Baseball's Financial System and another strike/lockout...

[clancyphile]

With the Grandal signing, some folks have talked about a possible strike or lockout.

 

The fact is, there are a number of conflicts.

 

Players want to be able to cash in on their success at the major league level. Small-market teams, though, need to be able to develop new players.

 

I think they should up the salaries for minor-league players: For Rookie-level, it should be $60,000 a year. A-level, $90,000. A+, $120,000. AA, $180,000. AAA, $240,000.

 

In exchange for the bigger salaries, there would be a change in player control: Prior to being eligible for the Rule 5 draft, a high-school draftee or someone signed as an international amateur free agent will have five years of team control. A community college draftee has four years, a college draftee has three. After that, there will be an additional three years of Rule 5 eligibility before the players become minor-league free agents.

 

Minor-league players will also have the right to sign multi-year deals with teams, and they can be protected from the Rule 5 draft for half the length of the deal.

 

I'd make some changes to the draft: First of all, the DFE process would come back as the deadline would move to May 31 to sign a player. Second, a pick in the first ten rounds who doesn't sign results in a comp pick as currently handled. Third, the competitive bonus round will change: There would be two rounds. but each team eligible for the CB picks would draft in each round. The only difference is the order flips. So, if Milwaukee drafted second in CB-A, they'd draft ninth in CB-B. Also, all draft picks could be traded, but only for two years down the road - so Milwaukee might move Eric Thames, and maybe get a second-round pick in 2019 and 2020.

 

Free-agent compensation would also change, in one sense going back to the past when a team can get compensation by simply offering arbitration. But the way it would change is that instead of a team giving up a pick, the compensation would work as follows:

* For a contract above $60 million, the team losing a free agent gets a pick before the pick of the team that signed the free agent in the first round, and "sandwich picks" between the CB-A and 2nd round and CB-B and the 3rd round.

* For a contract between $30 million and $60 million, the team losing a free agent gets a pick before the pick of the team that signed the free agent in the second round, and "sandwich picks" between the CB-A and 2nd round and CB-B and the 3rd round.

* For a contract between $15 million and $30 million, the team losing a free agent gets a pick before the pick of the team that signed the free agent in the third round and "sandwich picks" between the CB-A and 2nd round and CB-B and the 3rd round.

* For a contract below $15 million, the team losing a free agent gets "sandwich picks" between the CB-A and 2nd round and CB-B and the 3rd round.

 

Players would have three years of team control, and three years of arbitration. The minimum major-league salary would be bumped up to $750,000 a year. There will be more revenue sharing, with teams eligible for a CB pick getting 25% more revenue than those who aren't.

[Eye Black]

Just to clarify, any potential work stoppage wouldn’t occur until after the 2021 season when the current collective bargaining agreement expires.

[xisxisxis]

MLB, NFL, NHL, and NBA all have about 50% of revenues going to player salaries. Any posturing about the FA market is THAT, posturing. The Agents want more money. No need to change anything.

 

It would help if the media wasn't in the pocket of the agents (mlb.com is no longer owned by MLB). Do you think "The Athletic" and other sources aren't doing quid pro quo with the agents for leaking info to them? I'm sure Ken Rosenthal has deals with all the agents/agencies that for early access to info he will beat the drum about players getting stiffed by Billionaire owners. Except when you look at the data it is right in line with all other major sports.

 

Don't buy the propaganda from the agents/their mouthpieces...

[clancyphile]

Just to clarify, any potential work stoppage wouldn’t occur until after the 2021 season when the current collective bargaining agreement expires.

 

True. But I just was throwing some ideas out there...

