Adjusting to a Shifting Landscape and Other CBA Bullets

A number of Lukewarm Stove items to get to today, so hopefully not too many of you are traveling for Turkey Day. Until we get bits on Geovany Soto, Carlos Marmol, Matt Garza, and Prince Fielder, bullets…

  • The big news yesterday was the collective bargaining agreement, and some of its surprisingly drastic changes to the draft, international free agency, and draft pick compensation for free agents. One important bit that has come out since the announcement: the “pools” of money available to teams for the first 10 rounds of the draft are expected to range from $4.5 million to $11.5 million, depending on where the team picks and how many picks they have. That means the overall money spent on the draft will not be dramatically lower than it has been in the last few years, which is good – but pool limits are still much lower than, for example, what the Cubs spent in 2011. The overwhelming reaction from pundits has been that the changes to the draft are a net bad thing for baseball. No argument here – baseball has just put up a roadblock to young, talented, multi-sport athletes. Not a great idea.
  • The loopholes and unintended consequences are already unfolding: a reader suggests to BA’s Jim Callis that teams could decide to not sign their first rounder in a given year, use the money allotted to signing that player in the later rounds (so they’re still using their full pool of money that year), and then the next year they get a replacement first rounder PLUS the allotted money to sign that player. So, doing this allows you to spend that money twice.
  • The international free agent pool of money for each team in 2012 is expected to be about $2.9 million, which is hopelessly low. Sorry, kids from Latin America – your signing bonuses just went way down. Note that the international free agent limits don’t appear to apply to players from Japan, or other players over 23 years old.
  • As discussed yesterday, in the new CBA, draft pick compensation is given for departing free agents only where their current team (for whom they had to have played the entire year) offers them a one-year deal for a salary in excess of the average of the top 125 salaries from the previous year. For 2011, that number would have been about $12.5 million. I suspect that number will go up in 2012, as more teams allocate resources formerly available for the draft or international free agency back to the big league payroll. For this offseason, it looks like Aramis Ramirez and Carlos Pena will remain Type B free agents, subject to the rules we’re all used to. Today’s the deadline to offer them arbitration, by the way. Ramirez is guaranteed to get an offer, but Pena is a closer call.
  • My gut says that, while the Cubs’ rebuild strategy won’t change in total in response to the CBA, the Cubs will now pursue free agents a bit more aggressively. Pursuing Prince Fielder went from a “probably not” in my mind to a “yeah, I think maybe they will.” Aggressively pursuing Yoenis Cespedes went from a “yeah, I think they probably will” to a “oh yeah, they’re going to make him a big offer.” Ditto Yu Darvish.
  • Jim Callis offers some helpful analysis on the various CBA provisions for those who would like to acquire some more in-depth knowledge.
  • Jonah Keri, as he usually does, nails the biggest problems with the CBA, particularly the ways in which it hurts small market teams … and smart front offices. Crud.
  • I had a thought this morning on why the Cubs/Red Sox and Cubs/Padres are waiting to decide on compensation for Epstein and Hoyer until after the Rule 5 Draft: maybe it’s as simple as the Red Sox and Padres potentially wanting kids who are currently exposed to the Rule 5 Draft, but not wanting to have to use a draft pick on the kids, and thus wanting to wait until after the Draft to make sure that the kids aren’t selected? Think of it this way: say the Red Sox want Abner Abreu, who is a high-upside prospect (outfielder the Cubs got for Kosuke Fukudome), but who is still at High A. He’s eligible for the Rule 5 Draft, and is highly unlikely to be selected, because he almost certainly can’t stick on a ML roster right now. But, if you’re the Red Sox, why would you want to take him now, knowing that there was a small risk some other team might take him in the Rule 5? So, instead, you wait until after the Rule 5, make sure you’re in the clear, and then finalize the compensation. We may have been overcomplicating this thing.
  • Carlos Zambrano is expected to be able to return to the mound on Saturday after taking a liner to the face.
  • MLBTR blogger Tim Dierkes was on CSN’s new hot stove show last night to talk about the Cubs’ offseason and chances in 2012. ”I think you pretty much have to write off 2012,” Dierkes said. “I don’t think the Cubs have that kind of talent. I think Theo is going to acknowledge that … I think we need to put our faith in these guys, but I think we need to keep our expectations low for this upcoming season.” Expectations are, indeed, low. A lot could change this offseason, though.
  • Check out the new Bleacher Nation shirt(s), which are swell. There are a few special deals, outlined here, that last through tomorrow only. Thus, I am reminding you.

