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"Competitive Balance" problem
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Post by wOBA Fett on Jan 30, 2021 13:29:15 GMT -5
Is it time for the MLB to get rid of the the competitive balance method for determining compensation picks and international draft pool money?
The MLB is honestly broken under this system. Without the luxury tax and resulting penalties, the concept works fine. Big market teams can sign who ever they want on the open market and small market teams get the benefit of additional draft picks and international bonus pool money. However, when big market teams start losing draft picks and international signing money for going over the luxury tax, it creates a major problem. Teams like the Cubs, Red Sox, and Yankees will never get to benefit from the competitive balance picks because they are in major markets. Still, even they need to draft/sign quality young talent in order to build a competitive team without going over the luxury tax. Meanwhile, teams like the Padres and Cardinals, both playoff teams with top 10 payrolls, can trade for players like Snell/Arenado and still get competitive round B picks this season in the upcoming draft because they are in San Diego and St Louis. Even better, next season the Padres and Cardinals will get the max international signing bonus pool because they only received competitive round B picks this season.
Good teams with home grown star talent shouldn't have a 3 year shelf life. However, MLB luxury tax rules make it impossible for any team to keep its young core without going over the luxury tax. We won't have Red Sox Yankees worth watching this decade. After the Red Sox rebuild the Yankees will be cap broke, considering every big market team will reach a point where they can't keep their players without jeopardizing their future with the resulting luxury tax penalties.
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Post by Chris Hatfield on Jan 30, 2021 14:06:09 GMT -5
Point of information: Teams do not lose draft picks unless they go over the second CBT threshold and don't lose IFA cap space at all for CBT reasons. They lose those things for signing QO free agents.
Teams don't want to go over the CBT in the third year because they don't want to pay the tax. That simple.
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Post by julyanmorley on Jan 30, 2021 14:24:37 GMT -5
The purpose of these systems is to reduce the incentive for teams to compete for players by offering them more money. "Competitive balance" is a fig leaf to help avoid bad press.
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Post by Oregon Norm on Jan 30, 2021 15:19:10 GMT -5
What I'll write here is my own opinion. Marvin Miller broke through the reserve clause and created an entire generation of ballplayers who could be paid for their share of the wealth generated by MLB. He did that by bargaining for a short-term team "ownership" provision for those ballplayers. They would be available at well below market rates, but only for a few years at the start of their careers. With that compromise, the players would be able to reach free agency. Miller was able to show them what that meant when arbitration, which he'd also extracted from ownership, exposed what players would really be rewarded with if they could get to free agency. Catfish Hunter was the vehicle for that revelation when he was declared a free agent by the MLB chosen arbitrator after Charley Finley was declared in breach of Hunter's contract. The owners fired the arbitrator right-quick after that. The full story is just a trip ( a farm-fed psychedelic trip). That was the start of the golden era for major league ballplayers. After years of organizing the players union - and he was a real organizer having worked with the steel workers - he was finally able to show them what the prize would look like if they stuck together. They did, and that's when they finally got the owners to give in. It took years. As I've written before, Miller beat Kuhn up and down, coming and going. It's impossible to overstate what he meant to the players. That he wasn't elected into the Hall of Fame before his death is a complete disgrace to the Hall thanks to the electors. Fast forward and we're in the era of big data. Teams have finally (it took them years even as the statheads had pointed out where the real value was over a decade ago) to realize that those first few seasons of pre-arb player talent were immensely valuable, much more valuable (for most players, not all but most players) than the latter years of a baseball career. That is the real inefficiency in baseball, one that echoes back to the old reserve clause.
Until that is taken care of, the owners will increasingly be unwilling to pay good players, not the top-level talent but above-average talent, what they've been worth. That's because they've already delivered that value for dozens of times less than it's true cost. That's the emerging business model for MLB teams. The pandemic has only helped to make it more obvious.
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ericmvan
Veteran
Supposed to be working on something more important
Posts: 8,927
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Post by ericmvan on Jan 30, 2021 16:18:14 GMT -5
What I'll write here is my own opinion. Marvin Miller broke through the reserve clause and created an entire generation of ballplayers who could be paid for their share of the wealth generated by MLB. He did that by bargaining for a short-term team "ownership" provision for those ballplayers. They would be available at well below market rates, but only for a few years at the start of their careers. With that compromise, the players would be able to reach free agency. Miller was able to show them what that meant when arbitration, which he'd also extracted from ownership, exposed what players would really be rewarded with if they could get to free agency. Catfish Hunter was the vehicle for that revelation when he was declared a free agent by the MLB chosen arbitrator after Charley Finley was declared in breach of Hunter's contract. The owners fired the arbitrator right-quick after that. The full story is just a trip ( a farm-fed psychedelic trip). That was the start of the golden era for major league ballplayers. After years of organizing the players union - and he was a real organizer having worked with the steel workers - he was finally able to show them what the prize would look like if they stuck together. They did, and that's when they finally got the owners to give in. It took years. As I've written before, Miller beat Kuhn up and down, coming and going. It's impossible to overstate what he meant to the players. That he wasn't elected into the Hall of Fame before his death is a complete disgrace to the Hall thanks to the electors. Fast forward and we're in the era of big data. Teams have finally (it took them years even as the statheads had pointed out where the real value was over a decade ago) to realize that those first few seasons of pre-arb player talent were immensely valuable, much more valuable (for most players, not all but most players) than the latter years of a baseball career. That is the real inefficiency in baseball, one that echoes back to the old reserve clause.
