AS CBA Expires, Solutions for MLB International Draft & Free Agent Compensation
As we awake this morning on the final day of the current CBA between MLB owners and the MLBPA, it is clear that the two sides are having a harder time hammering out specifics than they have had since just missing an August 30, 2002 strike. The factors behind this based on reporting are well known, dealing with how the draft compensation is dealt with tied to the current qualifying offers and the goal of an international draft. one can see both sides of these issues and after giving this a lot of thought the last few days, here is an approach to consider.
Some will argue that the draft is necessary to keep all the players that have the most talent from going to just a few teams. Certain cities and teams are always going to be more of a draw for more players than others are, that is a fact of life. So it is reasonable that MLB would want some sort of system in place that gives every team in every market the opportunity to have its own exclusive period of contract negotiations with certain players. The draft of course accomplishes this and to that end, I am very much for a draft system for all players, including internationals from every nation. I am however also sensitive to the fact that the draft does not necessarily reward players based on performance and compensation that would otherwise be handed out in a pure free market system. The rub of course for the players is that with the hard slotting in the draft, it takes away a lot of the negotiation of the salary between player and ball club. I won’t spend a lot of time on the joke that is the current international process. From the viewpoint of the fan and probably the owners too though, it is crazy to give unproven kids massive bonus money who may never see a single pitch in the big leagues, they should earn the big salaries after demonstrating their ability through the apprenticeship that is the minor leagues.
Some argue why have an international draft, just give every team a set pool of dollars that they cannot go over without facing a severe penalty, with every team having the exact same amount of money. Some would argue, why not take that same approach with the draft in general, or just deal with all of the amateur talent in such a way. This in theory is closer to free market and what the players would prefer, while limiting the ability of the Dodgers, Yankees and Red Sox of the world from stashing all the great players in their system. What I am going to try and propose will combine that theory with a modified draft system and all players will be drafted under the same rules globally. The difference will be based on player age and experience as I will now outline.
To start, I propose a change in how the draft is organized. Rather than rewarding losing teams and penalizing those who are successful, let’s have a known and set order for the draft every year. While we have a 30 team MLB, teams would be divided into groups of 5 segments and each year, you would draft within a different segment. Segment 1 is picks 1-6, segment 2 is picks 7-12, going on down to segment 5 which is picks 25-30. Each year, you would have a pick within a different segment of the draft, no matter how bad or good your regular season had been the prior year. Each year, you would get a different pick within the order of the segment you draft in as well, so that over time, everyone has the number one pick. For the next thirty years, a given club might have these draft pick positions in every round under this system. Years 1-5, picks 2, 9, 16, 23, 30. Years 6-10, picks 3, 10, 17, 24, 25. Years 11-15, picks 4, 11, 18, 19, 26. Years 16-20, picks 5, 12, 13, 20, 27. Years 21-25, picks 6, 7, 14, 21, 28. Finally Years 26-30, picks 1, 8, 15, 22, and 29. If MLB expands to 32, the groups of 5 segments would be moved to 4 and so a slight adjustment of the process would be required, with teams drafting within a different segment of the draft each year as before. Teams would not lose a draft pick for signing a free agent, teams that make a one year qualifying offer to a player should he reject the offer would receive a compensation pick following the second round. The order of those compensation picks will be based on the dollar amount their former player signed for, with the order going from highest to lowest. Compensation picks can be included as part of a trade no later than 72 hours prior to the date of the draft. Compensation picks are only awarded if the player signs with another team.
All amateur players are draft eligible as are professionals from foreign leagues who have never signed a uniform players contract with MLB. The key here is how those players can be dealt with. All teams get a bonus pool of 25 million dollars in the first year of my proposal. It could be slightly increased each year tied to an inflation index, CPI, etc. Each club can spend however much of that bonus pool money it wants on a given player with a capped value based on the player age and experience. How the professional contract is dealt with would also depend on the prior experience, which is a key point concerning older international players. The values would not be slotted based on the position of the drafted player, so while better players are likely going to be taken early, if a team wanted to spend more on its second or third pic than on the first pick it had, that would be perfectly acceptable with this system.