Brett Taylor is the lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

74 responses to “Adjusting to a Shifting Landscape and Other CBA Bullets”

  1. Fishin Phil

    MLB and the Players Union really stuck it to the kids who aren’t in the union yet.  Next week, puppy kicking and baby seal clubbing.  Hooray!

    1. MoneyBoy

      Brett & Phil …  Jonah Keri makes a great point … look for the lawyers to get in the middle of this one!!!

      “Restraint of trade” or whatever legal blather … but the biggest issue (IMO) is the number of kids who will look to other sports b/c of the limitations on slotting.

      Brett, you might want to see if you can find Kevin Goldstein’s appearance on CTL last night.  He had some great thoughts on one downside to ITL scouting … registering ALL of the people who find kids in odd little spots … thus making the kid known to ALL 30 ML teams (think D3 “unknown” Scottie Pippen),

  2. Cliffy

    Here is another strategy as posted on BCB

    If I’m an owner, I tell my staff to identify every player who isn’t likely to accept slot but will go to college instead. Then I would draft as many of them as I could and pay them all as much as I feel like paying. Even if I had to lose 5 draft picks the next year, I wouldn’t care, because the players I’d be drafting in rounds 6-20 would be guys who could easily be 2nd-4th round picks without slotting.

    Even years: draft like crazy Odd years: take the draft mostly off.

    Rinse and repeat.

    But if I can spend enough money in 2013 to beat what the slot-following teams are doing in 2013 and 2014 Then I don’t care if I lose those two draft picks. Because I signed a couple of kids in the later rounds the year before that would have been 1st/2nd round picks except nobody was willing to pay them over slot.

    Most types of competitive balance arrangements can be blown up by crowd-sourcing a contest to a bunch of capitalistic geeks who play strategy games and attend places like the University of Chicago lab school. I’m fully confident that a 22 year old strategy/statistics whiz who wants to either break into sports capology or become an agent someday will inhale the CBA and have a solid plan worked out to pitch to Theo within six months.

    Inval

    1. wax_eagle

      The joys of new and interesting market inefficiencies. That is really all this collective bargaining agreement does. It changes the market which means that teams with intelligent front offices have new avenues in which to find unexploited inefficiencies. I think you just highlighted a potential one.

    2. MoneyBoy

      Cliff … A random thought … why not use a #1 pick in the every other year on a player likely to be taken in the 40th round?

      1. Luke

        And save that signing money to spread around picks from rounds 2 through 10? I think you’ll see teams do that (though 40th round may be extreme).

  3. Todd

    Love your analysis, Brett. Couple of thoughts:

    I know that, in general, the capping of draft money is bad for the sport for the reasons you’ve outlined, but if the Cubs’ front office is now the best in baseball (I think so), doesn’t this new CBA sort of benefit “us” because of the belief that the Cubs will be the first to exploit new inefficiencies with superior strategy.

    Also, Do you think the low international money is a precursor to a world draft?

     

    1. Luke

      Several sources are saying that a world draft is likely. Some speculate it could be here as soon as 2014. There are a lot of issues that have to be worked out first, but it is absolutely on the table. It would likely be a separate event from the June draft, but it is on the table.

      The Cubs should still have an edge, as the new system puts a larger emphasis on making every dollar count. On the other hand, they won’t have nearly as large of an edge as they would have had under the old system. Instead of having a big advantage in bucks and brains, they’ll just have the advantage in brains (we think). The power of their bucks has been restrained.

      1. Kyle

        The power of everybody’s bucks has been restrained in the micromarkets of amateur draft.

        The only place it’s relatively unrestrained is the MLB payroll, where the scale is much larger.

        Point, big markets.