[jerichoholicninja]

From the player's side, I don't know what they have to complain about. They wanted a system that rewarded veteran players simply for being veteran players and that's what they've gotten and still more or less have. The QO does screw some guys over but we're talking less than 1% of players. Seems silly for them to strike over something that affects less than 1% of their members. Certainly the biggest area is players getting paid more while under team control, which they certainly should, and better pay for minor leaguers (who aren't even union members). But that will take money away from those old guys at the end of their careers. As much as we'd like to think the union would want to help out the young guys, recent history has proven otherwise. If I was a player in my 30's, I would have no interest in changing the system so that it would take away millions of dollars of my future earnings.

[Thurston Fluff]

Just to clarify, any potential work stoppage wouldn’t occur until after the 2021 season when the current collective bargaining agreement expires.

 

Can't MLB lockout the players any time?

[BuckyBrewer61]

Seems to me, for years teams were shelling out huge, long, and terrible deals (A-Rod, Pujols, Giancarlo, Heyward, Fielder...the list is long). Even if the player performed reasonably well, it was a huge albatross to the team on the hook. But it was the going rate, so if you wanted a star free agent you had to pay up in both years and money. Those deals were hugely in favor of the players and agents.

 

Now in the age of analytics, teams and GMs have wised up. Maybe it will happen, but I'd be surprised if Machado or Harper pull in the 10+ years, $300m+ they are likely looking for. It just doesn't make sense, and it never really did. But it was the norm for years, so those players and agents are holding out for their big payday, delaying the free agency market, and complaining that there's some conspiracy because teams don't want to hand out high-risk, low-reward contracts.

 

There's plenty of money still being paid to the players, they just can't have it all in one huge guaranteed lifetime contract anymore. And that's not unreasonable.

 

If I'm a player just recently drafted, my biggest beef is the 6 years of non-negotiable team control and low pay before hitting arbitration. As a Brewers fan I obviously don't want that to go away, but for example Travis Shaw's salary last year probably wasn't quite fair, especially if teams aren't going to pay out once he hits free agency either.

[KeithStone53151]

If I'm a player just recently drafted, my biggest beef is the 6 years of non-negotiable team control and low pay before hitting arbitration. As a Brewers fan I obviously don't want that to go away, but for example Travis Shaw's salary last year probably wasn't quite fair, especially if teams aren't going to pay out once he hits free agency either.

 

I can completely understand why GM's don't want to give massive awful contracts to top players. But this is the sticking point. All these top players are severely underpaid during their prime/best years, and the primary reason for this is competitive balance. So teams like the Brewers have a chance. I can't think of a good way to protect the players from more savvy GM's and keep a level playing field that doesn't involve a drastic increase in revenue sharing...along with salary caps/floors.

[Baldkin]

MLB, NFL, NHL, and NBA all have about 50% of revenues going to player salaries. Any posturing about the FA market is THAT, posturing. The Agents want more money. No need to change anything.

 

It would help if the media wasn't in the pocket of the agents (mlb.com is no longer owned by MLB). Do you think "The Athletic" and other sources aren't doing quid pro quo with the agents for leaking info to them? I'm sure Ken Rosenthal has deals with all the agents/agencies that for early access to info he will beat the drum about players getting stiffed by Billionaire owners. Except when you look at the data it is right in line with all other major sports.

 

Don't buy the propaganda from the agents/their mouthpieces...

 

Well, this isn't true. Don't buy the propaganda from anti-union billionaires.

 

MLB player salaries as a percentage of Revenue have plummeted between 2002 and 2008 and are hovering just below 40% currently.

 

That's a BILLION dollars the players were shorted in salaries this season.

 

https://deadspin.com/the-mlbpa-is-failing-its-players-1822305159

[KeithStone53151]

MLB, NFL, NHL, and NBA all have about 50% of revenues going to player salaries. Any posturing about the FA market is THAT, posturing. The Agents want more money. No need to change anything.

 

It would help if the media wasn't in the pocket of the agents (mlb.com is no longer owned by MLB). Do you think "The Athletic" and other sources aren't doing quid pro quo with the agents for leaking info to them? I'm sure Ken Rosenthal has deals with all the agents/agencies that for early access to info he will beat the drum about players getting stiffed by Billionaire owners. Except when you look at the data it is right in line with all other major sports.

