Even in peace, MLB finds a way to get bruised. Instead of focusing on the unprecedented 21 years of labor peace that will result from yesterday’s new collective bargaining agreement (CBA), the focus of many, if not most, has been on elements of the deal they don’t like. Interestingly, the strongest objections have been for items like draft slotting and expanded playoffs, which just so happen to be heralded in other sports. In some ways, that’s unfair, but baseball has always been held to a higher standard (see steroids) because it is the National Pastime.
We are headed for massive problems in the next CBA. Competitive balance is going to get progressively worse.” – Anonymous GM, quoted by Ken Rosenthal, November 23, 2011
The most repeated criticism of the new CBA is it has the potential to dampen competitive balance by restricting the amount of money that small market teams can spend in the draft and international free agent market. Because teams like the Royals, Pirates, Royals, and Padres have become the most prolific spenders in the draft, the theory goes, curtailing the amount of money spent will limit their ability to be competitive. However, there is a flaw to this logic. The reason those teams have spent more is twofold: they have amassed more picks and bonus payouts at the top of the draft have been increasing exponentially.
Top-10 Spenders in the Rule IV Draft, 2007-2011
In the Pittsburgh Tribune-Review, Dejan Kovacevic decried the new CBA because it “sticks it to the Pirates”. As Kovacevic points out, if the Pirates spent $17 million in the 2012 draft, as they did last year, the team would now be subject to harsh penalties. As a result, he concludes the new CBA is an unfair arrangement designed to benefit large market teams at the expense of the lowly Pirates. Of course, that notion is absurd. If there is an aggrieved party, it’s the players, who could have their leverage reduced even further. Not only aren’t small market teams being victimized, but there’s every reason to believe the bonus pool policy was implemented on their behalf.
The new CBA was not designed to trample the Pirates’ hopes of building through the draft. More likely, it was designed by them to help control costs. After all, the reason the Pirates spent so much last year is because they were compelled to give Gerrit Cole a record bonus of $8 million. Had the new system been in place, it’s likely Pittsburgh would have still wound up with Cole, but at a much reduced price. Why? Because under the new system no team could pay him more, and the further he dropped, the chances of another club being willing to overpay would lessen because of the penalties. With early round bonuses continuing to spiral, it seems more likely the Pirates of the world would have been priced out of top talent under the old system than constrained by the new one.
When you start to delve deeper into the framework, the new CBA looks more and more like a fair comprise, at least with regard to the Rule IV draft. The international free agency rules, however, do not appear as equitable, especially if the initial reports of $2.9 million budgets are correct. For many teams, that allotment wouldn’t cover one player, so it’s hard to imagine how they’ll be able to stretch it over an entire year’s signing period. One solution to that problem could be a provision that allows teams to transfer their budgetary allotment, creating a “cap and trade” like system. Considering that many teams spend little, if anything, on international free agents, the ability to transfer the approximately $100 million in allotted funds could mitigate what, at first glance, seem like onerous restrictions.
One final point being made about the international free agency rules, as well as the push for an international amateur draft, is the potential chilling effect it could have on the talent pool. Although I have often advocated that position, and still believe it to be valid, it’s worth pointing out that baseball can still control that issue. Even with the restrictions, the relatively higher salaries, longevity, and guaranteed contracts (not to mention the lesser risk to health) promised by a baseball career are still very appealing. On its own, lowering signing bonuses shouldn’t drastically shrink the talent pool, especially when you consider most international amateurs do not sign for the Aroldis Chapman like bonuses that seem to be the target of the new CBA. If baseball continues to foster a policy of investing in foreign markets, both in terms of funding amateur academies and marketing interest in the professional game, baseball’s appeal to athletes in these countries should remain strong. However, on this issue, Bud Selig, and any future commissioner, must be vigilant. If he notices a waning investment, Selig shouldn’t hesitate to act in the best interest of the game.
Knee jerk reactions to complex issues are perfectly understandable, especially in this day and age of advanced media and instant communications. However, only after all of the details are revealed and the first implementation of the new rules are evaluated, can a more informed assessment of the new CBA be made. In the meantime, baseball fans should be happy to have a CBA to debate. Followers of the NBA wish they were so lucky.