      2. Todd

        Thanks, Luke. I’m not disagreeing with you, but instead playing devil’s advocate. Does the capping necessarily have a huge impact on the power of their money? I say this because it appears that many teams have begun spending heavily in the draft and internationally recently, so that was kind of a push. I think it mostly protects the few teams that refused to increase amateur draft spending, and free agents.

        Again, I see the drawbacks but I’m just questioning the severity of them, as it relates directly to the Cubs. I completely agree that this CBA will steer some talent away from baseball.

        1. Luke

          If the penalties were just cash, I would say it would have no impact. But when teams start losing draft picks, and worse, seeing those picks be given to other teams, things get tougher. No one is going to spend 5% over the cap unless they are really, really certain their draft is worth the cost. I think that will restrain spending.

          But I also think it will vary year to year based on the depth of the draft. I think teams would happily forfeit draft picks to load up on the bonanza that was the 2011 draft.

          1. wax_eagle

            This is a good point. Teams should have a decent idea of what is coming down the draft pipe a year or two from now. If they see a sparse draft coming up they can afford to stock up now.

        2. MoneyBoy

          Todd – The thought kicked around on CTL last night was that MLB knew this was coming … so this year was a “Black Friday” rush to get in while the gettin’ was good !!!

          Luke – Agree … the loss of draft picks makes up for that … on the other hand …. it is already being said that the 2012 draft will be much “weaker” than 2011 … so, if a team (or teams) has that sense, then why not rush into Draft A and overspend when you might not mind losing picks in an otherwise weak draft year!!!

          1. Luke

            And that’s why drafts just got a lot more difficult to project. To plan strategy for 2012, teams will have to have a sense of what is out there in 2013 and maybe 2014. Scouts are now more important than ever. We could easily see Team A spend everything in 2012 while Team B, equally well run, sits on the sidelines in hopes of getting extra picks in 2013.

  4. Cliffy

    Using the strategy that was described by Jim Callus wouldn’t this be the perfect year to try it. They have the 6th pick, so the alloted money for that pick will be pretty high. Draft a hard sign player, low ball him. Then wind up not signing him. Then use that money to spend on others and get additional first round pick next year.

    1. Luke

      I don’t know… 6 could be an awfully good pick. This season, I’d be more inclined to load up on high end talent, blow well past the budget by signing the best possible players to whatever it takes, and then try to trade for competitive balance lottery picks to get back into the first round in the next two seasons. Don’t sign that pick in one of those years, and start the funds rolling into the next season.

      But right now I don’t have a good enough sense of the depth the 2012 draft to comment. I don’t think it will be as strong as the 2011 class, but if it is even close I think we’ll see teams spend away. If its weak, we may see a huge retraction in spending.

  5. Toosh

    To offer or not to offer, that is the question. Arbitration, that is. 3 p.m. deadline.

  6. kinhin

    Is the money caps towards bonuses only or whole contracts given for the first 10 picks?

    1. Luke

      Bonus only. I believe all minor league contracts have the same dollar amount, so the only difference is in the bonus.

      The cap covers all bonuses in the first 10 rounds, plus all bonus money in excess of $100,000 after round 10.

  7. Deer

    What would be the rationale for bringing back Pena and not Ramirez? His positive attitude? 1b has more FA/trade options and both guys will get multi-yr deals. Pass on them both.

  8. die hard

    In a way the new CBA has a consequence, intended or not, of racial discrimination by keeping excellent college football players (who are predominantly black) out of baseball so they can continue to supply the NFL. If there is fire behind this smoke, watch Congress look into holding hearings. Collusion between MLB and the NFL to discriminate for this reason would be great 2012 election issue. How professional sports has perpetuated another form of slavery. Keep them in the NFL. Hope its not true. But could be something there.

    1. JulioZuleta

      Jake Locker, Bubba Starling, Drew Henson, Jeff Samardzija, Matt Szczur…. Taiwan Easterling? Five white guys easily came to the top of my head, and there are many, many more. I had a little to remember a black football player to be drafted, and he had zero shot at the NFL.