 

Don't buy the propaganda from the agents/their mouthpieces...

 

Well, this isn't true. Don't buy the propaganda from anti-union billionaires.

 

MLB player salaries as a percentage of Revenue have plummeted between 2002 and 2008 and are hovering just below 40% currently.

 

That's a BILLION dollars the players were shorted in salaries this season.

 

https://deadspin.com/the-mlbpa-is-failing-its-players-1822305159

 

It actually seems to have remained pretty steady between 2008 and 2018 based on the evidence you presented...swinging no more than 1-2% from the midpoint. There have been labor negotiations since 2008 without major issues. And saying the players were shorted that amount of money is incredibly entitled and dramatic...and that's me putting it as nicely as I can.

[xisxisxis]

deadspin.com?

 

I don't even need to respond...

[NeedMoreFans]

I haven't seen this posted (maybe I missed it?), and I think it fits this discussion.

 

https://fivethirtyeight.com/features/good-mlb-teams-oppose-income-inequality/

 

I found this to be an interesting article but it also shows what an advantage having a high ceiling for payroll can be in that a team with a high ceiling can afford a lot of higher contracts. But, it also shows why teams are being more careful in not signing long-term contracts for veterans.

[homer]

Before the 2015 season, Russell Martin signed a 5 year $82 million contract with the Blue Jays. He was two years older than Grandal is now.

Before the 2014 season, Brian McCann (same age as Grandal now) signed a five year deal with the Yankees for $85 million.

 

The landscape has changed.

[JosephC]

I think they should up the salaries for minor-league players: For Rookie-level, it should be $60,000 a year. A-level, $90,000. A+, $120,000. AA, $180,000. AAA, $240,000.

 

 

Add up the numbers to see how much money this totals and you will immediate recognize how questionable this is. 60k for a rookie league ballplayer who participates in something like 55 games during a rookie league season?

[KeithStone53151]

Before the 2015 season, Russell Martin signed a 5 year $82 million contract with the Blue Jays. He was two years older than Grandal is now.

Before the 2014 season, Brian McCann (same age as Grandal now) signed a five year deal with the Yankees for $85 million.

 

The landscape has changed.

 

That's the whole GMs getting smarter thing. 32 year old catchers aren't worth 5/80. Trick is to find a way to pay players more in their more productive years while maintaining competitive balance.

[Cool Hand Lucroy]

The problem right now is the Catch-22 players are in. Teams have set up a little bit of a black box in that players can be underpaid for three years (and I get that no one is crying for millionaires, but we should remember that lots of guys are underpaid relative to market and also not forget that minor leaguers are basically working stiffs like us), granted no long-term security in arb, and then told they are too old to expect a massive contract. That, I think, is a problem. The solution has to be something along the lines of what clancy proposed, with salaries driven by production and service time in more equal measure. Right now, it is way skewed toward the latter.

 

As Brewer fans, I think we are going to have the face the possibility of having to choose between a CBA that fixes these issues but makes the situation less equitable from a competitive standpoint (eliminating the QO, reducing the team control window, etc.) or a work stoppage. I hope not, but that is my fear.

 

If I am the MLBPA, I start with either trying to double the league minimum or reduce arby to one year. I think that makes sense given the situation, but it means Stearns and co. will really have to adapt.

[homer]

Before the 2015 season, Russell Martin signed a 5 year $82 million contract with the Blue Jays. He was two years older than Grandal is now.

Before the 2014 season, Brian McCann (same age as Grandal now) signed a five year deal with the Yankees for $85 million.

 

The landscape has changed.

 

That's the whole GMs getting smarter thing. 32 year old catchers aren't worth 5/80. Trick is to find a way to pay players more in their more productive years while maintaining competitive balance.

 

Doesn't change the fact that the landscape has changed. If that's because of GM's then so be it.

