Tuesday, November 22, 2011

The new CBA

by Jason Wojciechowski

Larry Stone helpfully provided a link to the press release announcing the new CBA between the MLBPA and MLB. The Common Man has already given you his thoughts on the draft bonus cap rules, but I wanted to bang out a point-by-point, because there's a whole lot to talk about -- 4 1/3 pages in the release, to be exact.

Here, then, is a relatively comprehensive list with commentary of the new stuff in the CBA. Some of it you've seen before (draft-pick compensation), some of it I haven't seen discussed elsewhere (maple bats), and some of it is incomprehensible to me (debt service rules).

First, the second wild card. I can't get too incensed about this because the post-season is an exercise in randomness as it is. Adding more randomness takes away a little bit from the odds that the best team wins the World Series, but those odds are so low already (putting aside the question of what "best team" means) that I don't see the needle moving enough to get worked up.

Second, realignment. The Astros are moving to the A.L. West. For baseball, I like the move. It regularizes interleague play, evens the divisions and leagues, and generally makes a lot of aesthetic sense. It's sport. Aesthetics matter.

As an A's fan, I'll just say a few words: this kind of blows. Sure, the Astros are a joke right now, but have you seen Houston lately? I have. It's a huge city and a city of significant wealth. (Query whether that wealth will go the way of Rust Belt wealth as worldwide energy policy changes, but that's not likely to happen for years yet.) Jim Crane, the new owner, is exploring a regional sports network with the Rockets, and Jonah Keri has written about how rich these TV deals can be. Rich isn't all there is, obviously, but it's only a matter of time before the Astros are run competently and can use their resources to crush those who stand in their way.

Third, teams will be allowed to carry 26 men into battle for "certain regular or split doubleheaders." I don't know if anyone knows what "certain" is, but this is the kind of move that GMs, managers, and pitching coaches will love and the players benefit from (a few additional days here and there of major-league pay), so I'm sure the owners were perfectly happy to add a little bit to their projected operating expenses for this small change.

Fourth, "electing for free agency" no longer exists. This is pure housekeeping, but bless the hearts of the negotiators for including it -- who didn't, after years of following baseball, get sick of the annual "273 players elect for free agency" stories in November? Did they serve any point? The elimination of this easy fodder for lazy baseball journalists is boon enough to get me on board with this change.

Fifth, the date to tender contracts is moved up to December 2nd. The date for same this year is December 12th, and I assume that's been the case in years past. Ten days probably won't make much difference to teams (except those who fire their GMs and then drag out the search for a new executive), and it'll get the free-agent period moving a little faster. Given the below, about draft-pick compensation, tendering contracts to arbitration-eligible players won't have nearly the importance it's traditionally had, though, so this movement of the date shouldn't materially affect our experience as fans.

Sixth, we've seen a trend lately of veteran free agents who sign minor-league contracts getting an opt-out whereby said free agents can choose to become free agents again if they are not called up to the major leagues by June 1st. It appears that this is now in the CBA -- any six-year free agent who signs a minor-league deal and who is not released at least five days prior to Opening Day or added to the major league roster gets an additional $100k on top of his negotiated salary and a June 1st opt-out. It is unclear to me how much effect this will have, but it is an interesting (and overlooked, I think) bit of formalization of what had started to become standard in the industry.

Seventh, no more Elias rankings for free-agent compensation. Hallelujah!

Eighth, more seriously, the new free-agent compensation system. The players eligible to earn their teams compensation should they sign elsewhere are those who (a) have played the entire season with their team; and (b) have been tendered a contract worth the average of the top 125 highest-paid players from the previous season. A team signing such a player loses its first round pick, unless said pick is in the top ten, in which case it gives up its second-rounder. (The protected picks used to extend down to the top 15.) The team gaining picks also gets a sandwich-round choice.

I'm having trouble finding a list of the highest-paid players that goes past 25, which strikes me as a pretty big failure by the internet. Nice job, internet. Anyway, I'd love to tell you what the required tender amount for 2012 would be were the rules in effect this year, but I can't. Sorry.

Ninth, "Super Two" status for arbitration eligibility is now the top 22% of two-plus-year service-time players instead of the top 17%. There's been some complaining about this change leading teams to leave their players on the farm even longer than they have been in order to monkey with their service time, but 5% of whatever the small number of potential super-twos is isn't enough to complain about. I think the complaints are a function of everyone's high hopes that Super Two status might be going away.

