I am already exasperated, and it has been only two days since the start of the lockout, but not for the knee-jerk reasons that most with think. Sure, the lockout is a (temporary) downer, which I will return to below in some detail, but is the needless groaning about the payment of deferred contracts that begins this missive.

Every July, the news circulates about the seemingly never-ending annual payment of $1.2M to Bobby Bonilla, who has the pleasure of being an annual millionaire for watching TV and munching on Doritos. With the rare MLB lockout here and an intense focus on player/owner/MLB relations and money, the grumbling about contracts, the deferment payments make for great fodder to moan over. Let’s all stipulate the obvious, no aspect of entertainment, including baseball, has the intrinsic value of the actual transacted money. No actor is worth $30M to play some make-believe character to kill 90 minutes of our day. Let me also add that in states with NCAA Division 1 Football Bowl Subdivision teams, the head coach is almost certainly the highest paid state employee – and by a mile. For whatever reason, our culture has placed premium value on meaningless recreation (and advertisement) at the expense of curing cancer, or teaching kids, or collecting garbage, all professions that have much more visceral meaning in reality.

With this in mind, teams themselves make the decision for setting up a deferred payment structure for their advantage. No team sets up such a relationship to handicap themselves. The structure may be to free up more money immediately to purchase the contract of another player, or it may be to drive the annual cost down. The player signs a contract to be paid according to the details for services rendered during the time of the contract. In Bonilla’s case, the Mets set this up when they were “making” money hand-over-fist with Madoff. The 25 years at $1.2 was a pittance relative to investment returns for the Wilpons. It literally was cheaper to pay him $25M over time than the value of $6M at the time it was due. Bonilla agreed to the deferment and for the delay in getting paid, settled on 8% interest. It is nothing but business. None of this is on Bonilla. We all can agree that the money involved in baseball is egregiously misguided, but so it is. I did a quick math problem for Scherzer this year with the idea of 110 pitches per game and 30 games started. At these numbers, he will make $13,000 every pitch.

All that being said, the players are using the power of their union to make a better situation for all players, not the Scherzer’s of the game. We all know owners would pay players peanuts if they could, while collecting the gigantic sums of revenue the game brings and stashing in tax-free Swiss bank accounts. In Queens, it is easy to imagine the Mets wanting to pay players in “Mr. Met dollars” redeemable only in stadium concession stands. No worker or union would find that acceptable, nor should they. We all know what a creep Comiskey was; don’t kid yourself, it still continues today.

Since the start of this blog more than a decade ago, some aspects of baseball have changed dramatically, which readers here see all the time: more-and-more metrics, like WAR, more-and-more home runs, more-and-more strike outs. As far as players go, there are two undeniable changes to the game: (1) prospects have more value than ever, and (2) major-league rosters keep getting younger and younger. This is strongly at a divergence with the past CBA, which gives a lot of team control on young players (read cheap), while not placing demands to keep older, more expensive, free-agent players on the field. Consequently, teams want to stack rosters with cheap, good, young players (e.g., Rays) and not invest in aging (30+ years old) free agents. The flip side are teams like the Dodgers (and now the Mets) with unlimited resources, all of which is creating a sport of “haves” and “have-nots”. Around here, any reader will recognize the importance of player merit given the amount of metrics that are tossed around, such as WAR.