[reillymcshane]

One thing you could look at is limiting length of contracts.

 

My thought is that if you limited contract lengths - let's say for five years as an example - it would make more money available to productive players. The money that the Angels still owe in Pujols or the Tigers to Miggy is pretty staggering. If a walker-wielding Albert Pujols wasn't sucking up $30M of the Angels salary, they could direct that cash at other players.

 

This affects the superstar players most - so I'm sure it would be hated by agents and the top tier players.

 

This is just one of many things you could look at. Whether it would work as intended - I don't know. Just an idea.

[FVBrewerFan]

Well, we cant have this discussion without bringing up a salary cap so I will. I dont care about the owners, players, union, or agents. Im a fan of a small market team, along with millions of others. MLB needs a hard cap, and yes Im fine with a floor also. Even a high floor. Spit-balling here but say $90MM- $150MM. But wait, there's more. I would even allow a team to have one contract that goes over the cap. I could live with the 12-15 teams each paying a star a ton of money. Theres really not more than 12-15 superstars anyhow. If getting a cap meant the Yankees and Dodgers could still have that advantage, fine with me, at least it would be much closer to level.

 

Also, all players would need to go through the draft. 16 year olds from the DR, Japanese stars....all of them.

[Fear The Chorizo]

I think it benefits the game overall to have players reach free agency towards the front half of their prime years, not the latter half or even past them. Guaranteed contracts can stay, but if players are looking for higher AAV they need to be willing to take a reduction in overall contract length, or incorporate more team options with palatable buyout clauses for both sides. For example, Pujols' 10 year deal at ~$30M in AAV could have had a team or mutual option structure into it after 5 years, where if a team wanted to cut ties and regain a little flexibility they could buy Pujols out for $60 million - that would save the Angels ~$90 Million over the next 5 years and still have allowed Pujols to try and get a lesser deal with a different team around his age 35 season after getting a windfall payment worth 2 years' salary.

 

IMO, there definitely needs to be something done in terms of how long teams can control players before they reach free agency. The service clocks need to be reduced by at least 1 year, and concurrently I think they need to take a long look at adjusting how long teams can control prospects drafted out of college or signed at that early 20's age range in the minors before they need to be added to 40 man rosters. Would there need to be some sort of additional revenue sharing or salary cap ceiling/floor combination to make this work? Probably - and overall I think that would benefit the players and fan interest by keeping all 30 clubs at least in the mix to continually add payroll or restructure MLB rosters, even if they are in a rebuilding mode.

 

I also think that agents really should rethink advising their very best clients to take the full arbitration path in order to become an unrestricted FA as soon as possible - 6 years is a long time. If players were more willing to sign an extension-type deal at the start of their prime (typically near the beginning of salary arbitration) and buy out a few years of free agency, they are much more likely to make more money overall in their career. Braun is an example of that, and despite concerns around here for his declining productivity with his contract, he's not an albatross around the neck of the Brewers and he's done very well for himself. Mike Trout's current contract setup is another great example. Harper could be making Trout money right now had he and Boras tried to get an extension done with the Nats after his MVP season a few years ago, and he'd still be able to become an UFA if he wanted well before 30. Kris Bryant, same thing - now he's got potentially chronic shoulder problems that will likely prevent him from getting crazy money over a super long contract, and he's still got 3 full seasons before he reaches free agency.

 

The final side of this is if revenues are exploding and the FA playing field is shifting due to front offices leaning more on building from within and utilizing minor league depth, I think much more needs to be put in the pockets of minor leaguers - I'm not talking about just padding 1st round signing bonus slot amounts, I'm talking about significant pay and accommodations improvements across the board. If not significant pay increases in the minors, then perhaps the league minimum salaries need to be raised to give pre-arbitration players a bigger slice of the pie.

