Well, this is a ridiculous notion:
Major League Baseball, the players’ union, the Diamondbacks, and [Juan] Cruz’s agents are in discussions to facilitate a sign-and-trade involving Cruz while adhering to the collective-bargaining agreement.
Free agents cannot be traded before June 15 without their consent, but the union will permit Cruz and other Type A players to waive that right in advance, according to Rob Manfred, baseball’s executive vice-president of labor relations.
That’s Ken Rosenthal, passing on a notion first floated by LaVelle Neal of the Minneapolis Star-Tribune. All of the wailing and moaning about the plight of the remaining Type-A free agents with draft picks attached to them is ridiculous, as if they were somehow victims of an unfair system. It might be unfair, but if so, it’s that way by design. The free-agent compensation system, which dates in various forms back to 1981, is designed to lower the demand for free agents by adding to the cost of signing them. At first it was player compensation; now, it’s draft picks. In any case, the idea is to make free agents less desirable.
In 2009, it’s not that the system hasn’t worked, it’s that it has worked, and it’s worked beautifully. We’re so far removed from the original arguments over free agency that we’ve forgotten that the point of compensation is to restrict the market. Owners wanted a mechanism that would make it harder for players to move around, lower the financial costs of signing them, and provide something in return for losing them. My god, there was a strike over this, because the players recognized that free agency with compensation wasn’t free agency at all.
For years, this didn’t matter very much because the industry operated at well-below peak efficiency. Teams would sign Type-A free agents and give up their first- or second-round draft pick because they didn’t adequately value either item. Many, even most, free agents will return less than what it costs to sign them, and they’ll decline over the time frame of a deal. High draft picks are gold, a teams’ best chance to secure low-cost, high-value talent through its peak years. Over a generation, the perceived values of each of those things have gone in opposite directions, and they crossed paths this winter. Now, most teams would rather have the draft pick and the cash than the veteran player. This is new; it was just a few years ago that the Giants signed Michael Tucker before the Royals even had the opportunity to decline to offer him arbitration, because they wanted to forfeit their first-round pick.
The thing is, you can’t change the rules because they’re working too well. We talk all the time about the Law of Unintended Consequences. This ain’t that; this is the Law of Intended Consequences. Free-agent compensation rules are designed to lessen the demand for free agents. Well, this is what less demand looks like, and while it isn’t fun for Orlando Hudson or Juan Cruz or Orlando Cabrera, to make a change now would have effects that we can’t see, while also being unfair to those free agents and teams that reached agreements under the current understanding.
Think about the teams that signed Type-A free agents and who will now pay for that signing with draft picks. Had they waited, perhaps they would have been able to acquire those players without sacrificing the picks. The Yankees signed three Type-A free agents at a cost of their top three draft picks; no one feels sympathy for them, but a post-facto change in the rules would negatively affect them. The Angels gave up their first-round pick to sign Brian Fuentes; the Mets coughed up theirs for Francisco Rodriguez. How is it at all fair to these teams to make them lose a draft pick, but not do the same for the teams that end up acquiring Cruz, Hudson, Cabrera, or Ben Sheets, all of whom are governed by the same clause in the CBA?
Think also about the effect on the players who signed. Would Derek Lowe or Oliver Perez have held out a bit longer if they’d known that eventually the draft pick hanging from their necks would be removed? Would Jason Varitek have had better options than returning to the Red Sox? You’re penalizing those players, all of whom tried to sign as free agents requiring compensation, by changing the rules after they reach agreements. We know that the market for these players was hampered in part by the need to give up a draft pick by signing them. Don’t they have a right to be free agents under new rules that take that cost away?
The MLBPA, in allowing advance waivers, is trying to address the problems some of its members are having. Their intentions are good, but doing so would be to undercut the interests of its members that made decisions under the rules of the CBA. That Perez and Lowe and Fuentes and Rodriguez reached deals where Cruz and Hudson and Cabrera have not should not end up benefiting the latter group. It just happens that the demand for their services isn’t enough at the cost of a salary and a draft pick. As I say, the system is working.
This would also set a terrible precedent for future offseasons. If owners and GMs know that these “sign-and-trade” deals will eventually be available, then they have every incentive to lowball free agents deep into the offseason. A situation that is largely coincidental this year would become the result of a strategy in future seasons; why sign a player on January 8 and sacrifice a pick when you can wait until March 8 and sign him for the cost of an inconsequential prospect? It would also affect the decisions to offer and accept arbitration, as the risks and benefits of doing so will have changed for both player and team. Players should be more likely to decline arbitration, knowing that they might eventually be able to sign without their new team giving up a pick. Teams should be less likely to offer arbitration, because while players are more likely to decline, the prospect of getting a pick when the player changes teams is reduced.
I play in a perpetual fantasy league, a good one, in which there was a huge controversy heading into the second season having to do with the salaries of players taken in the minor league draft. After the rules were set one way, it was proposed to change them as we headed into the second season, effective immediately. I fought hard against the change. The details are unimportant, but the principle carries over to this situation: you can’t change the rules midstream when decisions have been made based on the old rule set, and the rules are working as intended.
