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show me the moneyIn the two offseasons governed by the Collective Bargaining Agreement ratified in late 2012, the course of free agency has changed dramatically. That, as you well know, is thanks to a new compensation system for teams that lose/sign free agents, and changes to the draft that make losing picks (and their associated pool money) all the more painful.

What we’ve seen, among other things, is that good, but non-elite, free agents can take a long time to sign, as teams display a preference for players unattached to compensation or players that are so damn good that compensation isn’t an issue. Last year, it was Michael Bourn, signing on the eve of Spring Training, and Kyle Lohse, signing on the even of the regular season. This year, it’s Ervin Santana, Kendrys Morales, and Stephen Drew all still looking for a job with the calendar about to flip to March. And Nelson Cruz just signed a one-year deal with the Orioles for less than the value of a qualifying offer.

I think it’s safe to say that the involved parties didn’t fully anticipate the impact of the CBA’s changes, and it’s clear that some players are frustrated and regretting the compensation system. Of course, I’d point out that part of the reason the compensation system working so hard against them is because of the hard-slotting that the CBA also instituted in the draft (i.e., each pick has a specific dollar value associated with it, and if you lose the pick, you lose that money from your spending pool). And that hard-slotting has shifted more and more dollars to the big league side, meaning that players in the aggregate are getting more money than they were, even if a few free agents are suffering.

That said, even MLBPA executive Tony Clark concedes, per Nick Cafardo, that the players may seek to reopen talks with the owners about free agent compensation. Whether that would mean a change by next offseason, or merely discussions that would inform the next installment of the CBA – the current one doesn’t expire until after 2016 – remains to be seen. It seems fairly unlikely that such an important change could be negotiated and formalized in time for next offseason, given the intervening season, but I suppose it’s possible. At a minimum, you can expect some changes in the next CBA.

In the meantime, Ken Rosenthal discusses the possibility that Santana, Morales, and Drew could sit out until after the draft in June, at which point they become untethered to draft pick compensation, and their price tag would presumably go up (they might also benefit from injuries and/or surprise teams in need of another player). It would certainly make for an interesting wrinkle to the mid-year trade season, and could hasten the calls to have the system changed as quickly as possible.

From the Cubs’ perspective, it’s fair to wonder whether they wouldn’t want to see the system changed just yet, given that they project to have a protected pick next year, meaning that if they were to sign a qualified free agent after this season, they’d lose only a second round pick, rather than a first. In other words, if the Cubs become spenders next offseason, the current system arguably benefits them more than other teams, because how many of the bottom 10 teams in the league this year are going to be big spenders in free agency?

Maybe the Cubs will finally catch some luck, and the current system will linger just long enough for the Cubs to take advantage of it (maybe even by signing multiple qualified free agents in a single offseason, thus further reducing the effective cost of the signing) … before changing to a more neutral system when the Cubs are consistently good, and would be harmed by having to lose first round picks for free agents.

The timing of the last CBA really screwed the front office’s ability to rebuild the Cubs in the ideal way they would have liked. They deserve a little good-timing-luck with the next one.

  • Edwin

    Hmmm. Looks like I had an anyclip ad on auto play below the article. I can’t even see where to stop it or turn it off.

  • Funn Dave

    “They deserve a little good-timing-luck with the next one.”

    Agreed. But luck and the Cubbies don’t tend to mesh too terribly well together.

    • Jon

      They have had protected draft picks (a market advantage!)every year the new CBA has been in effect.

      • http://www.bleachernation.com Brett

        They have. But they didn’t have the same young core at the age where they start to emerge.

  • Edwin

    At this point I don’t really see the Cubs signing multiple FA, at least not ones that will have QO’s. I think they’ll look to sign one of the top pitchers available, and maybe a few value signings, but nothing major. It just doesn’t seem like there will be much out there that will fit their needs.

    • nick5253

      I could easily see an opportunity to get 1 or 2 SPs with QOs attached as well as an OF. There will be plenty of holes to fill even if the Cubs have a ‘surprise’ year and are close enough to contention to even think about adding such pieces.

  • Serious Cubs Fan

    Both parties: Teams and the players association have incentives to reform the draft pick compensation for players who receive a qualifying offer

    • Serious Cubs Fan

      Who has the leverage in the negotiation? MLB or the players union?

  • Edwin

    Brett,

    How might things have been different the past couple seasons under the old CBA? It seems like it might have hindered them in the draft, but would it have changed much with how they’ve handled the talent on the MLB team?

    • Porkslap

      They could have spent as much as they wanted in the draft, and cash strapped teams would have passed on good players they couldn’t afford to sign. Also could take a late round risk on top round talented players going to college to play football and pay them enough to change their mind.

