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Tuesday, August 29, 2006

No Draft Pick Compensation?

I'm not in the mood to talk about the Reds right now, so let's chat baseball news. Major League Baseball and the MLB Players Association are currently in negotiations to renew the Contract Binding Agreement, which expires at the end of the season. We're starting to hear about some of the negotiated changes to the next agreement. For example, Maury Brown just reported the following on his blog:
Ken Davidoff of Newsday reported just over a week ago that teams may no longer receive draft picks as compensation for free agents who leave as part of the upcoming CBA.

Now comes word through sources that all the clubs have been notified that this indeed will be the case as both the Players Association and MLB have come to terms on the matter.

This would explain, in part, why Alfonso Soriano and Carlos Lee have been on the trading block. Both the Nationals and Rangers have been hot to try and get something for these two players before free agency forces both clubs to possibly walk away without anything for these two top players that were not dealt at the trading deadline.
I'm surprised and disappointed to hear this. While determining who gets compensation picks, and what degree of compensation should be awarded for the loss of a given free agent have always been somewhat nebulous to me, the rule is there to help cushion small market clubs from the blows of free agency. Basically, here's how it works (to the best of my knowledge):
  • When a team loses a high-profile player to free agency, the team that ultimately signs the player is required to give the original team a draft pick in compensation for the free agency acquisition.
  • Different levels of free agents are established (somehow). The highest level (Type-A free agents) result in a pick in the first round. Lower-level free agents result in later-round picks.
  • Teams that finished in the bottom-15 of the standings are protected from compensation. So if the rule were to stay in effect this year and the Royals signed a type-A free agent this offseason, they would not be required to give up their first-round pick to the other team.
Here's an example, as was described in Michael Lewis's Moneyball:

The Oakland A's lost both Giambi and Damon (among others) to free agency after the 2001 season. All of their losses allowed the A's to draft and sign six players in the first round that year, which included two of their current top young players, Nick Swisher and Joe Blanton. As Rany Jazayerli has shown, early-round selections are far more valuable than later-round selections in terms of the frequency with which they pay off, so these compensation picks are legitimately valuable commodities.

It will be interesting to hear why this rule was abolished. To me, this looks like it hurts everyone but the big market teams. Players may be "hurt" because teams will be more likely to try to trade them in their free agency year (which is no fun for the player...probably...though I suppose some might like to be traded to contenders) to avoid losing those players and getting nothing in return. Furthermore, smaller-market teams are clearly hurt because they will no longer gain any compensation when big-market teams sign their best players. I just don't see a good justification for removing this underrated rule that seems to do nothing but promote competitive balance.

The one thing I do like about it is that Jim Bowden may be thoroughly screwed by the Soriano deal. And it's always nice to hear news of bad things happening to bad people. It's karma, baby.