[wntrtxn21]

The problem right now is the Catch-22 players are in. Teams have set up a little bit of a black box in that players can be underpaid for three years (and I get that no one is crying for millionaires, but we should remember that lots of guys are underpaid relative to market and also not forget that minor leaguers are basically working stiffs like us), granted no long-term security in arb, and then told they are too old to expect a massive contract. That, I think, is a problem. The solution has to be something along the lines of what clancy proposed, with salaries driven by production and service time in more equal measure. Right now, it is way skewed toward the latter.

 

As Brewer fans, I think we are going to have the face the possibility of having to choose between a CBA that fixes these issues but makes the situation less equitable from a competitive standpoint (eliminating the QO, reducing the team control window, etc.) or a work stoppage. I hope not, but that is my fear.

 

If I am the MLBPA, I start with either trying to double the league minimum or reduce arby to one year. I think that makes sense given the situation, but it means Stearns and co. will really have to adapt.

 

Another work stoppage would kill baseball for the foreseeable future. Small market teams already suffer in the current system and any change would make it even more difficult to compete. Every study done on the problems in baseball has money as the #1 problem in competitiveness. Increasing the incentives for huge spenders would only further erode the system. You say Stearns would have to adapt. How? Small market teams would be driven out of the game.

[clancyphile]

I think it benefits the game overall to have players reach free agency towards the front half of their prime years, not the latter half or even past them. Guaranteed contracts can stay, but if players are looking for higher AAV they need to be willing to take a reduction in overall contract length, or incorporate more team options with palatable buyout clauses for both sides. For example, Pujols' 10 year deal at ~$30M in AAV could have had a team or mutual option structure into it after 5 years, where if a team wanted to cut ties and regain a little flexibility they could buy Pujols out for $60 million - that would save the Angels ~$90 Million over the next 5 years and still have allowed Pujols to try and get a lesser deal with a different team around his age 35 season after getting a windfall payment worth 2 years' salary.

 

The problem is... you need owners/GMs and players willing to work such deals out.

 

IMO, there definitely needs to be something done in terms of how long teams can control players before they reach free agency. The service clocks need to be reduced by at least 1 year, and concurrently I think they need to take a long look at adjusting how long teams can control prospects drafted out of college or signed at that early 20's age range in the minors before they need to be added to 40 man rosters. Would there need to be some sort of additional revenue sharing or salary cap ceiling/floor combination to make this work? Probably - and overall I think that would benefit the players and fan interest by keeping all 30 clubs at least in the mix to continually add payroll or restructure MLB rosters, even if they are in a rebuilding mode.

 

This is at the heart of the matter for teams like Milwaukee. Remember when the Crew was, for all intents and purposes, a farm team for big-market clubs?

 

I also think that agents really should rethink advising their very best clients to take the full arbitration path in order to become an unrestricted FA as soon as possible - 6 years is a long time. If players were more willing to sign an extension-type deal at the start of their prime (typically near the beginning of salary arbitration) and buy out a few years of free agency, they are much more likely to make more money overall in their career. Braun is an example of that, and despite concerns around here for his declining productivity with his contract, he's not an albatross around the neck of the Brewers and he's done very well for himself. Mike Trout's current contract setup is another great example. Harper could be making Trout money right now had he and Boras tried to get an extension done with the Nats after his MVP season a few years ago, and he'd still be able to become an UFA if he wanted well before 30. Kris Bryant, same thing - now he's got potentially chronic shoulder problems that will likely prevent him from getting crazy money over a super long contract, and he's still got 3 full seasons before he reaches free agency.

 

Again, you need owners/GMs, agents, and players willing to think things through.

 

The final side of this is if revenues are exploding and the FA playing field is shifting due to front offices leaning more on building from within and utilizing minor league depth, I think much more needs to be put in the pockets of minor leaguers - I'm not talking about just padding 1st round signing bonus slot amounts, I'm talking about significant pay and accommodations improvements across the board. If not significant pay increases in the minors, then perhaps the league minimum salaries need to be raised to give pre-arbitration players a bigger slice of the pie.

