Robinson Cano and the new economic landscape for players

When the Mariners signed Robinson Cano to a 10-year, $240 million deal following the 2013 season, it sounded like an awfully big contract, both in terms of years and dollars. Cano’s been worth his deal in the first half of the contract but now Seattle is trying to get out from under the remaining five years. Can’t blame them for that.

The Cano contract was an example of how the system sort of “worked” for the players. No one shed too many tears when Cano, before he was eligible for free agency, gave the Yankees a Dollar Value of $38 million while collecting $9 million in actual salary back in 2010. The balance was that the club would come out ahead early in a player’s career, while if the player was good enough to be productive through his arbitration years, he would get rewarded with a big contract in free agency.

But that balance is now mostly gone, as clubs don’t hand out big contracts in free agency as a regular occurrence. Sure, Bryce Harper and Manny Machado should come down with great contracts. But how many others will come close to Cano’s AAV of $24 million? Or how many five-year or more deals will be signed?

And that’s not horrible in a vacuum. Clubs shouldn’t hand out eight digit, guaranteed deals to guys in their 40s when they sign them in their early 30s. But since this new economic enlightenment is now the way the offseason game is being played, baseball needs to address how it compensates players earlier in their career.

We see too much of clubs manipulating when a rookie gets called up, as they’re more interested in getting an extra year of control and avoiding Super Two status then they are fielding the best team possible. And the arbitration process binds players to their club – at a higher, but still below-market rate – for several years. Is it too long? Maybe, maybe not. But all of those things need to be addressed in the next CBA.

The MLBPA has come under fire for not correctly reading the tea leaves and doing a better job of protecting the interest of the players in this regard with the last labor agreement. Instead, the union seemed to focus on days off for players and ensuring greater enforcement of start times on getaway days. Without a doubt, those things have value. And they benefit everyone in uniform, not just those lucky enough to play long enough to reach arbitration or free agency. But it’s hard to view what they won being worth what they lost.

The current CBA goes through the 2021 season, so it’ll be awhile before the players can address the new economic realities. Hopefully that gives them enough time to come up with a strong plan. But at the very least, their new plan should address service time manipulation and how long until players are eligible for free agency.

One of the challenging things facing the union is how to come up with a different plan, given the different roles that players have. A starting position player may play 150 games, while a reliever on the roster all season might get into 60 games and a starter will only appear in around 30. Perhaps they can come up with some type of hybrid, where they keep some version of the current service time rules for arbitration and free agency, while also introducing benchmarks that would allow the best players to get paid sooner.

Something along the lines of once a position player accrues 164 games played, he’s eligible for arbitration. Which means virtually everyone who is a regular starter would be eligible after their second season. And it could be 90 games as a reliever or 40 as a starter as thresholds for pitchers. And then say that arbitration lasts for two years before a player becomes a free agent. So, the top players would be under team control for four years.

And if that’s not long enough, you can borrow an idea from football where a team can get an extra season of control by signing a player to an additional year based on some pre-determined benchmark.

Let’s use Michael Conforto as an example. Conforto made his 164th start in 2017, meaning he would have been eligible for arbitration prior to the 2018 season. Under the current rules, Conforto is eligible for arbitration for the first time right now. So, Conforto would have reached arbitration a year earlier. The current rules have Conforto as a Met through the 2021 season, when he first becomes eligible for free agency. Under this proposed plan, Conforto would be a free agent following the 2019 season, as ’18 and ’19 would be his two arbitration seasons.

But the Mets would have the opportunity to gain an extra year of control if they guaranteed Conforto some set salary for an additional year. Prior to his first arbitration season, the Mets could sign him to a three-year deal at some benchmark – say the 10th-highest AAV salary among MLB right fielders. Or after his first arbitration season, they could sign him to a two year deal at some higher benchmark – say the 7th-highest AAV salary. The exact position of the benchmark can be tweaked to whatever makes the most sense. But this is a framework that would allow teams to keep their stars for five years while paying them closer to a market rate.

Perhaps innings rather than starts should be what the threshold for arbitration is based upon, to avoid manipulation by the clubs. The goal for the union should be to avoid the loopholes that currently exist. If Peter Alonso is the best choice at first base for the Mets, he should be there on Opening Day, not three weeks later because it’s more advantageous for the club that way.

The next CBA should contain no incentive for clubs to keep players in the minors, and it should get players to both arbitration and free agency quicker than they do now. This will allow players to get paid more during their prime seasons and still reach free agency while they have multiple productive seasons left in the tank.

14 comments for “Robinson Cano and the new economic landscape for players

  1. Chris F
    November 28, 2018 at 11:33 am

    I like the idea of service time at a more granular level as you propose. I can see one issue though, and that deals with DL time. How do you apportion that as service time now accrues when a player is on MLB DL?

    Nevertheless, I believe you are totally correct in asserting the next CBA should address the “game is getting younger” reality. It will cement the diminishing FA contracts as being a thing. The idea of working to FA for a payday is a mindset that will have to change throughout the industry. From a game of baseball perspective that makes sense, but Im not so sure 30somethings will love this too much.

    As for Cano…I dont see this getting done without the control years of Diaz and the wildly reduced salary per WAR (projected of course). I cant see enough productivity out of Mallex Smith to eat a ton of Cano’s contract.

    • November 28, 2018 at 1:10 pm

      DL time is not an easy issue. I guess in my proposal keeping the existing structure along with the new trigger points for arbitration, injured guys would be no worse off than they are now – they just wouldn’t reach arb as early as their healthy counterparts.

