New MLB CBA Set To Bring Lots Of Changes, Not All Positive

MLB and the MLBPA recently agreed on a new collective bargaining agreement that will ensure labor peace through 2016. In light of the recent troubles of the NBA and NFL, this seems like a welcome change of pace. However, with this CBA comes a lot of changes to the MLB, and I don’t think all of them are positive.

So while both the MLB and the MLBPA tout to everybody how proud they are of themselves for avoiding a labor dispute, everybody from the mainstream media to the basement bloggers seem to be in agreement that there is significant reason to worry about what has just transpired.

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Draft

2. The current system of draft pick compensation will be replaced with the following
system:

A. Only Players who have been with their Clubs for the entire season will be subject
to compensation.

No more trading for Type A and Type B players with the intent of offering them arbitration and getting compensation picks when they hit free agency.

I always thought these types of moves awarded the intelligent and creative GMs, so this is a definite loss in my mind.

B. A free agent will be subject to compensation if his former Club offers him a
guaranteed one-year contract with a salary equal to the average salary of the
125-highest paid Players from the prior season. The offer must be made at the
end of the five-day free agent “quiet period,” and the Player will have seven days
to accept the offer.

Draft pick compensation is no longer associated with performance at all, which is a welcome switch given the stupidity of how players attained their Type A and Type B designations.

Basically, draft pick compensation is now determined by how much his current/former team wants him back. I like it.

C. A Club that signs a player subject to compensation will forfeit its first round
selection, unless it selects in the top 10, in which case it will forfeit its second highest
selection in the draft.

D. The Player’s former Club will receive a selection at the end of the first round
beginning after the last regularly scheduled selection in the round. The former
Clubs will select based on reverse order of winning percentage from the prior
championship season.

If I’m understanding this correctly, the team that signs a compensation player pays a higher price than the team losing the compensation player receives. Quite frankly, I don’t agree with the subtle message this is sending to teams. Basically that the MLB prefers that you let marquee free agents go over signing them to improve your club.

e. Rule 4 Draft

1. The draft will continue to be conducted in June, but the signing deadline will be moved
to a date between July 12 and July 18 depending on the date of the All-Star Game.

Love the deadline switch, because now drafted players can get into their team’s system earlier and actually play ball.

2. Drafted players may only sign Minor League contracts.

There has been a lot of complaining about only being able to sign minor league contracts, but I have personally never understood the incentive to sign these contracts from both the team and player’s perspectives. For the team, it occupies a 40-man roster spot for a relatively unknown talent. For the player, the team rushing them to the major leagues because they are taking up a 40-man roster spot is a detriment to their overall development.

3. Signing Bonus Pools

A. Each Club will be assigned an aggregate Signing Bonus Pool prior to each draft.
For the purpose of calculating the Signing Bonus Pools, each pick in the first 10
rounds of the draft has been assigned a value. (These values will grow each year
with the rate of growth of industry revenue.) A Club’s Signing Bonus Pool equals
the sum of the values of that Club’s selections in the first 10 rounds of the draft.
Players selected after the 10th round do not count against a Club’s Signing
Bonus Pool if they receive bonuses up to $100,000. Any amounts paid in excess
of $100,000 will count against the Pool.

B. Clubs that exceed their Signing Bonus Pools will be subject to penalties as
follows:
Excess of Pool Penalty (Tax on Overage/Draft Picks)
• 0-5% 75% tax on overage
• 5-10% 75% tax on overage and loss of 1st round pick
• 10-15% 100% tax on overage and loss of 1st and 2nd round picks
• 15%+ 100% tax on overage and loss of 1st round picks in next two drafts

Up until now, nothing has been too bad, but this is one of the major changes that makes me dislike the new CBA.

Capping draft spending ends the financial incentive for many two sport talents and high school talents to take baseball up as a profession. I just find it depressing for the sport as a whole because the financial advantage was the biggest advantage that baseball had to lure talented athletes with multiple options into the sport.

The current excuse for this going around the internet is that there aren’t an exorbitant amount of two or three sport athletes in every draft class, so this will affect a clear minority. Even assuming that’s true, which it seems to be, the thought of losing even one Matt Kemp or one Zach Lee (for purely Dodgers related connections) is too much for me.

Of course, that doesn’t even address the high school talents who are now increasingly likely to opt for college baseball over starting their professional career early. Now there’s little doubt that this CBA is wonderful for college baseball and the NCAA, but I honestly have absolutely no interest in providing more talented indentured servants to the NCAA overlords so that they can make increasingly more money off the backs of those players. As you might expect, that aspect is a huge negative for me as well.

On the bright side, there are rumors that the draft cap will be set anywhere from $4 million to $11 million depending on team market size and team performance, so there’s potential for this to not be disastrous. However, I believe the concept behind capping draft spending is a significant loss for the MLB, not to mention the amateur athletes who are the ones that truly get the shaft.

5. Competitive Balance Lottery

A. For the first time, Clubs with the lowest revenues and in the smallest markets will
have an opportunity to obtain additional draft picks through a lottery.