 

I think the answer may be all of the above. Up the slot amounts, especially in later rounds (say, to $250,000). Then do BOTH higher minor-league salaries and raising the league minimum.

[Point Beer Is Best]

I think they should up the salaries for minor-league players: For Rookie-level, it should be $60,000 a year. A-level, $90,000. A+, $120,000. AA, $180,000. AAA, $240,000.

 

 

Add up the numbers to see how much money this totals and you will immediate recognize how questionable this is. 60k for a rookie league ballplayer who participates in something like 55 games during a rookie league season?

 

Not only that, but those players aren't even represented by the union until they are added to a 40 man roster. What those players make is a travesty, but absolutely nothing will be done as part of the CBA for those players since neither party has any interest in redistributing wealth to non-union players.

 

The MLB union is weak, and was taken advantage of. They got suckered into agreeing to make the luxury tax more severe, at a lower overall number, and the owners (*wink* *nod*) are treating the luxury tax threshold much more like a hard salary cap.

 

The solution is so much more complex than the NFL where you have equitable revenue sharing, a hard salary cap (and floor), but also non-guaranteed contracts. MLB players are going to want to reach free agency sooner than they currently do, which the big market teams would have no issue with. Those teams are going to be able to dish out contracts to premier talent right in their prime, and pre-free agency players are much more likely to wait it out rather than sign team-friendly extensions. But where does that leave teams who are not on equal footing in terms of revenue? You HAVE to fix the revenue-sharing for that to work, while also forcing the owners to spend those dollars on payroll. Obviously the revenue-wealthy teams will hate the idea of subsidizing their competition.

 

But if the new CBA ends up being a situation where players reach free agency sooner without drastically redistributing revenue, how will small market teams compete? They can no longer rely on "controllable" players if players reach free agency in 3 or 4 years of service time as opposed to 6.

[pogokat]

To me, the problem isn't free agent compensation. i think the players are actually getting much closer to what their true value is on the open market than the drastically inflated salaries of the past. the problem is that the current cba makes it very profitable to keep players in the minors until the super two cutoff point causing players to have to play a whole extra season with their original team, as well as causing them to receive fewer dollars overall in arbitration. The simplest solution to all of this would be that any days in the majors in a given season would count as 1 full year towards arbitration, rather than the convoluted system that currently exists. Another solution could be completely eliminating pre arbitration years, putting all players into the arby process immediately upon arriving in the majors. The owners would never agree to all of that, but If I was the players union, I would focus on getting the younger players paid more so that and getting them to the majors faster, so that their eventual payday in free agency isn't the only way for them to get paid.

[KeithStone53151]

To me, the problem isn't free agent compensation. i think the players are actually getting much closer to what their true value is on the open market than the drastically inflated salaries of the past. the problem is that the current cba makes it very profitable to keep players in the minors until the super two cutoff point causing players to have to play a whole extra season with their original team, as well as causing them to receive fewer dollars overall in arbitration. The simplest solution to all of this would be that any days in the majors in a given season would count as 1 full year towards arbitration, rather than the convoluted system that currently exists. Another solution could be completely eliminating pre arbitration years, putting all players into the arby process immediately upon arriving in the majors. The owners would never agree to all of that, but If I was the players union, I would focus on getting the younger players paid more so that and getting them to the majors faster, so that their eventual payday in free agency isn't the only way for them to get paid.

 

This is generally detrimental to small market clubs. Trying to balance big market clubs, small market clubs, and players wants/desires is going to be extremely difficult. I think the right answer is basically the nfl model. Salary cap, salary floors, drastically increased revenue sharing, significantly decreased team control. Big markets would hate it, I can't imagine players would dislike it assuming the floors/caps guaranteed players what they considered a fair market share. If the floors were set at 42% of revenue and the caps around 50%...can't see how they could complain.