      1. JulioZuleta

        Tom Brady, Jack Del Rio, John Elway, Toby Gerhart, John Lynch, Dan Marino, Matt Moore, Evan Sharpley, Chris Weinke, Todd Helton…..then there’s Daunte Culpepper, Deion, Bo…

        1. JasonB

          I think Joe Mauer was also planning to go to Florida St to play QB before signing on with the Twins.  not 100% sure what the chain of events was there though.

          Another thought I have on the CBA is that it’s going to place a greater emphasis on college baseball to develop talent because a number of the tough sign high school players will likely opt to attend college.  This could be a good thing as we will get to see them play against more advanced competition prior to drafting, which is at times difficult to gauge when signing high school players.

          Conversely, the value of rookie and short season teams has probably decreased because there won’t be as many high talent high school players to fill those rosters.

          1. JulioZuleta

            There will be very few high end college seniors sticking around now. As Brett said yesterday, since they have no threat to go back to school, they have no leverage and will fall several rounds and teams will offer them 100K at max. You’ll see tons of juniors coming out from now on, as the difference in staying an extra year could be a couple million dollars in some cases.

            1. JasonB

              Having trouble with this JZ – maybe I’m just misunderstanding what you’re saying.  Since they’re more likely to improve between their junior and senior years, wouldn’t they be more willing to stay in college to increase their draft stock the following year?

              It seems like the draft will now be more similar to the drafts of other major sports like football and basketball where the higher draft picks make the most money.

              1. JulioZuleta

                If you come out your junior year, you have the leverage of going back to school your senior year. Teams will up there offer to not waste their pick. If you come out after your junior year, the team can say “Here’s 50K, take it or go sell insurance somewhere”.

                I think you’ll see seniors fall pretty far. Why waste a high draft pick on a guy you can lock up for cheap in a later round. Playing devil’s advocate to myself, I could also see a team taking a senior they really like in the second round, and still lowball him on the offer, freeing up more of their 10 round budget. Either way, seniors will be losing lots of money.

          2. Luke

            College coaches have to have be the happiest people in the world with this new CBA. More of the best players are likely to head to college.

    2. EtotheR

      MLB is actually enormously worried about losing black players and fans.

      1. die hard

        yep…emphasis on latin players is behind CBA. Once NAACP studies this document, watch out. Could see a boycott of baseball. Then the Commish will be picking more than his nose.

        1. Luke

          Latin players are among the most negatively affected by this CBA. Check out the sections regarding limits on international free agents and the penalties for exceeding those limits. The amount of money flowing into that market, which is dominated by young latin players, has been severely curtailed. The drop off is steep enough that some baseball writers have been joking that Hugo Chavez will file a grievance with the World Trade Organization.

  9. MC2

    Excuse me if I seem behind here I’m still trying to gather this in, Kind of a “CBA VIRGIN”, didn’t the owners all vote/sign off on this, and if so why if it is so bad? Seems like a hurry up and get it done before the old contract expired. Also is it right what I heard that teams now instead of finding international talent and being able to sign have to post the said player so everyone else can take a run at them 1st? It seems the teams that don’t like to spend as much money in those areas are gonna get to be lazy and let other teams do all the work? As a potential player I think I would shy away from teams that showed little or no interest until the last minute… …

    1. Luke

      How Selig got this deal through the owners is, in my mind, the great unanswered question of the negotiations.

      On the international front, I don’t think it is quite as bad as it looks. Say you are the Cubs, and there are six guys you really like. When you list those guys with MLB, you won’t just list those six. You’ll list absolutely everyone you looked at, at all, ever, possibly including your taxi driver. You’ll hide those six guys you want in a much,much longer list. Teams with the resources to hire a lot of good scouts will scout your list, find your six, and maybe try to sign them out from under you, but that probably won’t be very many teams. On the other hand, that’s exactly what the Cubs will be doing to everyone else… scouting their lists and maybe trying to sign players away… so it will more or less even out. Teams with more scouting resources in the area will do better than those without.

      And actually, I think all baseball is doing is formalizing a setup that basically already happened. I don’t think there were a lot of secrets on the international market. There were a lot of varying opinions on guys, but not a lot of secrets.

