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First Pitch: Initial Look at the New CBA Shows It Mostly Hurts the Little Guys

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Major League Baseball announced a tentative deal tonight with the MLBPA on a new Collective Bargaining Agreement that would cover the 2017-2021 seasons. The deal still has to be ratified by both sides, and details are still coming in. My initial impression is that the deal benefits the big market players and the highest earners in the majors, while hurting small markets, and limiting funds for international amateurs. Here is the breakdown, along with how each change impacts the Pirates.

International Market

The owners were pushing for an international draft, but news came out earlier this week that they were backing off that requirement. Instead, each team will have a hard cap to spend on foreign-born players. Jayson Stark says that each team will have around $5 M to spend, and teams can’t exceed the cap.

This is a pretty big change from the previous system, where teams had loose restrictions on their bonus pools, and those bonus pools were based on their previous year’s standings. The restrictions in the past hurt small market teams more than the big market teams.

There are still plenty of details we probably need to pass judgement for this. This would limit international spending to $150 M, although I’m sure Japanese, Korean, and older Cuban players are excluded from these limits.

For the Pirates: I feel like this helps the Pirates, and small market teams. Prior to the last CBA, the Pirates had a budget of $3 M per year, and that didn’t include special expenses like Harold Ramirez or Luis Heredia. Most years, they were spending at least $3 M, and there were a few years where they were in the $4-6 M range. That changed with the last CBA, with the Pirates being limited to $2 M due to their success and the addition of bonus pools.

The Pirates have had success going after lower bonus guys. If those guys sign for an average of $100,000, then that $1 M lowered bonus meant ten fewer players per year, and 40 fewer players overall from 2013-2016. That greatly reduced their odds of finding breakout players. The new system will allow them to spend that $3 M budget again, plus give them extra room for a top signing when they find the right player. The previous CBA made that an either/or choice, where signing a guy for $1 M would take up half their bonus pool.

As far as the international players, I think this move hurts them, as it will prevent salaries from rising rapidly, and will lead to some of the top players getting less money, unless there’s a team that wants to spend their entire bonus pool on one player. As far as the Pirates and their usual approach, I think these rules help them.

Qualifying Offers

The rules for qualifying offers saw an adjustment, and I feel it’s worse for small market teams. First of all, a player can no longer receive a qualifying offer more than once. The team losing a free agent who received a qualifying offer would only get a pick if the player signed a contract of $50 M or more. The pick would depend on the team’s market size.

Penalties for signing players under a qualifying offer would also be determined by market size. A club that exceeds the luxury tax threshold would lose their second rounder, fifth rounder, and $1 M in international bonus money. Clubs who don’t exceed the threshold would lose a third rounder. The new rules would start in the 2017-18 off-season.

The other qualifying offer rules would remain the same. In order to qualify, a player must be on the team the entire season, and the amount of the offer is determined by the average of the top 125 salaries.

For the Pirates: As I noted, I feel this hurts small market teams more. It was already a tough decision to offer up a qualifying offer, since you’re offering a one-year deal that would guarantee at least $17 M, and maybe more in the future. But now, you’re not even guaranteed a pick.

Let’s say, for example, that Ivan Nova had been with the Pirates all year. They’d be able to offer him a qualifying offer in this scenario, which means they’d have to risk offering him a one year, $17 M deal. But if he ended up signing for three years and $36 M, or four years and $48 M, then the Pirates wouldn’t get a pick. So they’d risk the big one-year contract, and might not even get a pick from their risk.

This makes it less likely that teams would risk the qualifying offer, since there is less chance of a reward with fewer potential players eligible for compensation. Just for perspective, there were 14 players last off-season who received contracts of $50+ M. Only nine of those players would have been eligible for a qualifying offer, since the other five were traded mid-season.

The flip side to this is that the lowered draft picks makes it more likely that teams will spend on players who receive a qualifying offer. This might help small market teams a bit more, since they’d only be losing a third round pick, compared to a second, fifth, and $1 M in international spending from the big market side.

Ultimately, we’re talking about contracts of $50 M or more, and I don’t expect the Pirates to be bidding on too many of those. I think the biggest result here is that the big market teams will find the penalties lower to go after the top free agents, while the players won’t see their salaries restricted from the loss of a first round pick. Not to mention, they’ll have less risk of receiving an offer.

It seems in this case, the small market teams are receiving the short stick.

Schedule Changes

Starting in 2018, the season will begin a few days earlier, and will start mid-week. This will create additional off-days in the schedule. It will also expand the season to 187 days, from the current 183. I haven’t seen any mention of Super Two or service time changes, and those weren’t rumored to change. This means teams will need to hold players down a few extra days for Super Two or service time purposes. It’s probably not going to be a significant amount.

For the Pirates: Very little impact here, except it increases the chances of snow on Opening Day, since starting the season earlier in the north carries that risk.

Luxury Tax Changes

The luxury tax threshold will go from $189 M to $195 M next year, then will jump to $197 M in 2018, $206 M in 2019, $209 M in 2020, and $210 M in 2021.

For the Pirates: Obviously this doesn’t apply, although it does mean that big market teams will have extra money to spend before they start getting taxed. So that’s nice for the big markets, and for the players.

Summary

The good news here is that baseball will go on without an interruption. The bad news is that baseball will go on benefiting the big guys and putting the small guys at a disadvantage without interruption.

There were no major changes, but the small changes further make sure that the players can get more money, and that the big market teams can spend more and receive fewer penalties. The best thing for the small market teams is the adjustment to the international bonus pools, allowing for more spending, and capping the spending of every team.

That, however, is a small consolation when the flip side to this is that small markets are less likely to see compensation for their departing free agents, while also being less likely to land top free agents, since big markets will have more to spend, and fewer restrictions to sign those players.

The new deal also hurts international amateurs by capping their earnings, which continues the theme of the little guys losing the most while the big guys continue to gain. This deal just made it easier for the top free agents to get a few extra million, while the top international free agents will now find it more difficult to get one extra million.

We still haven’t heard anything about the draft, and there could be other changes made. But I don’t expect the small market teams to get anything big that would adjust the disadvantage they currently have in the game, and if they do, it would come at the expense of the US amateur players.

**Pirates are Actively Shopping Andrew McCutchen. We’ve known that they were listening to offers, but now they’ve moved to actively shopping him. I’d be surprised at this point if McCutchen is on the team in 2017.

**Pirates Sign Right-Handed Pitcher Jason Stoffel to Minor League Contract. They announced two signings today, with one player who we didn’t know about yet.

**Winter Leagues: Lisalverto Bonilla Update; Luis Heredia Continues His Recent Success. John Dreker has the latest winter league updates, with a first look at recently added Lisalverto Bonilla.

Tim Williams
Tim Williams
Tim is the owner, producer, editor, and lead writer of PiratesProspects.com. He has been running Pirates Prospects since 2009, becoming the first new media reporter and outlet covering the Pirates at the MLB level in 2011 and 2012. His work can also be found in Baseball America, where he has been a contributor since 2014 and the Pirates' correspondent since 2019.

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