Friday, November 17, 2006

"You know, you're actually quite sexy..."

This is almost a month old, but we barely touched on it: MLB and MLBPA announced a new CBA for the next five years, with surprisingly little trouble. I guess when the owners are consigned to higher salaries, and the players are consigned to drug tests, they don't have too much to argue about. And everyone's a winner - millionaires AND billionaires alike! The luxury tax continues, but the thresholds keep increasing, up to $178M in 2011 (an increase of $40M over this year). Minimum salaries go up also, to $400,000 in 2009 for major leaguers and $65,000 in 2009 for minor leaguers (I think the era of minor league players "struggling to make ends meet" is officially over). But what's most interesting to me is the new draft compensation rules: it looks like those are being slowly phased out....
1. Type C free agents eliminated in 2006
2. Also in 2006, compensation for type B players becomes indirect (sandwich pick) as opposed to direct compensation from signing Club.
3. Effective 2007, Type A players limited to top 20 percent of each position (down from 30 percent) and Type B players become 21 percent - 40 percent at each position (rather than 31 percent - 50 percent).
This really might change the dynamics of free agency. I like the idea of compensation picks; I have no data to back this up but I think it's a much more effective way to achieve parity than revenue sharing or the luxury tax. These changes certainly benefits teams who love free agents (Yankees), but they seem to be pretty devastating for teams which rely on young players with relatively small salaries (A's). For the Sox it seems to be a pretty mixed bag - on one hand, they certainly rely on free agents...but on the other hand, as X has pointed out more than once, compensation picks seem to be a pretty important part of the FO's plan for building a strong farm system. Not sure I like this change...


  1. I don't think it will have that much of an impact. There will still be compensation for top, top players. Type C picks "only" netted a second round supplemental pick - in the last draft these were for players like Scott Elarton and Abraham Nunez. Very few of these types of players resulted in draft compensation because their teams did not off them salary arbitration since they are basically replacement level players.
    Type A and Type B will shift down the quality scale a bit, but I don't think it will really change the dynamics of FA that much - it may change some behavior at the deadline. The guys at the lower end of the buckets would not really draw much attention at the deadline. But the A's will still get very good compensation for Zito.

    In fact the A's and Nats may not have moved Zito and Soriano because there was a lot of discussion about eliminating compensation all together. But that change never came about.

    The two changes that are probably to have a larger effect, although maybe not as visible, are the changes to the draft. I don't have the exact details handy, but basically it requires all draft picks be signed by (I think) August 15th - no more of this game that if a player goes to a class, they are then not eligible. A firm deadline should help clubs with take it or leave it offers. That will become even more effective since a team NOT signing a draft pick will get compensation in the form of a pick in the following draft one pick behind the slot where they picked that player (applies to the first three rounds only). It could encourage smaller market teams to take a bit more of a chance on players with signability issues. And there are also some changes to the draft and follow players - typically JuCo guys, but they do make up a lot of the draftees - we may see the draft go from its current 60+ rounds down to something like 30-40.

    And one other big change, although not as visible - teams have an extra year now to protect players before they are eligible for the Rule 5 draft. Effectively giving teams one additional year before having to protect and then promote a player.

    But on the whole, I expect it to be business as usual. No cap or slotting (Like the NBA guaranteed contracts for first rounders), no international draft.

    Oh and one additional thing – following up from yesterday and the post/comment on recent collusion. The union did file a complaint in (I think 2003) and part of the new CBS was that the league would pay a small settlement – something like $20 Million – to about 40 or so FA that were affected by this. I have seen very few details about this, but I think it relates to one winter when all FA offers were run through the commish’s office and a number of mid level FA received identical offers from every club they spoke with.

  2. I guess what I'm worrying about is if they're moving towards phasing out the compensation picks entirely, like in the next CBA. That would be unfortunate, in my opinion.

    And what do you have against Nunez and Elarton? Those are two of my all-time favorite players. Elarton made $4M this year, so he must be good.

  3. Yeah, he's better than Pavano who made $10MM.

    I think they could make some really radical changes - like an international draft. Or even things like allowing teams to trade draft picks. Those might change things a bit.

    One of the flaws with the compensation was/is that it doesn't really achieve its goal in at least half the cases. The sox signed renteria in 05 and lost their first pick, but they lost O-Cab, so they got the Angels first pick (which was higher than theirs) and a supplemental pick.