      The spending limit will probably be a bigger issue than the listing process.

  10. kinhin

    The easiest way I see of getting around the signing bonus problem is working a “signing bonus” into the first year of the rookies contracts.
    That or give them ridiculously easy performance bonuses the first year of their contract.

  11. Cliffy

    Im trying to weigh the trade value of Marshall vs Marmol. Does the market put more value on Marmol because he’s considered a closer. Obviously Marshall’s numbers have been better. If we do decide to move Marshall both Beliveau and Rusin would get serious looks.

    1. Larry

      That is one good thing about the Cubs right now, if they move Marmol and/or Marshall they have the arms at the back end of the bull pen to replace them. If the Cubs aren’t intent on competing in 2012, it might really be worth it to look at trade options. They could get a few pieces that could be very important in the next few years.

  12. Larry

    It seems to me, and I haven’t read that much on it, that the new CBA is designed to reward only those teams that are looking to add talent in as inexpensive a manner as possible. If you look at the teams that spent big on the last draft, most of them were small market teams looking to build strong farm systems. The only people being rewarded by the new CBA are those that are too cheap to play the game.

  13. cubbylair

    I am confused with the Pool dollar limitations. Do they apply only to the first 10 rounds?

    1. Luke

      Every dollar spent on a player in the first ten rounds, plus every dollar in excess of $100,000 spent on a player after the first ten rounds.

  14. Ron

    They wait till after the rule 5 to protect their own players also.

    And the t shirts are svell.

  15. Roland Perrelli

    I have not seen this mentioned so if I missed it I apologize. But does the New Dominican training facility that the cubs are building give us a leg up. As we have a lot of kids that got little to nothing as a signing bonus on our dominican team. Furthermore, they should do the same thing if I am understanding this right in asia. To develop unknown talent as a under the radar pipeline for the cubs. If I am wrong please correct I am not as versed on international signings as others are.

    1. Cliffy

      If I understand the agreement correctly any advantage that the Cubs might have gotten from this new facility will be neutralized. The hope was to attract possible diamonds in the rough and let them fly under the radar. I don’t think the new CBA will allow for that.

      1. Luke

        Reduced, at least. The Cubs will still have the advantage of getting a better and more in depth look at players thanks to their facility. Teams are unlikely invest heavily based on a list if they haven’t scouted a guy in person, so that will still help the Cubs some. Also, that facility will be a place where players who play in the United States can go to train in the winter. That could be a compelling tie breaker in the Cubs favor, since it is said to be one of the best facilities in the Caribbean.

        The glass isn’t completely empty. Three quarters empty, maybe, but not completely.

  16. MichiganGoat

    Is there money that can be handed out that does not fall into this pool of draft money. Is paying for college included in the pool? I think a bright FO team will find loopholes in using money, and that benefits the Cubs.

    1. Luke

      Right now, international free agents over the age of 23 are exempt from all the caps.
      Players that come over from Japan via the posting process are exempt from the caps.
      Players that come over from Japan as free agents might be exempt, I’m not sure on that.
      And I would assume that Korean players who are posted would be exempt just like the Japanese ones, though I have not seen that stated anywhere.

      As far as the domestic June draft goes… how about this scenario: the Szczur.

      Matt Szczur was drafted and signed. But then the Cubs renegotiated that deal to lure him away from the NFL, and in the process tore up his old contract and wrote him a new one for a lot more money. As a result, Szczur had to go on the 40 man roster or be exposed to the Rule 5 draft.

      I could imagine slightly shady (or smart) teams making a few handshake deals with certain very, very good draft prospects to similarly tear up their original, modest draft contracts a year or so later and write them new and more lucrative contracts. Those prospects would then have to be protected from the Rule 5, just like Szczur, but it would effectively be an end run around the block on major league contracts.

      I haven’t seen anything that makes me think such a setup would be banned, but I’m sure Selig would find a reason to punish the team involved once it was exposed. Unless he was blocked by the union, which is possible. I’m sure the union wouldn’t mind seeing that sort of thing happen occasionally. It helps inflate player values without taking too much money away from the guys on the 25 man roster.