      • Edwin

        I get that, but their farm system isn’t really the problem right now, their MLB team is. Would the old CBA have changed how they’ve gone about spending on players, and being active in trades/not being active in trades?

    • http://www.bleachernation.com Brett

      Hard to say. I think it’s conceivable that the Cubs may have considered a Type A free agent or two (knowing that although they lose the second round pick, they can make it up later), but the whole market would have been so different.

      • Edwin

        True. I think the bigger difference would have been to the farm system over time, and probably wouldn’t have been felt until a few more years into the drafting/developing stages. I don’t see their FA market decisions changing much, but who knows.

        • Porkslap

          I really think the new CBA encouraged the Cubs to finish the season as poorly as possible, just so they would get more money to spend on draft and rebuild. Much easier to rebuild AND improve big club simultaneously under old system. Now, as Zambrano would say, you need to stinks to rebuild. I 100% think that the big league club would have a higher payroll under the old CBA, but I don’t think they would be real contenders.

  • Cornish Heat

    This is a fascinating development. Never would’ve thought about compensation free agents holding off until after the draft in June, but I think it makes loads of sense, and both Stringfellow and Boras should be applauded for having the nerve to suggest it to their players.

    The current system screws certain players and certainly limits strategic freedoms of general managers (e.g., the draft restrictions). I can’t wait for the Big Hand of Selig to leave us once and for all…

    Brett, do you think there’s any chance that the restrictions on draft spending could be removed during the next CBA?

    • http://www.bleachernation.com Brett

      I doubt draft spending restrictions will be reduced too dramatically. I’m guessing the owners really like that one, and the players probably aren’t going to fight too hard to get rid of it, since it helps them, too.

      • Cornish Heat

        That makes me a sad panda… :(

      • C. Steadman

        and since the MLBPA only represents MLB and not Milb players, only a select few of their future union members(players who actually make it to the MLB) will be impacted by draft spending so it’s not like they are damaging future goodwill by not fighting for the restrictions to be lifted.

      • hansman

        Eh, the restrictions on the draft haven’t helped that much. We’re talking an average of $1-2M per team per year saved.

        http://bigstory.ap.org/article/mlb-draft-spending-6-percent-year

        According to this article, the 2011 draft class got $233M in bonuses and since then teams have spent $426M. Just doubling the 2011 class figure (for the two drafts since then), you get about $600,000 per team per year saved.

        Even if we give the 2011 figure a 10% annual growth rate, that is still only ~$1.9M saved per year, per team. There are (wild guess alert) 100 free agents that receive significant contracts a year. This means that in the past two years, (200 free agents) chasing an extra $112M or ~$560,000 each.

        There just isn’t that much money that should be flowing from the amateurs to the free agents. Using this link: http://www.usatoday.com/sports/mlb/salaries/2011/all/team/all/
        MLB payroll was $2.7B in 2011 and was $3.2B this year which is a $418M increase. To put that in perspective, the increase in MLB payrolls would *almost* pay for the last two drafts, entirely.

        I am sure they will tie the two together, but they really shouldn’t be.

        • Fearbobafett

          I don’t think it was about them saving money in the draft, it was about making the draft a level playing field. Meaning that every team had the same shot a Player A.
          It removed Player A being a stud and telling the team with the first pick that I want the moon and galaxy to sign with you, I know you can’t afford that so don’t pick me.

  • TulaneCubs

    Dear Jeff Samardzija,

    If the ghost of free agent’s future could show you what to expect in 2016, this is what to expect. Your value to be completely crushed by compensation picks.

    Think about that while you’re trying to be a #1, because if you don’t get there, the big payday that you see after 2015 might not be so big. Now, take a look at this extension offer we have for you here…

    Love,

    Cubs front office

    • Edwin

      “Bah,” said Samardzija, “Humbug.”

    • Brocktoon

      SamardZija responds with pictures of half empty Wrigley from last September and printouts of the past 2 years standings

      Good luck with all that,

      Jeff

    • Jon

      A team will easily give up a protected pick for Shark and not think twice provided he’s healthy. That analogy/example is pretty far off.

      • Chad

        True, but his value wouldn’t be as high as it would be without the compensation being tied to it is the point.

        • Jon

          Depending on Sharks performance the next couple of years… if he pitches to his ceiling, that being a legit #2(4+) win pitcher under 30, I think every team outside of the top 10 would give up a 2nd rounder for him, so he has a market easily of 15+ teams. it won’t affect his price that much. It doesn’t for the top FA’s.

          • Chad

            Shark will be 31 when he hits FA. Outside of the top 10 would have to give up a 1st round pick to get him. It has affected almost every pitcher that has gone through this process.

