that they will sign with a team in order to help navigate the continuing signability issue. It would read that if a team offers full slot value for where they are drafted up to a specific round, then they guarantee that they are willing to sign¹⁷. As such, the amount of rounds should be able to be reduced signfiicantly.

Finally, the teams get their full slot money just as they do for the international signings. They may use it even if they do not sign the player from that particular slot.

Service Time

Current rules

Even after a prospect gets drafted and signs a contract with a team, the stringent rule system is not over. MLB has rules placed based on service time accrued at the MLB level. Currently, a player receives a paltry sum of money (as compared to veteran peers) for the first three years of his professional career¹⁸. That time is accrued by being on an active MLB roster, disabled list, or suspended list. There are a ton more exceptions (surprise!) and you can read about them here.

Even after those first three accrued seasons, the player is only eligible for arbitration through the next three seasons, which is still significantly below the market value for that player. Finally, after six full seasons of accruing MLB service time, the player is allowed to enter free agency. Of course, at any point, the player and team can agree to sign a separate contract.

http://33.media.tumblr.com/b04651773e6a31ba2b04fd04fc9bc2b1/tumblr_n1tihur1wi1trg912o1_500.gif

Advantages

The team has control of the player through their minor league development and their initial time at the MLB level. As such, a team can choose to be patient with prospects and allow them each to develop at their own pace rather than by an arbitrary contractual clock. Small market teams can load up on younger prospects knowing that they will be on affordable contracts for a relatively long period of time.

Disadvantages

Players value is completely dampened to the point that they need to perform at a high level for far more years than any other sport to get paid market value for their skills. From a fan perspective, it is not a huge deal except that it is likely the biggest point of contention in the upcoming CBA negotiations that could cause an extended lockout or strike.

Proposal

A system that mirrors the NBA. Keep everything the same until after three years of MLB service time is accrued. At that point, the player becomes a restricted free agent that is free to sign with any other team, but their existing team has the right to match that contract. It will dampen the value some, but it should not be as drastic. Also, it will create a secondary market for free agency that would be both entertaining for fans and valuable for teams.

Small Versus Large Market Dynamics

Current rules

Basically, MLB tries to balance the market dynamics in two different ways. Charging a competitive balance tax (luxury tax) on teams that spend a bunch on payroll and providing revenue sharing for teams that do not bring in as much money. The luxury tax money goes into industry development, while the revenue sharing is something that every team puts 31% of their local revenue into and then take an equal share back out¹⁹ .

Luxury Tax Details

The threshold level for the luxury tax will be $178 million in both 2012 and 2013 (the same as it was in 2011), and will be raised to $189 million from 2014-2016. And offenders will be charged the following tax rates, depending on how many years in a row they have been above the threshold:
First time: 17.5%
Second time: 30%
Third time: 40%
Fourth time and higher: 50%

https://33.media.tumblr.com/cf87668f1394f62a25dde8c6a52d64fc/tumblr_n8z4jjABDx1rylr5to1_500.gif

Advantages

MLB at least recognizes that there is a large discrepency between the large market teams and the small market teams. These devices are attempts at balancing out the scales to some degree. It is not meant to completely balance it though as MLB seems to recognize that the sport is more popular nationally when the landmark teams (Yankees, Red Sox, Dodgers, Giants, and Cardinals being the biggest) are doing well.

Disadvantages

Since the system not only favors the large markets, but it has not kept up with the increasing disparity between the local revenues between the large and small markets, the smaller market teams have to get creative in order to compete. For instance, the Oakland Athletics have averaged 93 wins over the last three seasons, but they decided it was in their best interest to trade off many of their best players in order to retool for the future (Josh Donaldson, Yoenis Cespedes, Brandon Moss), which is frustrating for fans of those teams and at the same time understandable given the parameters within which the team has to work.

Proposal

The luxury tax threshold should not be based something other than a somewhat arbitrary set value. The exact modeling of it can be debated, but the other professional sport leagues seem to be able to handle a yearly moving target. The revenue sharing is a trickier issue because I do not know how to properly balance it so that teams are rewarded for spending rather than banking profits, but, at the same time, are not penalized to the point of non-contention based on location. I am open for suggestions here.

Part 4 Teaser

Part 4 is whatever you guys put in the comments. You can write it yourselves as my installments are done 🙂

1. the one perspective that does not have a voice in those discussions [↩]
2. or, answers that I believe are definitive [↩]
3. if you think that you will be inundated with BttF references in this important year for that trilogy, then you are correct. [↩]
4. the NFL is the king of instilling hope despite an elite group of 6-8 teams being annual contenders [↩]
5. I am going to paraphrase and give highlights rather than the bogged down details. [↩]
6. So, if a team really likes a prospect, they can spend whatever they want, but they will not be able to sign a good prospect the next season. [↩]
7. Cough Toronto cough… [↩]
8. A 15-year old who is turning 16 before July 2 that year. [↩]
9. except for the best players [↩]
10. despite it being a draft, there would still be value to brand recognition in the process and some teams would invest there [↩]
11. also known as the Rule 4 Draft [↩]
12. Junior college players are considered the same as high school graduates [↩]
13. Certain amount allocated for each slot. [↩]
14. And what happens if you don’t sign your player. [↩]
15. Though it is still a signficant factor as it effects the slot money a team has to use. [↩]
16. And the vast majority of the other picks will not be seen at the MLB level for years. [↩]
17. Yes, I understand the issue that putting a low grade on yourself may dampen where you are drafted, I am open for suggestions here. [↩]
18. Ugh, except for Super-2 exception, yada yada… [↩]
19. Note: luxury tax paying teams will not receive any money back starting in 2016 [↩]