Earlier this year I had a column that touched on the impending expiration of the previous Collective Bargaining Agreement. In that column, I noted that there were several issues that were agreed upon in theory by both sides concerning the June Amateur Free Agent Draft, but were never implemented (the world-wide draft, reducing the number of rounds in the draft, instituting a universal signing date). A new agreement has been reached by both sides, under the radar, extending the current agreement to December 11, 2011.
The new agreement has a few changes to the draft. There isn’t anything revolutionary like the proposed world-wide draft, a standardized slotting/signing system or the ability to trade draft picks, but the changes that have been made are notable since changes to the draft rarely take place. As I touched on in the previous column I mentioned above, changes to the draft are often difficult to make because neither the players nor the owners care enough about the draft to make any changes, and often focus their energy on agreeing upon the issues that affect the ins and outs of big-league baseball and not what happens in the minor leagues or at the amateur level.
While the new CBA did include details pertaining to revenue sharing, the competitive balance tax, the debt service rule, I’m going to focus on the ones that affect the draft, breaking them down while hoping to make sense of them.
Universal Signing Date
A universal signing date of August 15 has been implemented, starting next year. All players, with the exception of college seniors, must sign by the 15th of August, roughly two months after the draft takes place.
What does this mean?
Draftees from year-to-year now know when they have to be signed by, and can’t carry out lengthy negotiations into the following year, nor are they able to be signed up until a week before the next year’s draft (if they don’t attend college that is). If a player isn’t signed by August 15th, they either attend college, junior college, or simply wait for the next draft to roll around to be picked again.
This gives the teams a lot more leverage when it comes to negotiating with draftees. Many players, particularly those that are represented by some of the more recognizable agents, often would take as long as humanly possible to sign, knowing the longer they waited, the more money they were likely to get. By giving draftees a two-month window in which they can sign, it gives the team that selected the players a much better handle on the negotiation process while still giving the teams time to get the players into their minor league system, whether it is to close out the minor league season, or to participate in their fall instructional camps.
This also will eliminate the draft and follow process starting with next year’s draft, meaning any player that is eligible for the process from last year’s draft will still be under their drafting team’s signing control up until a week before the 2007 draft.
Unsigned Draft Pick Compensation
Starting with next year’s draft, any team that is unable to sign one of their first or second round picks will be awarded a compensation pick of near-equal value the following year. Teams that are unable to sign a third-round pick will be awarded a pick in a compensatory round between the third and fourth rounds of the following draft.
What does this mean?
If the Tampa Bay Devil Rays are unable to sign the first overall pick next June by the August 15th deadline as detailed above, they will receive a pick right after the first overall pick in the 2008 draft. Previously, unsigned first-round picks garnered a compensatory pick at the end of the sandwich round that fell in between the first and second rounds.
This once again gives another huge bargaining chip to the teams. Should negotiations with their early draftees head south, they can take consolation in the fact that they will be given another chance to select a player of near-equal value the following year. This in theory would prevent the teams from caving in to a prospective draftees’ potentially absurd bonus demands. The teams are aided by the fact that this has been extended to second and third-round picks as well.
It should be noted, that in the event a team does receive a compensatory pick the following season for an unsigned draftee, they would not receive additional compensatory picks should the initial compensatory selection not sign.
Free Agent Compensation
There was a rumor floating around leading up to the new CBA that free agent compensatory picks would be eliminated altogether. That didn’t happen, but the process has been revised.
Starting this year, Type C free agents will no longer garner any compensation (previously teams that lost a Type C free agent was awarded a compensatory pick between the second and third rounds, although only if that free agent was a first-time free agent, meaning no compensation was awarded for a Type C free agent that had previously been on the open market).
Also starting this year, teams that lose a Type B free agent in the open market will now receive a compensatory pick in the sandwich round between the first and second rounds instead of being awarded a pick from the team that signed the free agent in question.
Type A free agent compensation will remain the same (a pick from the team that signed the player and a sandwich pick).
However, starting with next year’s free agent pool, the classifications for Type A and B free agents will change. Type A free agents will be classified as the top 20% of the players at their respective positions (as rated by the Elias Sports Bureau, instead of the top 30%), while Type B free agents will be classified as the top 21-40% of the players at their respective positions (instead of the top 31-50%).
What does this mean?
Free agent compensation was originally instituted to help the smaller market teams when their own players got too rich for their blood. In recent years, teams like the Red Sox, Yankees and Braves have received a greater advantage because of the compensation process than teams like the Royals, Pirates and Devil Rays. While altering the system doesn’t necessarily help the little guys any more, and it doesn’t necessarily benefit the larger-market teams any more, it does in theory make it more appealing for a smaller market team to go out and sign free agents knowing they don’t have to worry about losing draft picks the following year.
By changing the classifications, you’re essentially narrowing the free agent compensation pick pool by 20%. By narrowing the number of Type A free agents by 33%, you’re narrowing the numbers of players that will cost any team one of their own, first or second round draft picks. Signing a Type B free agent no longer will cost the signing team a draft pick whatsoever, while the team that loses that player is still awarded with a compensatory selection.
All compensatory picks are awarded only if the previous team of the free agent offers arbitration to said player. Teams often would not offer arbitration to their free agents, as those players often would recognize they could make more through the arbitration process than they could on the open market, and their previous employers didn’t want to take the risk of being saddled with that increased salary. Again, by narrowing the free agent pool, you will make the number of players that would affect free agent compensation less, but overall it will be a better talent pool, meaning teams may be more inclined to offer them arbitration and then in affect receive a compensatory selection.
Also, since Type B free agents will no longer cost the signing team a draft pick, it will likely increase the number of teams that offer arbitration to their Type B free agents, since their will no longer be any penalty for signing such a player on the open market.
There were also a few changes made related to the free agent and arbitration process. Teams now must offer arbitration by December 1st, and the players now have until December 7th to accept or reject arbitration. By bumping up the dates you’re essentially making the free agents gamble as to whether or not they want to remain with their previous employer or reject their offer earlier in the offseason to continue to negotiate with other ballclubs.
Teams can also continue to negotiate with free agents that were on their team from the previous season that either rejected arbitration or weren’t offered it. Previously there was a series of dates in placed that determined how long a player could negotiate with their previous employer, and if no agreement was reached by that date, they couldn’t sign with that team before June 1st of the next season.
Congratulations are in order for both Major League Baseball and the Player’s Association. When was the last time a major labor agreement was agreed upon so quietly? This is the second CBA in a row that has avoided a work stoppage, a tribute to the dedication of everyone involved with these negotiations.
The interest in baseball at every level, from the big-leagues to the minors to independent baseball to college and even high school baseball is at an all-time high. Deciding to recognize that popularity while avoiding anything that could possibly disrupt what is clearly a very good thing was a very wise and astute choice, even if the overall changes weren’t as radical as some fans would have liked to have seen.
The thoughts and opinions listed here do not necessarily reflect those of Perfect Game USA. Patrick Ebert is affiliated with both Perfect Game USA and Brewerfan.net, and can be contacted via email at pebert@brewerfan.net.