In valuing player contracts, we all regularly place value in terms of WAR. The general average of value per WAR is about $4M (although this value is deeply flawed as it is generated inclusive of fixed contracts). The way the game has gone with getting younger, is that for many teams a vast amount of team WAR is generated by platers still under team control. Look at the 2019 Mets, the top 10 players generated 40.2 bWAR, led by Jacob deGrom with 8.4. After that you have Pete Alonso, Jeff McNeil, Amed Rosario, and Seth Lugo generating ~16 bWAR on essentially league minimum contracts totaling < $3M (that had a value of ~ $65M). In fact, the top 9 bWAR generators were all players under team control. Does that seem fair based on merit? The players seem to want to reach free agency earlier to take more advantage of the prime years. Everyone wants that 27-year-old free agent, and few want a 32-year-old free agent (in most cases). Owners want to control prime years while still under team control when costs are quite modest. Players would like to see the floor for team payroll increase so that teams are less likely to tank. Seems reasonable. Yes, teams develop players, and they are big investments – but is this really true? Most signing bonuses are relatively small, and you cannot show me a single minor leaguer that thinks salary is something special. Finally, teams are taking more care of minor league professionals, but this is not a huge financial stake. To me it only seems fair to develop a CBA more aligned with metrics than simple service time. The present model pays peanuts for players in their prime when value should be high, and encourages teams to pass on super expensive free agents as they age. Players in their prime deserve to be treated better. The last aspect of the negotiations centers around players that emerge late in their career, like McNeil. He will not be a free agent until 2025, when he will be in his mid 30s. Virtually all of his WAR will be generated as a player under control and may not even get a free-agent contract. In not being able to reach free agency because of service time, he will earn a shockingly small amount of money for a player that seems to have reached everyday status. Owners love to tinker with service time to control players longer (e.g., Cubs and Kris Bryant), or flipped pay players less. The game has changed dramatically towards valuing youth. It is time for the owners and the MLB to recognize this, agree to some adjustments like lowering time to free agency, lowering the time to arbitration, and adding a payroll floor so that players can capitalize during their prime years and the sport can be more competitive.

10 comments on “It’s time for the MLB and ownership to step up

  • Metsense

    Adjustments to lowering time to free agency and lowering time to arbitration are two sticking points with the negotiations. MLB has always had a six year of playing time length to achieve free agency. MLB has manipulated this and it resulted into the Bryant Grievance, which the MLBPA lost. A possibe compromise is to stay with the six year timeframe but one day on the major league roster during the year would be counted as one full year. Many players have been up and down for more than six years but they haven’t accumulated six years of playing time to get to free agency. This way more less-accomplished members would reach free agency sooner and would end the manipulation of stars like Bryant. It would be a concession for the owners.
    The issue of the arbitration player a primary importance of the owners because they want to contain their cost. Instead they should compromise to have fixed step salary raises for pre-arb years #2 and #3.
    The six year free agency and three year arbitration would appease the owners but the change in the way of counting playing time would effect more members of the union (and not just the stars) and the fixed step salaries would effect all union members.
    Remember, all successful negotiations needs compromise and it makes the parties feel that they got something.

    • Name

      “A possibe compromise is to stay with the six year timeframe but one day on the major league roster during the year would be counted as one full year. Many players have been up and down for more than six years but they haven’t accumulated six years of playing time to get to free agency.”

      This wouldn’t solve manipulation as it would just prevent any midseason promotions for prospects.
      Instead of calling up a prospect to fill in mid-season some teams will just opt to keep them down all season and not debut them until the following year because they wouldn’t want to lose out service time. One day debuts & short call ups wouldn’t be considerations for teams because it would cost them a full year of service time.
      Unless players can become Free agents midseason, there’s always going to be a way for teams to extract the most service time from players which could be construed as manipulation.

      And it might be weird, but maybe that’s a possible solution – mid season free agents. Hit x number of days on a MLB roster and bam you are instantly a FA, even if it’s mid-June or mid-August. If a team wants to prevent that maybe then the year before you need to lock the player up or the player can choose where he wants to head to next in the middle of the season.

      • Metsense

        The Mets using 64 players last year, Braves 38, Phillies 55, Marlins 61 and The Nationals 60. Everyone of these players would be credited one year player time. There are only 26 active roster spots so been hard to manipulate when there need for so many players. For the union, all these players been benefit.

        • Name

          Service time considerations are only relevant for top prospects,

          Back in 2015, if your proposal was in effect, the Mets probably wouldn’t have called up Conforto on July 24th and instead kept him in the minors for the rest of the season because they would have lost a year of control in exchange for 50-60 games.
          Rosario wouldn’t have debuted Aug 1 2017, they would have delayed his debut until April 2018.
          On the flip side there would be instances of prospects making teams out of camp instead of waiting 2 weeks like Bryant, Kelenic so it will help in some cases but overall you’d still see a lot of delaying prospect arrivals as no top prospect would be debuting after May-ish as the team would be losing out on too many service days.
          You’d also see the top guys get passed in favor for lower tier guys, like a Megill, in terms of mid-season promotions, which i guess might be a good thing because the top guys are probably more well off anyways

          So my point is that maniuplation is stlil possible.