Free-agent compensation is designed to lower demand and the prices paid for free agents by introducing a cost over and above the salary. All of the Type-A free agents previously offered arbitration who signed this offseason have had to deal with that cost attached to them, and that cost affected what they earned on the market. The teams signing those players have had to deal with the loss of those draft picks. While you might feel for the remaining Type-A free agents, their free agency isn’t some accident of fate that needs to be accounted for; it’s what happens when the system works. The free agents are simply going to have to sign for a salary that makes the total cost of acquiring them-draft pick included-worth it for the signing team.
The MLBPA should not change its rules, because doing so would be unfair to everyone who played by them.
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Plus, the players can quickly adapt to this. Next off-season, I suspect more players will accept arbitration as a result of this lower demand for free agents. As a result, the ntext off-season after that fewer teams will offer arbitration, and we\'ll back back where we were before, but without compensation.
Let the system work, people.
The system that ranks the players may also need to be re-evaluated. In the long run, that Cabrera and Cruz are Type-As could be a bigger problem than what to do with them.
There are 2 reasons to do a sign and trade: if there is a big chance the player will be signed by no one or if they receive more value than 2 picks in a trade. It would make no sense for the signing team to give up more than 2 picks of value; I cannot see a scenario where that would happen.
Also, the system clearly has not worked in establishing the true values of type A and B free agents, especially for relief pitchers (and washed up catchers).
I think Joe was saying the overall free agency system is working well, though the Elias rankings of Type A and B free agents is obviously and significantly flawed.
Kinda like the MLBPA\'s intention to destroy all the confidential (and supposedly anonymous) drug test samples from the 2003 survey testing? That worked real well, didn\'t it, Mr. Fehr? The Players\' Association leadership is failing its members.
The power in this deal is still held by the Diamondbacks. They can refuse to negotiate, but if the cost of a first round pick is more than a team is willing to surrender, then Cruz or Hudson will go unsigned, hurting both the Diamondbacks and the player. The MLBPA is simply putting one more tool in the team toolbox. Football has done the same thing with the franchise tag, although the sacrificial picks are so valued in the NFL that a franchised player cannot change teams without a trade.
I don\'t think you can count on the MLBPA to be this cooperative every year. I don\'t think you can count on teams or players to want to work this type of deal (essentially becoming a three-entity negotiation for \'free\' agency). Thus, it seems more like a gaming of the rules than a rule change, and rule gaming happens all the time.
You seem to contend that a rule should be kept in place whenever two conditions are satisfied: 1) the rule is accomplishing its original intent, and 2) changing the rule would disparately impact different people. Your argument proves too much; there are lots of imaginable rules fitting both these criteria that should nonetheless obviously be rejected. Suppose there were a rule that all BP writers had to be thrown into a well, with the intent of keeping them from enjoying the sunshine. This rule would accomplish its goal! If Will and Christina had already been thrown in, should we go ahead and throw you in too, for fairness sake? Would setting you free be wrong, because of some negative post-facto impact on them? Obviously, meeting these two criteria isn\'t good enough reason to keep a rule.
Moreover, you sidestep the important question of whether the original intent of the rule was actually something that should be done to begin with. In this case, the original intent was to protect owners from paying the actual value of the services they\'d like to procure, merely by shuffling draft picks amongst themselves. Why should we care that a rule is accomplishing its purpose if the purpose ought not be accomplished?
The current situation is an artificially created market inefficiency. Players like Cabrera and Hudson--men who\'ve worked their whole lives to compete at the highest level and are by all accounts worthy of an MLB job--can\'t get a contract because the anvil of a lost draft pick is being hung around their neck. The situation is manifestly unfair to them. The effectiveness of the rule does nothing to mitigate the fact that it\'s unjust.
It\'s easy to see how players who signed earlier in the offseason might be upset by a sudden change in the playing field, but they wouldn\'t actually be any worse off than if nothing changes. It isn\'t as if letting Juan Cruz have a sign-and-trade deal will actually cut Jason Varitek\'s paycheck. Teams who signed free agents and gave up draft picks this offseason might have a legitimate beef, but it seems to me their ire could just as well be directed at an unfair system as at whatever team lands Cruz.
The MLBPA should change its rules, because not doing so would be unfair to players who have to play by them.
The fairness of the rule really doesn\'t seem (to me) to be overly relevant in this case. After all, they players themselves (through the MLBPA) negotiated them. If they don\'t like the rule, they can discuss it the next time their contract is up. I don\'t see how you can have a hand in making a rule, and then turn around and say it\'s not fair.
I\'d also note that I don\'t see how this particular rule is unjust or unfair to the players in question. After all, ALL MLB players fall under this rule. Everyone has the same likelihood of getting pinched by it. I would say that the rule, as written, sucks, but that doesn\'t make it unfair to Varitek et al.
