My idea for overhauling free agent draft compensation

[RyDogg66]

Maybe this is a stupid idea, or one that would be impractical to implement, but Ive given it some thought, let me know what you think.

 

First, let me address what I feel are some of the problems with the current draft/FA compensation system.

 

1. It hurts the players. No, not the A-Rods or the world, but the Graffy's of the world, and most likely someone like Mench or Jenkins. The reason being is that talent wise they may be worth a 2 or 3 year deal at "market value" for the sake of argument lets call it 5 million a year. However, they may not be worth losing a draft pick for, so teams do not offer them a contract and they accept arbitration and get a one year deal worth 4.5 million. They could be leaving millions on the table because of the draft pick implications.

 

2. It helps Big Market teams more than Small market teams. For as long as I can remember teams like the Red Sox, Yankees, Braves, Mets, Cardinals, etc, etc have had a lot of picks late in the first round and in the sandwich round. That is because

 

a. to get those picks you have to offer a player arbitration Large market teams can offer any and all of their FAs arbitration without fear of the player accepting arb, because if they do, the large market team can absorb the hit in salary for a player they didnt really want. Small market teams may not offer a player arby because they wouldnt be able to pay him for one year even if he did accept (Vlad Guerrero comes to mind); and

 

b. Large market teams in the hunt for the playoffs often trade for FAs to be and with the addition of the player for the stretch run they acquire two high draft picks as well.

 

The way it inevitably ends up is a team like the Royals or Reds may have a top 10 pick, but then not pick again until the 50s or 60s, while the Yankees and Red Sox may not pick until the 20s but have 4 picks before the Royals make their second selection. With the high flame out rate of MLB draft picks, even 1st rounders, having 4 picks in the top 50 is much better than having picks 5 and 60.

 

The only current protection for small market teams is that they cannot lose their first round pick if they pick in the first half of the round. This is based on the record of a team. Essentially what you are doing is REWARDING poor team mangement and penalizing good team management. Look at the Cubs, they pick what, 3rd this year? Like they need their pick protected, meanwhile the A's and Twins are handcuffed because they finish in the top half of the league.

 

My system would be based on the end of the year payrolls. I would also keep the tiers of FAs as they are now, but probably eliminate the Class C FA pool, if it hasnt been already. The rules would be as follows.

 

TIER 1 TEAMS - Teams finishing the year in the bottom third of the league in payroll (21-30) can sign any free agent they want without losing ANY draft picks. Once they sign the free agent, the team that loses the player, if they are in the bottom two thirds of the league in payroll (11-30), will receive 1 pick in the sandwhich round between rounds 1 and 2 if the player is a type A player. If the player is a type B player, the team losing the player is awarded a sandwhich pick between rounds 2 and 3. if the player is from a TIER 3 TEAM, that team will receive no compensation.

 

TIER 2 TEAMS - Teams finishing the season in the middle third of the league in payroll (11-20) cannot lose their first round draft pick if they sign a free agent. They can lose a 2nd round pick, or 3rd, down the line depending on how many FAs they sign. The team losing the free agent to a team in this TIER 2 would be compensated as follows:

TIER 1 and TIER 2 TEAMS losing a Type A free agent would receive two picks, one pick in the sandwhich round between rounds 1 and 2 and the 2nd round pick of the signing team. Tier 1 and Tier 2 teams losing a Type B Free Agent would receive a sandwhich pick in between rounds 2.

 

TIER 3 TEAMS - Teams finishing the year in the top third of the league (1-10 in payroll) CANNOT receive draft compensation for ANY lost Free Agents. They would also LOSE their first round draft choice if they signed a TYPE A free agent, and their second round draft choice if they signed a TYPE B free agent, etc. etc.

 

I have other ideas that go into more detail, such as, if a TIER 3 teams signs multiple FAs, the team losing the FAs would receive two sandwhich picks, one in between rounds 1 and 2, one in between 2 and 3, if the pick from the TIER 3 team would be in the third round or later, etc. etc.

 

Now, one might say that you are awarding a team that is being cheap, and penalizing the team that is spending money. This is not true. What you are doing is giving the small market team incentive to sign players away from the larger market teams without losing their bread and butter (i.e. draft picks to build for the future) meanwhile, teams like the Angels and Yankees are not going to STOP signing players to insane deals simply because they dont get as much, or any, draft compensation. Those teams are not at all about the draft, never have been. They rely more on international scouting in the Domincan Republic, Japan, Venezuela, etc.

 

Ok, tear it apart...

[DHonks]

I tend to think that baseball should shift their plan to net gains and losses. I'd rather have a committee comprised of representatives from the Union and MLB which would name the supplemental picks, more like how the NFL does. Adding picks is nice, but perhaps they should be adding picks after rounds 2, 3, 4, and 5, so that all teams can afford to take the players they desire, not the affordable players.