The signing bonus portions of contracts would be set to a floor value of no less than 45 thousand and no higher than 5 million, no matter the age of the player. All players who had not attended college including all international players would also be given 100 thousand dollars specifically set to a college fund that would be used for education at any American, or Canadian college/university, or applied toward similar educational and training programs within their home nation if they chose that option. The dollar amount would reduce by 25K for each year of college experience previously obtained by a drafted player, 75K for a player drafted after the freshman year, 50K after the sophomore year, Etc. Drafted college seniors who don’t have the option of returning to school if they don’t sign a pro contract would be offered 60K in college funds for attending graduate school. It would be optional for the player unlike the undergraduate funds, so if the player did not wish to receive such money for additional education, that money would be added to the minimum salary floor on top of the 45K minimum already in place. This in one way rewards the player who stays in college to finish a degree.
All players with no prior professional experience would get a base salary tied to a minor league contract. The contract dollar amounts would increase by 10% from current minor league values across all classifications above rookie levels, with the rookie levels increasing by 13.5%. Professionals age 23 and above who come from foreign leagues would be treated a bit differently. A team drafting the rights to such a player would have the option of offering the bonus with the minor league contract, or signing the player to an MLB deal and the player would have the right to negotiate the type of contract he would wish to have. If the player had 2 or fewer years at the top level of the foreign league in which the player was participating, the player would get two years at the major league minimum salary and then be able to have four years of arbitration or the club could sign the player through those arbitration years in the way Houston did with John Singleton. Players with 3 or more years as a pro at the top level in a foreign league would be allowed to sign for as much as the average salary for a player based on experience. So the draft rights to a pro with 5 years’ experience would set his salary to a starting point equal to that of a sixth year player in MLB with averages increasing each year based on the rates for seven, eight, nine, years and beyond. Finally, players age 23-26 would still have six years of rights belonging to the drafting club or any team that then obtained those rights later on via a trade. The number of years those rights are retained then decreases by one for each year from age 27 and above. Thus if a 29 year-old was drafted, that six year period would have been reduced to three, unless the player signs a contract that extends beyond three years. For players 31 years or older, this means the rights would have expired at the end of any contract since a player at age 30 when drafted would have just two years of such club retainment rights. Player age would be tied to his age in calendar years on March 31 every year,.
Draft rights to all amateurs would expire 45 days after the draft if the player was unsigned and the player would be reentered immediately for the next draft upon the lack of such a signing. If a team failed to sign such a player, they would get a compensation pick at the end of the draft segment from which the player was drafted. So if a player was taken by a team with the 16th pick in segment three using our 30 team five segment system, the compensation pick would be slotted as pick 18B between picks 18-19 of the following draft, or at the end of that draft segment. Such compensation would last for one year rather than two when tied to a given pick but the compensation would extend through round 5, rather than through round 3 as it does now. Any amateur who runs out of college eligibility who does not sign during the signing window would be required to be redrafted one time after losing college eligibility, at which point failure to sign leaves such a player as a free agent. Should this happen, the player would be allowed to sign for no more than a minor league contract with a bonus of 45K.
International draft rights to professionals in other leagues would be retained for up to four years, expiring if the player did not sign with the club during that period. Such rights would be retained for three years for players ages 27-28, two years for those ages 29-30, one year for all 31 or older. Players would have to reenter the draft process if they fail to sign, with all reentry international professionals retainment rights lasting for one year. If the player does not sign after being drafted a second time, he is a free agent but he would only be able to sign for the minimum salary offered to a player with his total number of years and experience, minimum 4 million dollars. Draft rights to international professionals who have not signed a uniform player contract with MLB can be included as part of a trade at the conclusion of the world Series, in keeping with the rule that allows signed amateurs to be traded in a similar manner.
IN summary, the approach outlined here would solve several current problems. All players who have no previous pro experience would enter the minor league systems under the same rules. Players would have protection for the future so if and when baseball didn’t work out, they would have access to the funds to obtain an education and move into another career, something that is especially lacking for the international players from Latin America. The system ends the practice of signing players for chump change and takes away the incentive of losing at the big league level. It creates a uniform system for obtaining and signing professionals from nations like Korea, Cuba, Japan, and elsewhere that currently all operate under slightly different rules, with an NBA approach in some ways when it comes to foreign talent. Finally, this rewards players who have been successful in MLB, preventing clubs from going for the cheap with their major league team and spending massive amounts of dollars on amateur international players and fees paid to the Office of the Commissioner of Baseball.