Colt McCoy’s Interceptions Are Not Out of Control… Yet
November 29, 2011Lake Erie Monsters Give Cleveland an NBA Alternative
November 29, 2011Yesterday, I looked at how the increase in league minimum salaries will disproportionately make it more difficult for teams like the Indians to amass cheap young talent. The CBA is full of these sorts adjustments, and while I continue to be happy the league won’t be encountering a work stoppage anytime soon, it’s a bit difficult for me to stomach how poorly I think small-market teams did in this deal.
Today I want to start looking at the changes in the draft. We’ll save my biggest problem regarding the draft—the cap on spending—for tomorrow, but there’s still plenty not to like about the direction that the draft is taking under the new CBA.
The other main problem I see here is how the league handles compensatory draft picks for teams who lose players to free agency. In the past, any club who lost a Type A or Type B player to free agency*, was entitled to draft pick compensation. Losing a Type B player would give a team a pick in the supplemental round of the draft (between the first and second round). Losing a Type A player would give the team the acquiring team’s first round pick, along with a supplemental round pick.
*A player’s “Type” was determined by the Elias ranking system, which was admittedly a pretty opaque way to rank players; Type A were assessed to be in the top 20% of the free agency class, with Type B the next 20%. Players ranked below the top 40% carried no draft compensation at all.
But under the new system, only players who have been with their teams for the entire season will be subject to compensation. Furthermore, a free agent will only be subject to compensation if his former team 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. For reference, that’s currently about $12.5 million. You’re not going to be getting draft pick compensation for many bullpen arms under this new deal, which was quite a boon for teams in recent years.
What does this means for small-market teams? First, it will be harder and harder to get any value in a trade from their superstar players as they approach free agency. In the past, if you wanted to trade a good player who is approaching free agency, your basement asking price should be the equivalent of two first-round picks, because that’s what you’d get if your player signed with another team. Now, without that guarantee, the rich teams can offer less and less to poach players from smaller market teams, since the draft compensation is no longer a guarantee. And without any guarantee of compensation, small-market teams will be forced to take the best offer, because something is almost always better than nothing.
More than that, it closes a loophole that smart teams have been using for the last decade. If you could work out a deal to acquire a player that you thought might be a Type A or B free agent for less than what you thought you could get out of the draft, you’d do it, even if it were in the middle of the season and you had no intention of actually playing the player. In other words, players who were about to become free agents used to be valuable commodities that smart teams (like the Rays, Athletics and Red Sox) used to accrue additional draft choices. Now, you can’t add a player in the middle of the season for this purpose, since the player has to be on the team for the whole year to even begin to qualify for compensation (not to mention the requisite $12.5 million offer).
Do these changes disproportionately affect the Indians? Not exactly. The Red Sox developed quite a reputation over the last several years for abusing the loopholes in the compensation system, and they’re anything but a small-market team.
But the changes do make it more difficult to rig the system in your favor. These little loopholes provided opportunities for smart teams to build additional value into their acquisition strategies. Closing them makes it easier for dumb teams and harder for smart teams to succeed. In other words, it levels the intellectual playing field. And in this case, that’s not what we want, because the only for poor teams to succeed to be smarter than the average bear.
Whatever you think about Shapiro and Antonetti, I think it’s pretty clear that they spend most of their time trying to win an unfair game. By eliminating a tool from their toolbox, the game just got a bit more unfair.
All this isn’t even close to touching the biggest problem with the draft: the cap on spending. I’ll look at that tomorrow.
9 Comments
Solid and clear analysis, Jon. Thank you.
You’re depressing me Jon.
And yet, I just can’t stop reading…
Another great article, Jon. I really enjoy these insights that I would normally never seek out if not for WFNY. Although, so far it seems like the news is getting worse and worse each day/article. Did ANYTHING good (for the Indians) come from this new CBA? Maybe you’re just saving the best for last…
And if I may pick one tiny nit – “And in this case, that’s not what we want, because the only for poor teams to succeed to be smarter than the average bear.” I don’t claim to be smarter than the average bear, but methinks there’s at least a word or 2 missing from this sentence.
(Sorry, I do my best to refrain from pointing out errors as long as I can correct them in my head, and while I think I can here, I just wanted to be sure.)
I’d also like to know if anything good came out of this CBA for small-mid market teams.
#4: Continued revenue sharing, I’m sure. What you really mean is did anything good come out of this CBA for the FANS of mid/small market teams.
It sounds like a little form of communism is being brought to the MLB.
2 great articles yesterday and today on the CBA.
I think baseball was also trying to force the owners of the small market teams to spend a little bit more money to help the competive balance and in the same breath handcuffing the smart ones. I think they were trying to say, if you are going to own a professional sports team, we expect you to spend money and make a concerted effort at winning. Please don’t sit back and take the revenue sharing from teams who choose to spend (ie, the Marlins).
The problem, as we all have learned, their is a fine line between spending for the sake of spending and not overpaying for what could have been a fluke season.
Doesn’t this make it more likely for teams to keep their players and not do the midseason fire sales? Isn’t that a good thing?
Most teams that trade for those free agents aren’t doing it for the draft picks anyway. They are mostly doing it for the sake of competing in the short term.
The change that I would really like to see to the draft system would be to allow teams to trade draft picks. That would be a good replacement for the compensatory picks of the previous system.
I’m staying neutral on the CBA until I see how it plays out over the next couple of years.
That said, a few points —
1.) Like you pointed out with the Red Sox, many of these holes were being exploited by the big market teams too. So closing them down hurts all teams. I feel this way about tomorrow’s topic, the cap on draft spending, too.
2.) I think #6 is right in that this forces the hands for teams like the Marlins and Pirates. Those teams chronically underspend (unlike the Indians who fluctuate between the bottom and middle). Those owners mooch off the luxury tax spending teams which I don’t think is good for the game.
3.) Outside of a radical, unrealistic reorganization between MLB and labor, the big revenue, big spending teams will always have a distinct advantage.
4.) Finally, I think there will be a whole lot of unintended and unforseen consequences, some of which might favor teams like the Indians. So while it’s fair to gripe, don’t get too upset until we see how things play out.
1) I’ll try to get to some positives on Friday. We’ll see if I make it, but there are a few possibilities for good to come of this (albeit in unintended ways).
2) Is it “better” for bad teams to keep their players at the trade deadline and get nothing in return for them? I wouldn’t say so, but I think I see where you’re going with that. I just disagree.
3) I’ll address the cap on draft spending tomorrow, and I’ll hopefully be more clear about why this is more detrimental to the smaller market teams. Stay tuned.
Glad you guys are enjoying this series.