Tenth, major- and minor-league minimum salaries get a substantial bump -- 16% for the major leaguers this year, going up to $500,000 in 2014, and cost-of-living increases for the two years after that. The main positive from this is that in 2014, the minimum salary in the majors will be a fantastically round number.

Eleventh, the draft signing deadline is being moved up an entire month, to the middle of July, giving teams and amateur players significantly less breathing room to negotiate. However, given the below re: bonus caps and such, there simply will not be much to negotiate over. Players will accept what they're given or they'll go back into the draft the next year. (Or go play football.) The changed date does mean that indecisive players will have a chance to play a more substantial part of the minor-league season than they have in the past.

Twelfth, no more major-league contracts for amateur players. This is purely a cost-saving measure for the owners that has no effect on the actual members of the players union. MLBTR ran a list of the biggest major-league contracts given to draft picks last year, but I'm not sure there's much to conclude from it in terms of competitive balance. Rick Porcello and Andrew Brackman are the only players on the list who appear to have fallen substantially due to contract demands, so removing the major-league-contract ploy from those dastardly Yankees should have very little effect on baseball going forward.

Thirteenth, bonus caps for the draft and penalties thereupon. The basic idea is that every team is given a pool of money that it is permitted to spend on the draft. Going over that amount results in a tax (75% of the overage for amounts up to 10% in excess of the pool; 100% of the overage for all greater amounts) that frankly are not terribly onerous. Given that the dollar amounts on a single draft are in the range of Clint Barmes money (Clint Barmes for one year, that is, not even full-contract Clint Barmes), 75% of 10% over the pool isn't going to add up to enough to deter teams from additional spending.

What will deter teams is the loss of future draft picks. Spending 5-10% over the pool results in a lost first rounder, 10-15% a first and a second, and greater than 15% the next two first rounders. This might be Brian Sabean's dream, but it is in other respects a method by which teams will surely be deterred from spending all but the tiniest amounts over their pools. Tenth-round picks will scramble to sign under-slot just in case the first-rounder wants a big portion of the pool, such that the tenth-rounder is left with the choice of getting zero bonus at all. Stephen Strasburg will be paid exactly the same as Bryan Bullington. A willingness to spend in the draft will no longer be a method by which a team differentiates itself from the competition, nor, more importantly, by which a team differentiates itself from itself in terms of recognizing its place in the success cycle.

Bad teams passing on players for signability reasons has been, in my eyes, fading a bit lately, so the reduction of that phenomenon's effect on the draft to zero (or near-zero) won't be the same boon to competitive balance as it might have been in 2002. In any case, nobody wants NFL-style competitive balance -- we want earned competitive balance, where teams with smart front offices can compete on a semi-level playing field. Reducing low-revenue teams' ability to tilt the playing field their way a little bit by investing in high-return areas like amateur scouting without any concomitant reduction in the slide of major-league talent to a select group of franchises will only increase the frustrations of A's fans while fattening ownership's pocketbooks. All this for a 16% minimum-wage increase?

Fourteenth, interestingly, forfeited draft picks (of which there will surely never be a one) do not disappear entirely but go into a lottery weighted by prior-season winning-percentage and prior-season revenue.

Fifteenth, the teams that comprise the group representing the ten lowest revenues and the ten smallest markets will be entered into a lottery (weighted by winning percentage) for six draft picks that immediately follow the compensation sandwich picks. The teams that do not win that lottery along with all other clubs that pay into the revenue-sharing pool will be entered into another six-pick lottery for 2nd-3rd sandwich picks. This does, at least in part, address legitimate competitive balance issues by pushing small-market teams up the chain to acquire potentially significant assets. Sandwich picks in the draft don't have the same rate of return as top-ten picks, of course, but they're still, on average, assets.

Sixteenth, fascinatingly, it appears that these lottery picks can be traded. I've been a proponent of the trading of draft picks for years. With the implementation of hard-slotting of bonuses, I'm even more in favor of trading picks -- a team can control its spending on the draft by trading around in that draft. This is obviously a very limited pool of tradeable draft picks, but it's not nothing, and, perhaps more in the realm of wishcasting than actual prognostication, I can see this as a trial program toward real pick-trading in five years.

Seventeenth, "top 200 prospects," however that is defined, will be subject to pre-draft drug testing. I have no idea how this is legal given that, as far as I know, one does not declare for the MLB draft the way one does for the NBA and NFL drafts. If the 15th-best prospect in all the land has a strong commitment to Stanford, who is MLB to come in and tell him that because he might be drafted and might be offered a lot of money (which won't happen anymore now that a team can't go over-slot to entice him away from Stanford) that he has to take a drug test?

