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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.


  1. Dear Jin, I couldn't agree more with you on this point. Being one of those unfortunate members of the baseball community to live in the KC area I am all too aware of the life-line that draft picks give marginal clubs. Even if the Royals and the Reds seem very good at squandering these picks, they do give the teams hope, and as the saying goes, even a blind pig finds a nut every now and then.

    I also understand the talks about scaling back revenue sharing are going to be a big story this session. Seems like MLB is taking steps backwards in the area of competitive balance.

    I have very little faith that MLB and the union have the ability to work some of these big issues out without top-level turnover and outside arbitration. A good first step would be for the owners to appoint a real commissioner to allow the office to recover legitimacy. Roger Angel? Pete Gammons? Frank Robinson? Someone who knows and loves the game and isn’t a suit-wearing shill. I hear the NFL is looking at Bush Boy jr. (Jeb) to fill their commissioner role. This would be as ridiculous as was the hiring of Dennis Miller and Rush Limbaugh to bring their special brand of hostile ignorance to the games we love. I suspect many fans are like myself and love taking in a game partially as a way to temporarily shut out that distressing aspect of modern life.

    Finally, regarding Bowden, couldn't happen to a nicer guy. Jackass scum. I hope he and Dan O'Brien get stuck in an elevator for a month and have to resort to mutual cannibalism.

    Talk again soon. Like you I have gotten busy again lately with the begining of the semester and teaching duties. My flagging attention to the Reds makes me feel vaugely responsible for thier recent swoon. I am sure they tend to win more often when I watch their games.


  2. Good points from both of you. It really does seem to be a shame what is happening with this new CBA.

    I have wondered how badly the success of "smart" teams like the Twins and the A's have hurt efforts to increase financial parity. I guess we're seeing the answer to that right now. I know that players want to make big money, but it would seem to me that there would also be interest among players in keeping teams as evenly balanced as they can so that more players have a chance to win. The revenue sharing in the previous CBA was a step in the right direciton, and I agree with you guys that it looks like we're going to take a step backward this time around.