  • Brocktoon

    I’m just having trouble seeing any of them getting more money for 4 months than they would for 6

    • Edwin

      It depends how much a team values a draft pick. The player might not make more for the total season, but they might make more on a monthly basis, and if they sign a one year deal, they’d be able to enter FA with no strings attached next offseason.

      • Brocktoon

        I can’t recall how the cab is phrased, would there not be compensation tied to them because they weren’t on the roster to start the season? I don’t recall if it is specifically tied to being on another team in order to disallow it or if it’s just not being on the team you end the season with

        • Brocktoon

          *CBA

    • C. Steadman

      more teams will probably bid for them since the draft pick comp will be off them, they wont get as much for 2014 since they lost 2 months of the season, but they will get more for the years beyond 2014(one would think) since the team signing them wont lose a draft pick, there would probably be more teams bidding for their services

      • Brocktoon

        I’d be very surprised to see a team who wasn’t interested in these guys by April going ahead to sign them for multiple years come June

        • C. Steadman

          Santana would receive multiple years, probably drew as well

          • Brocktoon

            So a team willing to lock these guys in for multiple seasons will just punt said positions for 2 months of the season?

            • C. Steadman

              a rebuilding team like the cubs could easily do that to not lose a draft pick..especially for santana

              • Brocktoon

                Bad teams shouldn’t be so risk averse that they won’t give up a 40th ove pick to improve their ml clubs. Unless the cubs are blessed with some major positive variance to star the season I’d be stunned to see them rumored to have any interest in Santana.

  • Q-Ball

    A $14 mil Mutual option at the end of a contract would have the same practical effect as a qualifying offer, without the draft pick compensation attached to it. I wonder if more players are going to ask for mutual options at the end of contracts to get around this?

    Clubs will probably want to extract $$ concessions in return for that, so the practical impact may be the same…..FA’s of a certain tier getting less money. But that would be one way around it from a player’s perspective.

  • Jon

    In regards to the 2012 CBA modifications, it is pretty amazing to what level the Front Office and fans will take playing the “victim” card. Every team plays by the same rules, outside of those competitive balance picks which are ludicrous. Also some things have gone the Cubs way with the new CBA, it’s timing coinciding directly with the time period in which Cubs have the protected draft picks.

    So it would be such the Cubs “luck” that they changed the compensation pick rule, just as the Cubs were willing to sign players and give up comp picks? That made me chuckle.

  • Blackhawks1963

    Well, in every free agent pool there are going to be some losers.

    Drew? What people conveniently forget about him is the uglieness that surrounded his final season in Arizona where the owner called into question his willingness to get back on to the field after injury. On some level I think Drew is being blackballed. In hindsight, he was an absolute idiot to turn down Boston’s qualifying offer. His arrogance and greed got the best of him. Not a lot of sympathy on my end.

    Morales? He’s strictly a DH, missed over 2 years with a broken leg issue and isn’t in the best of physical shape. Not hard to understand therefore that the market for his services was going to involve a narrow band of AL teams. Again, he was a complete fool for turning down the qualifying offer.

    Santana? He wants too much money, period. THis is a guy who was alternatively okay and awful in Los Angeles. Last season in KC he did okay. But what team would commit a big money contract to a pitcher who honestly speaking is an Edwin Jackson clone? And give up a draft pick for the privilege.

    The “system” works. The aforementioned 3 let their egos get the best of them.

    • DocPeterWimsey

      Arizona’s style of atavistic grunting is not taken all that seriously anymore, so I doubt that is the issue. Instead, there are three big and meaningful issues. One, Drew wants to sign somewhere where he will start at SS. That means “no” to the Yanks, who plan on touring the Jeter Festschrift Statue all summer long at SS. It also meant “no” to a couple of other teams that supposedly wanted him as a 2BMan. Two, Drew wants a one-year opt-out: if he plays well, then he wants the option to be out-of-there. Three, Drew has had a history of injuries of the sort that often cause MIers to fall off rapidly at his age (despite the superstitions of his old team).

      Realistically, this was neither arrogance nor greed. Drew was one of two decent OPS SS on the market this winter, and he was by far the better overall player of the two. Without a PED issue, he should not have had too big of a problem getting a decent contract. However, it seems that the high (over?) value placed on draft-picks by modern FOs scuppered this.

      • Blackhawks1963

        So in other words, you just said what I said. Drew miscalculated. Combined with his rigidity on position and contract he finds himself unemployed. This is a guy who DID have issues in Arizona and said no thanks to a World Series Championship team giving him a nice qualifying offer to remain at shortstop in Boston. A guy who, like you said, has battled injuries. A guy also who is likely not to age all that well and was never anything to write home about with the bat.