B. The ten Clubs with the lowest revenues, and the ten Clubs in the smallest
markets, will be entered into a lottery for the six draft selections immediately
following the completion of the first round of the draft. A Club’s odds of winning
the lottery will be based on its prior season’s winning percentage.

C. The eligible Clubs that did not receive one of the six selections after the first
round, and all other payee Clubs under the Revenue Sharing Plan, will be
entered into a second lottery for the six picks immediately following the
completion of the second round of the draft. A Club’s odds of winning the
lottery will be based on its prior season’s winning percentage.

In theory, this is supposed to be a good thing because it gives extra picks to poorer teams. Like baseball welfare. However, with the new draft spending rules, I have to question how much of an impact these extra picks will actually have, if anything significant at all.

Instead of making smaller market teams jump through hoops to improve their squads via the draft, the MLB should have just left everything as it was, because many smaller market clubs had already been realizing that draft spending was one of the best methods to begin with. Now that angle is stripped from those smaller market clubs and the rules trying to force competitive balance ironically only limit the poorer clubs.

D. Picks awarded in the Competitive Balance Lottery may be assigned by a Club,
subject to certain restrictions.

If that means draft pick trading, I’m excited.

E. Top 200 prospects will be subject to a pre-draft drug test and will participate in a
pre-draft medical program.

Basically, the MLB is saying that they care about preventing drug use, but only to the extent that it’s financially viable for them to do so.

So if you suck, feel free to roid up all you want. Not that I expect these tests to catch any of the players with intelligent advisers.

International

f. International Talent Acquisition

1. By December 15, 2011, the parties will form an International Talent Committee to
discuss the development and acquisition of international players, including the potential
inclusion of international amateur players in a draft or in multiple drafts.

2. For the 2012-13 signing season, each Club will be allocated an equal Signing Bonus
Pool.

3. For each signing period after 2012-13, Clubs will be allocated different Signing Bonus
Pools, based on reverse order of winning percentage the prior championship season
(i.e., the Club with the lowest winning percentage the prior season shall receive the
largest Pool).

4. Bonus Regulation of International Amateur Players

A. Beginning in the 2013-2014 signing period (July 2, 2013 – June 15, 2014), Clubs
may trade a portion of their Signing Bonus Pool, subject to certain restrictions.

B. Clubs that exceed their Signing Bonus Pools will be subject to the following
penalties in the 2012-2013 and 2013-2014 signing periods:

Excess of Pool Penalty (Tax on Overage/Draft Picks)

• 0-5% 75% tax
• 5-10% 75% tax and loss of right to provide more than one player in the next signing period with a bonus in
excess of $500,000.
• 10-15% 100% tax and loss of right to provide any player in the next signing period with a bonus in excess of
$500,0000.
• 15%+ 100% tax and loss of right to provide any player in the next signing period with a bonus in excess of
$250,000.

I have the same problems here that I have with the draft spending cap, except it’s worse in this case because it could stunt baseball’s growth internationally, thus limiting the potential talent pool.

It’s not that I’m particularly worried about countries like the Dominican Republic and Cuba losing their love for baseball, but I do think it crushes the incentive to play baseball for many developing baseball nations, especially in Europe. Just seems dumb to limit the potential talent pool by taking away financial incentives.

5. All international amateur players must register with the Scouting Bureau to be eligible to
sign, and the top 100 prospects will be subject to a drug test.

Since players must now register centrally to be eligible, it reduces the need for teams to identify players because they must identify themselves. This will probably be a disadvantage for smart teams who want to gain competitive advantages from finding and signing players that lazier teams may not know about.

I suppose the registration itself makes everything about international signings less shady, but I don’t think throwing out the competitive advantage aspect of identifying the player first is worth it.

As far as the drug test goes, the same opinion from the draft drug testing applies.

6. The Office of the Commissioner and the Union will form a joint committee to assist
international players with their transition to educational/vocational programs after their
baseball careers are over.

Good.

Free Agency

III-a-3. Article XX(B) free agents signing minor league contracts who are not added to the Opening Day roster or unconditionally released 5 days prior to Opening Day shall receive an additional $100,000 retention bonus and the right to opt out on June 1.

This could be a double edged sword.

On one hand, it may benefit minor league free agent type players because it’s now cheaper to add them to the 40-man roster instead of just keeping them in AAA. On the other hand, it may hurt those types of players because it reduces the incentive to hand out those contracts, as there are limited spots on the 40-man roster and now it costs quite a bit to have them in the system.

b. Draft Pick Compensation

1. Starting in 2012, “Type A” and “Type B” free agents and the use of the Elias ranking system will be eliminated.

Outstanding. The hilarity of random relief pitchers and utility infielders gifting teams supplemental round draft picks and costing teams first round draft picks was one of the worst parts of the previous CBA. Worse yet, the Type A designations actually cratered interest for those players in certain cases.

Good riddance.