Relatedly, the potential effect on college baseball of the new draft system could be interesting. Colleges that offer significant secondary (to baseball) reasons to attend might win out over other schools in the fight to keep their commitments from signing major-league contracts. Wouldn't it stand to reason that it would take more money to keep a kid from Stanford or Texas or Hawaii than from Oklahoma State or Cal State Bakersfield? And thus that the inability to offer that additional money will mean more kids going to those schools?

Anyway, eighteenth, the union and owners have agreed to revisit the question of drafting international players. What this CBA does to international amateurs is already horrendous -- subjecting them to a draft would be awful.

Nineteenth, based on winning percentage, each team is allotted a pool of money with which to sign international players. Going over this pool results in taxation in the same proportion as for the draft, above, and also the loss of the ability to sign players the next year. I have little to add to this beyond what I said about the draft, though I do like the wrinkle that bonus pool amounts will be tradeable, which is pleasing to me as an "everything is tradeable" fantasy geek.

Twentieth, in a real positive move assuming that it's actually meaningful, owners and the union are forming a committee that will help international players transition to the real world after they are done playing. I think we can chalk this one up to Sugar.

Twenty-first, the top half of teams in the largest markets will not be eligible to receive revenue-sharing funds after 2015. I don't know enough about who receives revenue-sharing funds to comment on this change's practical effect, but it is at least a positive step toward aligning the theory (balance) with the practice of the system. Large-market teams that fail to capitalize on their revenue opportunities will not be permitted to cry poor. (Query whether the A's will fall into this group.)

Twenty-second, there are a variety of health, pension, and insurance changes that are only alluded to in the press release. It sounds like all of the changes are in the way of positives for the players and retirees, however.

Twenty-third, players will not be allowed to chew tobacco during TV interviews.

Twenty-fourth, players suspected of alcohol abuse, including those arrested for DUI, will be sent to a mandatory evaluation by a professional. Assuming the meaning of "suspected" is not incredibly loose, I am fine with this.

Twenty-fifth, no more low-density maple bats for new players. This is a lightning-strike issue, but, like lightning strikes, the damage that can be caused by the low-probability event of someone being speared by a bat shard is enormous and traumatic. I'm glad no one had to get killed for this to happen.

Twenty-sixth, a new and improved helmet is mandated for all players by 2013. It is apparently a less large version of the improved helmet that players like David Wright tried out in the last few years. I don't see any downside to this.

Twenty-seventh, HGH blood testing. I'm sure this will be rendered mostly irrelevant by advances in PED technology by 2013.

There you have it. What did I get wrong?

7 comments:

Anonymous said...

Brackman didn't fall due to contract demands, he fell because he blew out his elbow and it was known on draft day that he would need TJ.

William Tasker - Caribou, ME said...

This is an absolutely amazing post. One of my followers asked me to write a post with my opinions on the CBA. I'll just send them here. Superb work, Jason.

mattymatty said...

Great work, Jason.

The only thing, since you asked, is the part about maple bats. The text I saw (possibly in the Boston Globe) said that nobody who wasn't currently using a maple bat could start using one, but those who use them currently don't have to stop. It's a way of phasing out the maples (or low density maples, I'm not honestly sure of the difference) over time. There will still be maple bats next season and, presumably for many years to come.

Jason Wojciechowski said...
This comment has been removed by the author.
Jason Wojciechowski said...

Matt, you're absolutely right, and I should have made that more clear. Given the turnover in baseball, especially at the fringes of the roster, I think that within a few years, the pool of players who can use the bats will be fairly small and shrinking. It may take twenty years to fully phase out the bats (the same way Dave Winfield kept wearing that flapless batting helmet all the way into the mid-90s), but I'm happy they're on their way out.

I would like to think that there will be some players who voluntarily move to different bats as well, but perhaps I have too much faith in baseballing humanity.

RedStalk said...

Excellent article, though I have a nit to pick. I think your assertion that adding another wild card decreases the odds that the best team wins the series is incorrect. Assuming that the ‘best’ team would be the one with the best record and given that they would not play additional games, the addition of a worse team to their pool of possible opponents would increase their odds, albeit slightly.

Jason Wojciechowski said...

Red, you're right. Because of the structure of the new playoffs, where it's not a wholesale expansion but a new hurdle for the wild-card teams, the best teams, which typically are not the wild card teams, won't really be affected negatively. Good call.