Baseball’s off-season is typically much slower than other professional sports. In other leagues, free agency begins, and it’s a frenzy. In baseball, free agency begins and it takes a month before the market really starts to get active. Part of this is due to all of the deadlines, rules, and roster situations that are unique to baseball. But this off-season, there’s another factor in play: The Collective Bargaining Agreement.
For the most part, the talk of the CBA has been quiet this off-season. There has been some small talk of certain rules that are being discussed, like changes to the strike zone or a 26-man roster. But nothing concrete, and no word on how the talks are coming along, or whether a resolution is coming. That changed today, when Ken Rosenthal reported that the owners are considering a lockout if the two sides can’t reach a new agreement by the December 1st expiration date.
This sounds serious at first, but I also feel like this kind of talk comes up every time the CBA is close to expiring. Baseball has avoided a work stoppage like the plague since the strike in 1994, which turned a lot of people off to the game (including yours truly for a few years). The league is making more money than ever right now, and I don’t think either side wants to jeopardize that.
Of course, the money is the big reason why a lockout isn’t totally out of the question. Rosenthal reports that some of the big issues involve financial decisions. The owners want to resolve this by eliminating direct draft pick compensation in free agency — which drives down the price of those free agents — and implementing an international draft. The trade-off here would be that the players would receive more money via players who were previously restricted by compensation, while the owners would save money by limiting the bonuses of the international amateur players through a draft.
The players rejected all of this, as they didn’t want an international draft. Rosenthal quoted an anonymous person on the player’s side to express the reason why the players were against this:
As one person on the players’ side put it: “We aren’t giving them something that affects 30 percent of big leaguers and probably 50 percent of minor leaguers in exchange for something that affects less than 20 players every year, especially guys who are staring $17 million in the face.”
It’s misleading to frame the argument in a way that compares the number of players impacted by this change. It’s not about the number of players. It’s about money. Sure, the number of players facing compensation is very small compared to the amount of international amateurs impacted by a draft. But the amount of money those 20 players in the big leagues would receive is going to be much greater than the amount of money saved on the international draft.
All of this is very hypocritical when you think back to the last CBA. The players union was dissatisfied with the rising costs on the amateur side in the draft. The owners also wanted a way to quell those rising costs. So the players agreed to restrict draft spending, and in exchange, they got an overhaul of the compensation system, limiting the amount of players who would be restricted by compensation. This wasn’t the exact trade-off, as I don’t know if the players agreed to that specifically in exchange for the new draft rules. But the concessions the players got were at the MLB level, and impacted a smaller group than the thousand-plus amateur players that get drafted each year.
That’s not to say the players are wrong this time around. It would be hypocritical of me to be against the players position this time around, when I was against the exact opposite position the last time. A big thing I didn’t like was that the players could negotiate away the rights and the earning power of people who weren’t even in their union, and that this would be a concession for them. But there’s also the fact that it continues a horrible trend in baseball where the guys at the top keep earning more and more, and the guys at the bottom are left behind.
Consider that argument above one more time, about the number of players impacted by the trade-off. Now consider that MLB teams pay their non 40-man roster minor leaguers a salary that is below the poverty level. That’s maybe 6,000 players or more across minor league baseball who are impacted by this, along with every future draft and international player. Meanwhile, there were 49 players entering the season who were making anywhere from $18 M to $33 M in 2016. If those players took an average $5 M pay cut — and to borrow one more line from the players union above, they’re still staring $13-28 M in the face — then teams could afford to spend around $40,000 on every minor league player (the salary would be below this figure, due to payroll taxes, but it wouldn’t be the poverty level).
That’s a bit of an extreme example. But you could break it down further. If 120 players took a $2 M cut, you’d get the same result (player $120 received $10.9 M). The point here is that the player’s union is absolutely fine with a large number of people having their earnings severely restricted, while fighting for the rights of people who would otherwise still be making an insane amount of money. So while I like that they’re sticking up for the earning power of international amateurs, it feels more like a negotiation ploy, as their track record shows that they will sell out the little guy to get more for the big guys.
There’s also the issue here that the international process is broken. The new draft system worked in a way to limit spending by imposing harsh fines on teams who went over their bonus pools. This backfired for small market teams like the Pirates who were taking advantage of their ability to spend in the draft when they were limited in spending on the MLB free agent market. Meanwhile, the international side got some restrictions, but those actually worked as an advantage to teams who can afford to pay large sums in fines and taxes.
I believe there should be an international draft, but I also believe that it should operate in the same way that the former US draft operated, where teams are allowed to spend whatever they want to sign a player. The individual bonuses are still restricted, as you go from being able to negotiate with 30 teams to being able to negotiate with one team. But if teams wanted to spend more than their slot amounts and load up on amateur players, they would have the freedom to do so.
A lot of that seems like wishful thinking and a simple solution to a complex problem. The earning power of amateurs shouldn’t be restricted, especially when the player’s union works so hard to make sure the earning power of MLB free agents is as unrestricted as possible (and the current proposal would leave no restrictions for the earnings of free agents, other than the ineffective competitive-balance tax).
The CBA is full of these complex negotiations. The owners are offering up money in some areas to save in others, the players are doing the same, and both sides are pushing to get as much money as possible. It’s the dirty business of this game, and it’s why there’s no surprise when negotiations don’t come automatically. That’s why we hear threats of a lockout every time the CBA is about to expire.
A lockout could very well happen. But until it does, the threat is kind of like the threats Scott Boras used to make about sending top draft picks to Japan if their drafting team doesn’t meet the high demands — it’s a possibility, but you know that neither side wants that, and they’re more likely to meet in the middle at a price that is agreeable to both of them.
**Pre-Order the Pirates Prospects 2017 Prospect Guide. The Prospect Guide will come out in January (regardless of whether there projects to be a 2017 season when January rolls around), and you can pre-order the book today. Top Prospect and Annual subscribers get discounts, and you can upgrade your plan here to get those discounts on the book.
**Winter Leagues: Eric Wood Wastes No Time Making His Dominican League Debut. It’s going to be interesting seeing how Wood does in this league. The AFL was a nice showcase league, but I feel the Dominican Winter League is a step up, since it’s less about development and more about winning, plus it’s mostly filled with Triple-A and MLB equivalent players.