Postseason

a. Beginning no later than the 2013 Postseason, Postseason play will be expanded for the first
time since 1995. A second Wild Card will be awarded to the Club in each league with the
second-best overall record among Clubs that do not win a division. The two Wild Card Clubs
will play a single Postseason game, the winner of which will advance to the Division Series. A
decision on adding two Wild Cards for 2012 will be made no later than March 1, 2012.

I’m not going to get extremely worked up about it, but I do think it cheapens the result of the World Series a little. As it is, baseball is not meant to be played in short series because of the volatile nature of the results, so five game divisional matchups were already pushing the limit for me. Now though, putting in a one game wild card playoff just makes it all the more likely that a less deserving team wins the World Series with an inferior resume.

Arbitration

1. The percentage of players with two years of service who will be arbitration eligible will
be increased from the top 17% to the top 22% in terms of service.

2. All players tied at the 22% cutoff will be eligible for arbitration.

There’s now going to be more Super Two players hitting arbitration, which marginally reduces the value of team controlled players, but nothing significant.

Rosters

d. Active Roster limits will be expanded to 26 for certain regular or split doubleheaders.

Just curious to see what the specific circumstances are that will allow this move. In theory, it appears to be a solid idea though.

Ownership

VI.. DEBT SERVICE RULE

a. The Debt Service Rule will be maintained, but the default EBITDA multiplier has been lowered
from ten to eight, and from fifteen to twelve for Clubs incurring stadium-related debt in the first
ten years of a new or renovated stadium.

b. Debt of a Club’s owner or related party will be covered by the Debt Service Rule if the debt is
serviced, in whole or in part, using Club funds or assets.

c. Debt Service Rule certification process for new ownership has been modified.

The “We Hate You Frank McCourt” rule.

Performance Enhancing Drugs

X.. DRUG PROGRAM
Commencing in Spring Training 2012, all players will be subject to hGH blood testing for reasonable cause at
all times during the year. In addition, during each year, all players will be tested during Spring Training.
Starting with the 2012-2013 off-season, players will be subject to random unannounced testing for hGH. The
parties have also agreed on a process to jointly study the possibility of expanding blood testing to include inseason
collections.

In my opinion, this is nothing more than a move that makes the MLB and the MLBPA look good on paper but basically changes nothing in the realm of performance enhancing drugs except serve as an invasion of privacy of the players.

I’m not going to go over all the studies put out by doctors that say HGH doesn’t do much of anything for performance, but the fact that HGH is basically worthless without AAS makes it all the more apparent that this is purely a cosmetic change.

General

c. Waiting periods for life insurance and disability insurance for active players have been
eliminated.

d. Pension benefits and life insurance benefits for certain classes of retired players and widows
have been improved.

f. Access to health coverage has been improved for international players and their families.

g. Health care benefits have been improved while managed care initiatives have been introduced
to help with costs.

Personally, I’m surprised these weren’t already done.

VIII.. HEALTH AND SAFETY

a. Players, managers, and coaches will be prohibited from using smokeless tobacco during
televised interviews and Club appearances. In addition, at any time when fans are permitted in
the ballpark, players, managers and coaches must conceal tobacco products (including
packages and tins), and may not carry tobacco products in their uniforms or on their bodies.
Individuals who violate the policy will be subject to discipline. The parties also agreed upon an
extensive program of education and public outreach regarding the dangers of smokeless
tobacco.

Basically a “WHAT ABOUT THE KIDS?!” move. Meh.

b. The parties agreed on a program of mandatory evaluation by a trained professional for Players
who are suspected of an alcohol use problem (including Players who are arrested for DWI or
other crimes involving alcohol), and for players who are arrested for crimes involving the use of
force or violence.

Sounds good.

c. The parties agreed that no new players will be permitted to use a low density maple bat during
the term of the agreement.

Based on the research I have read, it sounds smart.

d. By 2013, all Major League players will wear a new batting helmet developed by Rawlings that
protects against pitches thrown at 100 miles per hour. The new version of the helmet is
significantly less “bulky” than prior versions of the more protective helmet.

Let’s hope it’s normal looking by then.

a. Participation in the All-Star Game will be required unless the Player is unable to play due to
injury or is otherwise excused by the Office of the Commissioner. Players Trust will receive an
increased contribution and players will receive additional benefits.

“YOU WILL DO MY BIDDING!” – Bud Selig

b. All Players will be subject to a policy governing the use of Social Media.

R.I.P. Logan Morrison

d. The parties will agree upon a comprehensive international play plan in which Clubs and Player
will visit countries in which games have not been staged in the past.

Welcome to the Ivory Coast!

f. Instant Replay will be expanded to include fair/foul and “trapped” ball plays, subject to the
Office of the Commissioner’s discussions with the World Umpires Association.

Can they just expand replay to everything except strikes and balls already? God, if they can do it at the Little League World Series in a few minutes or less, I’m sure a system could be figured out for the MLB.

Everybody is happy with this concession, but it’s still less than it should be given the available technology.

h. The parties agreed to an improved process for challenging official scorer decisions.

Kevin Brown and Brad Penny don’t have to burst into the room screaming anymore.

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Phew, that’s all folks.

About Chad Moriyama

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