  2. Name
    November 28, 2018 at 1:25 pm

    Unless the MLBPA is willing to go on strike, why would the owners agree to less years of control at a higher salary?

    At the end of the day, what the player’s association really cares about is total salaries, as long as it’s rising they really don’t care how it’s allocated.

    As Chris F noted, service time has to be based on days, not starts or innings because of DL guys and for bench guys. But whatever new rule you create, there’s always going to be a best way for the team to play within it. No matter what, there’s always going to be a time where you “Don’t call up a player up between date x and date y”. Right now, that just happens to be Opening day and 15 days after that. If you make arb cutoff at day 174, then the new dates will be sometime in mid-September, which would cause teams not to promote September call ups.

    • November 28, 2018 at 1:21 pm

      The MLBPA has to be willing to go on strike. Or at least give the appearance of being willing to go on strike. Owners aren’t going to make a concession of this magnitude out of the goodness of their hearts.

      But you can certainly make the case that they should. They’re making more money than ever now with labor peace. Do they really want to risk that cash and goodwill over this issue? Maybe they do. Or maybe they can use this issue to get concessions from the players on something they want. More drug testing or the abolishment of the DH or greater discipline powers over off the field violations.

      • Name
        November 28, 2018 at 4:04 pm

        Actually your proposal is more of a inequality issue rather than payroll issue. Does MLBPA care that its top 1% make 25% of the money and the bottom 90% make 25%? Or do they just care that year over year, the total combined salaries that get paid is increasing.

        From sportrac average team payroll: https://www.spotrac.com/mlb/payroll/2018/

        2018: 139 mil
        2017: 141 mil
        2016: 134 mil
        2015: 129 mil
        2014: 120 mil
        2013: 110 mil
        2012: 104 mil
        2011: 101 mil

        • November 28, 2018 at 5:02 pm

          Well, that’s only part of the equation. What was the revenue of the clubs in that time frame? While salaries were the second highest in that eight-year sample, I’m guessing that as percentage of total revenue, that it was fairly low, possibly the lowest.

  3. Pete In Iowa
    November 28, 2018 at 2:20 pm

    I’m not so sure anything needs to change to a great degree.
    If it is true “the game is getting younger,” then most of these “problems” go away. Look at Harper and Machado, for example. And others such as Trout (if he hadn’t signed long-term early), Lindor, Acuna, etc, who are (were) good enough to make it to the bigs around 20 and will be set with huge FA deals in their mid-20’s. Bottom line — if the player is good enough to make it early on, he will indeed get paid. Perhaps there should be some sort of accommodation for college players, who obviously, can’t get to the majors much younger than 23 or so.

  4. Eraff
    November 28, 2018 at 3:11 pm

    The idea that “the game is getting younger” is much more about careers ending sooner than they did when steroids and uppers were in full availability, along with statistical analysis and financial analysis (same thing, really) about player valuations and the attractiveness of young and lower priced players.

    The spectacular and young have always had a place..always will.

    The reality is that shorter careers mean that fewer guys are will be getting paid….. there will be a growing voting block to go on strike. This will be settled by the interests of all parties wanting continued income. There’s way too much money to shut off the faucet.

  5. November 28, 2018 at 4:43 pm

    You mention that mega contracts aren’t handed out anymore, but player salaries are rapidly climbing high, still reaching a number of years and now incorporating opt-out clauses so they can dip into free agency yet again.

    I’d be happier seeing all of the money tied to the game, including into the owners’ pocket, go down. Why does everyone have to get rich while a family of four has to spend $300 for tickets and food/beer to have a day out?

  6. MattyMets
    November 28, 2018 at 10:35 pm

    Terrific post. Would be nice if the next agreement took fans into consideration. Poor Toronto Blue Jays fans are dying to see Vlad Jr. And instead paying fairly high ticket prices to see a bunch of nobodies on a non competitive team while Vlad beats up on triple A competition. Thing is, where’s the cost benefit analysis on that? Isn’t the team losing money on ticket sales while playing the arb clock game? That’s the big piece that I see missing in baseball right now. With all the numbers crunching of stats and salaries franchises don’t seem to be factoring in the turnstiles. Maybe Van Wagenen can enlighten the Wilpons on how the talent on the field can help sell tickets (and parking, concessions and merch).

    • Name
      November 28, 2018 at 11:34 pm

      I think you’re vastly overestimating the economic impact of a top prospect. At best, attendance might be increased the first few days before the allure wears off, at worse, the impact is 0 and is not a factor in a fan’s decision to come to the game.

      For example, Harvey’s home debut drew just 25k fans and they drew 29k the day before, and that’s for a starter. I don’t think any Braves fan would say the deciding factor to come to a game this year was Ronald Acuna.

  7. MattyMets
    November 28, 2018 at 10:48 pm

    In time, older players are going to be getting one year contracts more than ever. And older will no longer mean 36+ but more like 33+. Smart/lucky front offices will take a flyer on the right guy who has that one great year left in the tank. Patriots have been doing that in football for years. I don’t mean a guy like Curtis Granderson, who someone wil sign for a modest one year deal, but how about Nick Markakis who had a very good year? Due to his age no one will give him a multi-year contract. Nelson Cruz is another example. When the new CBA is discussed the age issue will come up and that might open the door for the *gasp* NL DH.

  8. November 29, 2018 at 4:31 pm

    Yes, Matty…absolutely on target….and I’m more in favor of very large annual salary with shorter time frame.

    Once a player takes up big portions of salary, you begin to wash out bench strength and depth.

    If you’re adding a Big Number to a ready roster, you may as well go bigbig…but keep it shorter. Massively overpay while you can plan on winning.

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