 

I hate how a team can lose 3 free agents, but add three free agents, and the end result is that they upgrade their draft picks..

[RyDogg66]

That is what the above system is to prevent. The teams that are adding 2-3 Type A or B free agents each year as well as losing 2-3 are mostly high payroll teams. This system prevents them from getting a lot of comp picks and other teams picks.

[colbyjack]

Nothing there to tear apart RyDogg, you obviously have put a lot thought into this.

 

I have thrown out some ideas as well in the past to help the little guys while trying not to help the rich get richer. However I do want to point out that the Brewers have re-stocked their farm system without any extra picks (actually without their 2nd rounder in 2000, 2005 and this coming year) and without any help in the international free agent market. So, it can be done under the current system.

 

While I have tried to figure out a system that doesn't blatantly help the teams that cry poor, my latest thoughts center around removing draft pick compensation altogether, at least getting rid of the idea that any team loses a draft pick for signing a free agent. Instead, teams would only get compensation picks.

 

And I think those compensation picks should be awarded based on free agents signed by the same team, similar to how the NFL awards compensation picks, and you can use the Elias rankings to help determine what picks a team gets.

 

For instance, if the Yankees were to lose Mike Mussina and sign Johan Santana, they would not gain a compensation pick for losing Mussina.

 

If the Royals were to sign a Type A free agent and lose Type B free agents, they may get a compensation pick after the second round. If a team simply loses a Type A free agent and doesn't sign any Type A or B free agents, then they get a compensation pick after round one and two. A Type B free agent lost gets a compensation pick after round one (assuming the team that loses such a player doesn't sign any other free agents).

 

I think before MLB gets more creative with the compensation picks they will do away with the process completely. We were lucky to see as many changes implemented to the draft with the last CBA as we were.

[Oldcity]

I love this topic. Your post was well-thought out Rydogg, but I'm not sure you can base it on payroll, as payroll doesn't always correlate to winning. The tiers might be better if they were best on record the previous season rather than payroll.

[RyDogg66]

No Stevo, it has to be based on payroll, not winning %. Why should the A's or Twins get penalized if they finish with the best record in baseball, when they are spending the least amount of money?

 

Why should the Cubs be awarded for being awful AND spending a lot of money?

 

Reread the reasons for basing it on payroll. If the bottom teams in payroll CANNOT lose draft picks by signing free agents, they might be more willing to sign a free agent or two.

 

The system will also prevent teams like Boston and New York from getting boat loads of comp picks for letting an otherwise useless FA to them, who may just squeeze in the TYPE A category and getting picks for him.

[mtk52983]

If your concern is that the compensatory pick formula has devolved into a viscious cycle where the same teams consistently receive picks to the detriment of other teams, I do not see how the proposal will change that. All that will change will be which teams consistently get more picks. If a team builds through the draft (using some of the draftees for themselves and trade others for established players to fill out the team) they will not have to target FA's and in the meantime will have a low enough salary where they consistently get extra picks. The rich teams, without the draft picks to replenish their team after another player leaves will be forced to spend more money on Free Agents, and thus driving up their payroll, which will result in fewer picks and the cycle repeats itself.

 

A better solution would be to classify all FA's as A, B, or C without regard to whether they are offered arbitration. If a team loses an A FA they get a pick after Round 1, a B gets a pick after Round 2, and a C gets a pick after Round 3. In addition teams will still lose picks for signing a Type A FA but the round in which it will start will be changed so that if you pick in the Top 10 you cannot lose any pick in the first two rounds, if you are in the Top 20 you cannot lose your first round pick, and if you pick from 21-30 your 1st round pick is not protected

[GagneCY03]

I understand the desire to balance out free agent compensation but I dont think Tier 3 teams should be "punished." I'd like a system where no one loses picks.

 

CJ, you remember when you and I discussed a compensation system based off of the one the NFL uses? Like you said, MLB would probably do away with the current system first but I'd love to see compensatory picks assigned based off of free agents lost / acquired. Of course, Elias would have to revamp their outdated rating system.

[bsb8532]

Maybe my Astros should have proposed one of these plans before screwing the metaphorical pooch this past offseason. I still can't figure out why we didn't offer Pettitte or Clemens arbitration. However, it seems arbitrary to me that we essentially gain Carlos Lee and Woody Williams and lose Pettitte and Clemens and the net result is we don't get a draft pick until the 100's. I'd much rather have Pettitte and Clemens even without the draft picks, moretheless with them.

 

But I also have to blaim our management for poorly handling the situation. We wanted to get Pettitte a one year deal anyways and his arbitration would not likely have been much more than we offered ($13 million). As far as Clemens, we would have given him $35 million if he would have come back.