          • Brian Joura

            I don’t agree with your speculation about Conforto here at all. The Mets called him up in July because they were trying to win. I think you’d find examples of clubs who were not in the playoff hunt who wouldn’t call up guys in September if this was the model. But we’re dealing with no perfect solutions. Is Metsense’s proposal better than what we have currently? I dunno – we’d have to do research on the number of guys likely to be penalized before we make that call.

            Unfortunately, Megill was the top guy available for the Mets to promote.

            • Name

              I’m sure we could debate 2015 Conforto for hours on end, but it would irrelevant to this discussion.
              I hesitate to call any proposal a “solution” because it seems unlikely there is an answer to the service time problem. Like you said, any option is just going to shift the puzzle pieces around. Any change is doubtful to meaningfully shift the status quo.

              And maybe a change for the sake of change, even with no real effect, will be enough to placate both sides and get a deal done and we can kick the can down the road to the next CBA.

              • ChrisF

                I think they should go to some formula that moves away from service time. That is completely controlled by the team. leaving zero recourse for the player. I also don’t believe there is all that much investment in “developing players”. Salaries are peanuts and cracker jacks. They travel in buses. Until now, the allowances were trash, and you’d get 6 guys living in a 3 BR apartment. Sure you get coaching, but minor league hitting coaches aren’t making a ton of $ either.

  • T.J.

    There are many many issues for these parties to resolve, and there is little to no motivation to do anything until February at the earliest. So be it…we’ll see how much of 2022 does not follow a “normal” MLB schedule, and we’ll see how “financially offended” the customers are if games are missed.

    Economics/money is/are always at the forefront, and there certainly can be improvements to the current system whereby guys make peanuts (relatively) their first three years and then are “owned” up to six years. I do have an exact solution, but there should be some combination that benefits players and is financially tolerable to teams –
    – raising league minimum and having a step up for 2nd and 3rd year pre-arb (for example $750k, $1M, $1.25M). This would appeal to a large amount of union members, and would essentially shouldn’t increase total payroll but be financed by offsets to “older” free agents (past prime).
    – allow for some type of “high performer” exceptions (fWAR?) that could bump years 2 and 3 (say to $2.5 million and $4 million) for a small handful of “younger stars”. This would create some “smoothing” of compensation vs. production, at least somewhat for the glaring exceptions.
    – create a formula that combines age with years of service to reach free agency. Something that could be staggered that takes into account age at signing/minor league time/MLB time and would somewhat discourage a holdback for control.

    Nothing will be perfect, but like competitiveness, it could “refine” the current compensation and control model, addressing some player concerns while allowing the teams enough control for long term player development investments.

  • ChrisF

    – create a formula that combines age with years of service to reach free agency. Something that could be staggered that takes into account age at signing/minor league time/MLB time and would somewhat discourage a holdback for control.

    I agree with some formulation for controllable years. Service time alone is entirely a benefit to owners.

  • TexasGusCC

    Well presented Chris. I believe WAR is valued at $6MM while Fangraohs has for years claimed it is worth $8MM without proof but rather just trolling the public.

    I have read the owners have proposed a salary structure for all players based on WAR, but obviously the players refused because it hurts the free agency system. It would be cool to see say a Mookie Betts earn $65MM, but McCann for example would only get the minimum, not his $10MM.

    Also, the owners have proposed that all players can become free agents regardless of service time at 29.5 years of age.

    Nice starts, but I don’t see any way for avoiding tanking – which I hate also – and also for changing the pseudo cap of the luxury tax.

    I like the idea of having the draft manipulated so no team feels they have an edge by trying to lose. In fact, I like the ping pong ball show out on by other leagues but I would give the worst team an even less chance of getting #1 than those teams do. I’d like to see a floor and a cap, but like the slotted system of the NBA.

Leave a Reply to Metsense Cancel reply

Your email address will not be published. Required fields are marked *

The maximum upload file size: 100 MB. You can upload: image, audio, video, document, spreadsheet, interactive, text, archive, code, other. Links to YouTube, Facebook, Twitter and other services inserted in the comment text will be automatically embedded. Drop file here