Until that is taken care of, the owners will increasingly be unwilling to pay good players, not the top-level talent but above-average talent, what they've been worth. That's because they've already delivered that value for dozens of times less than it's true cost. That's the emerging business model for MLB teams. The pandemic has only helped to make it more obvious.
You know you've nailed it when you first two likes are from manfred and I (although we're both huge liberals, it seems). I think you need some outside-the-box solutions to restore fairness to the system. One immediate thought, now that MLB has taken control of the minors, is to use some of the MLB profits generated by the market correction for free agents to pay minor league players a reasonable salary. The other thought, and I admit that I don't know the current situation, is further investment in the pension plan. I don't think that reducing the years to get to free agency works; six years of control seems right, and less is harmful to fan continuity. You need to increase player salaries in years 1 through 6. One easy fix is to start arbitraion in year 3 for everyone, and replaces the "super 2's" with a "super 1," so that the the best rookies are rewarded immediately. But that would hurt the low-revenue clubs like the Rays disproportionately.
Basically, as of right now, getting a fair share of profits to the players, and giving the low-revenue teams a fair shot at competing seem to be conflicting goals.
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Post by wOBA Fett on Jan 30, 2021 16:36:57 GMT -5
Point of information: Teams do not lose draft picks unless they go over the second CBT threshold and don't lose IFA cap space at all for CBT reasons. They lose those things for signing QO free agents. Teams don't want to go over the CBT in the third year because they don't want to pay the tax. That simple. The IFA point is correct, but teams do in actuality lose pool space because of the cap limits. So teams that do not fall into the Competitive Balance requirements will never be able to spend as much as teams that do (unless they buy space). |
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Post by Chris Hatfield on Jan 30, 2021 17:09:52 GMT -5
Point of information: Teams do not lose draft picks unless they go over the second CBT threshold and don't lose IFA cap space at all for CBT reasons. They lose those things for signing QO free agents. Teams don't want to go over the CBT in the third year because they don't want to pay the tax. That simple. The IFA point is correct, but teams do in actuality lose pool space because of the cap limits. So teams that do not fall into the Competitive Balance requirements will never be able to spend as much as teams that do (unless they buy space). No, they do not. The only penalty for going over a CBT threshold other than paying a monetary penalty is that a team's first pick is moved back 10 spots for going $40 million over the CBT threshold. Competitive Balance picks, if that's what you're referring to, are assigned based on club revenue and market size. A team gets a pick if it was among the bottom 10 teams in either category when the CBA went into effect. They have nothing to do with payroll size, directly at least (such that they would disincentivize spending). |
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Post by lostinnewjersey on Jan 30, 2021 17:42:16 GMT -5
What I'll write here is my own opinion. Marvin Miller broke through the reserve clause and created an entire generation of ballplayers who could be paid for their share of the wealth generated by MLB. He did that by bargaining for a short-term team "ownership" provision for those ballplayers. They would be available at well below market rates, but only for a few years at the start of their careers. With that compromise, the players would be able to reach free agency. Miller was able to show them what that meant when arbitration, which he'd also extracted from ownership, exposed what players would really be rewarded with if they could get to free agency. Catfish Hunter was the vehicle for that revelation when he was declared a free agent by the MLB chosen arbitrator after Charley Finley was declared in breach Hunter's contract. The owners fired the arbitrator right-quick after that.
The full story is just a trip ( a farm-fed psychedelic trip). That was the start of the golden era for major league ballplayers. After years of organizing the players union - and he was a real organizer having worked with the steel workers - he was finally able to show them what the prize would look like if they stuck together. They did, and that's when they finally got the owners to give in. It took years. As I've written before, Miller beat Kuhn up and down, coming and going. It's impossible to overstate what he meant to the players. That he wasn't elected into the Hall of Fame before his death is a complete disgrace to the Hall thanks to the electors.
Fast forward and we're in the era of big data. Teams have finally (it took them years even as the statheads had pointed out where the real value was over a decade ago) to realize that those first few seasons of pre-arb player talent were immensely valuable, much more valuable (for most players, not all but most players) than the latter years of a baseball career. That is the real inefficiency in baseball, one that echoes back to the old reserve clause.
Until that is taken care of, the owners will increasingly be unwilling to pay good players, not the top-level talent but above-average talent, what they've been worth. That's because they've already delivered that value for dozens of times less than it's true cost.
That's the emerging business model for MLB teams. The pandemic has only helped to make it more obvious.
You know you've nailed it when you first two likes are from manfred and I (although we're both huge liberals, it seems).
I think you need some outside-the-box solutions to restore fairness to the system. One immediate thought, now that MLB has taken control of the minors, is to use some of the MLB profits generated by the market correction for free agents to pay minor league players a reasonable salary. The other thought, and I admit that I don't know the current situation, is further investment in the pension plan.
I don't think that reducing the years to get to free agency works; six years of control seems right, and less is harmful to fan continuity. You need to increase player salaries in years 1 through 6. One easy fix is to start arbitraion in year 3 for everyone, and replaces the "super 2's" with a "super 1," so that the the best rookies are rewarded immediately. But that would hurt the low-revenue clubs like the Rays disproportionately.
Basically, as of right now, getting a fair share of profits to the players, and giving the low-revenue teams a fair shot at competing seem to be conflicting goals.
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Post by lostinnewjersey on Jan 30, 2021 17:46:32 GMT -5
The problem with the six years is that it gives clubs an incentive to artificially delay the start of a player's major league career. There have been recent exceptions (Machado, Harper), but most players hit free agency when they're already at or a little past their peak productive years. I would suggest that club control end either right before (or maybe right after) a player's age 27 season. (This assumes every player's date of birth can be confirmed, perhaps not a reasonable assumption.)
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