        If he really wanted employment, then he could sign this afternoon to be the starting 3rd baseman or 2nd baseman with the Yankees.

        • DocPeterWimsey

          In part, I clarified what you said deleting the pejoratives aimed at Drew, and inserting appropriate pejoratives at people who deserve them. Moreover, I added additional relevant details that you had omitted. (The fact that Boston might very well play Boggaerts over him was a major reason why he rejected their offer, by accounts: after all, with both Middlebrooks and Boggaerts, the Sox can get the same or better net production and relegate Drew to a sub for those two and Peddy.)

          And, again, Drew wants employment as a starting SS. That is not arrogance: he would be an upgrade over many starting SS in MLB.

          • DarthHater

            You also used bigger words (and German ones, too)! ;-)

  • Justin

    The qualifying offers basically take 2/3 of the teams out of the mix from the beginning. Teams picking between 11-20 are for sure out of the mix, due to their high pick, and teams with top 10 protected picks aren’t usually in the mix for top free agents, so basically it leaves teams picking 21-30 as the only option for players. And unless those teams are getting a player they really like, on a great deal they’re not interested as those picks have good value as well. Stupid system for sure. But at the same time what the hell were Morales and Drew thinking? Those guys are so marginal anyway, that they should have seen the writing on the wall. I thought they were idiots from day one..

  • bnile1

    Reality is that the current system and historically the compensation system have been poorly done. To me you should look to where the system is working well such as the NFL. IF I were changing it I would restructure it as follows

    1: If you are a luxury tax paying team, you get no compensation for losing a free agent period.
    The Yankees and Dodgers are not losing players because they can’t afford them, which is what the compensation is designed to make up for. If you’re going to take the approach of “signal the players”, then you don’t need and should not get bonus picks.

    2: Only team paying luxury tax should lose a draft pick for signing a FA.
    It’s absolutely silly that a team like the Rays should lose draft pick for elevating their payroll, when it’s an order of magnitude less than the “sign all the player” crowd.

    3: Make the pick based on both contract and production (like the NFL).
    Obviously this would mean that FA from the one year would be compensated at the next season plus one(signed 1 year , next year production accounted for in the off season and picks assigned for draft the that June, so if a guy were signed in Dec 2013, he would play 2014, and pick assigned for the 2015 draft.). You could assign starting at the end of the 1st round and have system like the NFL where based on contract/production you could get 1st round for guys like Cano etc, and going down to a some threshold level, the mechanics of which are beyond this forum, but could be agreed on fairly easily just like the NFL compensation system.

    4: Make compensation based on aggregate loses.
    It’s is asinine that teams that sign multiple Free agents often get draft picks compensation for the one or 2 player they let go. For example in the current system a team like the Yankees could lose 2 FA to teams in the middle of the round, and sign 3 players which costs them their 1st, 2nd and 3rd. That’s actually a pretty good trade to move up in the 1st and add another 1st round pick for a 2nd and 3rd rounder. With a similar bump in slot. If you did it based on net loses, the Yankees would simply lose their 1st rounder (assuming they were still luxury tax payers), all else equal, which would really make more sense. This would also keep you from cluttering up the draft with an excessive number of compensation picks. Now if a team had a net loss of 3 players, then they would get 3 picks. Obviously guys who retire or sign minor league deals would not be counted towards these totals, and I would also say guys signed for veteran minimum or below some other threshold would also be excluded.

    5: Players released would not count towards compensation, players traded would.
    This essentially eliminates the rule players traded mid season count differently than ones who are not. However if a FA doesn’t work out in his 1st season and is released, he won’t count toward the net total above. Players who were released would not count either (just like the NFL).

    That’s my proposal and it makes a lot more sense than the current system, although to be honest I’m not really sure how the current system could get much worse. The way I see it this compensates teams fairly based on what they lost, provides a barrier for high end team to do a lot of poaching, while not discouraging the low revenue teams from adding payroll.

  • Lou Brown

    I am still thinking that “the plan” involves picking up some vet FAs to go with the first wave of talent, so I expect them to go after some FAs this upcoming offseason, when they have (hopefully their last) protected pick for a while. So I fully expect the CBA to change, and the league to screw the Cubs in some way shape or form to keep them from taking advantage this offseason. Just like the slotting system went in, just as we were about to invest in the draft. Forty years of fandom has me a wee-bit paranoid, but just because you are paranoid does not mean they aren’t really out to get you.

  • Noah_I

    Honestly, I just think they put the dollar figure too low to trigger the compensation. It should be something insanely high, like a $20 million plus deal, designed only to be used on stars and fringe stars, not solid role players.

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