Just my thoughts.
I also doubt whether something being accepted by MLBPA really means that the players in question consented to it. Suppose you were Orlando Cabrera. You have a rare skill worth a few million dollars and modest fame in the marketplace, but due to an arbitrary scheme dreamed up by the cabal that monopolizes that skill, you may end up taking fifty grand to play in some independent league instead. Given that your skills will deteriorate before the next CBA, bringing it up for the next contract is cold comfort.
I for one really do hope this compensation method is eliminated or changed, precisely for the reasons you cite, Joe. That, or stop having Bavasi... er... Elias rank free agent compensation. Does the CBA allow the MLBPA to have a say in *how* players are ranked?
The other players who signed either judged the market just fine or accepted what may have been a less than ideal contract to their satisfaction. There\'s a legit argument that Varitek could have gotten a better deal if he didn\'t come attached with the frfeiture of draft picks.
I can\'t exactly feel sorry for guys like Cabrera and Hudson who helped bring this situation upon themselves. And I\'m not in favor of bailing out people who made poor decisions at the expense of people who made better decisions.
But I think you more than anyone would agree with that. It\'s not your point. Your point is that it\'s unfair to change it midstream, and I wasn\'t considering that. But tballgame may be right if it\'s already within the rules. It could change the game significantly and hurt free agency even MORE, as you\'ve outlined.
Joe, would you recommend that the union push for removing this draft pick compensation at the next CBA negotiation?
It\'s not the players\' association that would be hurt by this. As usual, the players appear about to outsmart the owners.
If the D-backs simply refuse to sign-and-trade Cruz, his choices are limited. If no other team wants to give up a draft pick for him, he\'ll have to go back to the D-backs for the minimum (or play in an independent league until June and hope somebody offers more than the minimum then.) This was exactly what the owners tried to achieve by collusion 20 years ago.
The other owners should be on the horn to the D-backs telling them not to budge; they\'re winning one for once. But baseball owners have proven so many times who the real brains in the game are.
Why would you change a rule that was working? Especialy, if it will adversely effect those that played by the original rule.
True, changing the rule now wouldn\'t take money from Varitek\'s pocket. But, maybe Varitek could have earned more from another team if the other team had been permitted to do a \"sign-and-trade.\"
And what does it matter what Varitek could\'ve done in some hypothetical case? Yeah, he could\'ve earned more in a free market; let\'s change the rule so other people don\'t get cheated too.
It\'s perverse to use the fact that some people have been robbed to argue that everyone should be robbed.
I think you need a better metaphor.
Having said that, I agree with Joe\'s comment that Type A free agency was instituted for a reason, although I would not say the only reason is to depress the market for free agents. It is also to promote competitive balance and provide some reward to small market teams who lose their players after 5-6 years to the big market teams.
As the article reads, the only rule change being considered is the one that prohibits a team from trading a free agent signee before June. I don\'t see anything wrong with letting the team that is losing the free agent have an exemption from the rule by mutual agreement with the player. The team still will get compensation in the trade and the purpose of the rule will be supported. If the team does not want to agree, and wants to hold out for draft picks, it can do so.
And MLB doesn\'t allow draft picks to be traded, so that\'s not an option for the signing team.
#Arizona says, we\'ll facilitate Cruz\'s signing if we get a player traded to us.
#Cruz says, I\'ll waive my right to block a trade, if Arizona facilitates a trade.
#The third team says, I\'ll pay Cruz and Arizona if I get Cruz\'s services.
All voluntary, all in line with existing rules. The only strecth seems to be that a player hasn\'t waived such rights in a contract, but why shouldn\'t it be a negotiable chip?
I\'m also not sure what the Diamondbacks are doing about trying to sign Cruz. If they are not even trying to sign the guy, then I argue that the rule is broken (unintended consequence) since it is intended to keep the player on his former team. If they are trying to sign him, then they should refuse to agree to the trade concept and keep working toward a team friendly deal and nothing changes from before.
And lastly, most of this isn\'t against the rules. As I understand it the player is given the right to sign and then not be traded until June 15. It would then also be their choice to waive that right. I think part of why the union is getting involved is because normally the union is against players waiving any rights they have worked hard to earn. The only part that would be bending (if not breaking) the rules is the part (which is not mentioned in the article) that the team would HAVE to trade him during a window or he becomes a \"free\" agent again. That part should probably not be allowed.
Plus, if there was a team willing to give up Type A value for Cruz (or whoever), wouldn\'t they have already done so?
after declining arb, he\'s a FA- so it strikes me as odd that the backs would negotiate a deal for a player not even under contract to their team. can they even negotiate with another team before he is on a roster or something? do they negotiate their salary offer with the other team and then see if cruz agrees? does the other team deal with cruz directly but then offer players when amount is in place?
note to middle relievers everywhere- you\'re fungible.
The D\'Backs need some relief, no pun intended.....
Furthermore, is anyone in baseball upset about this?
When Bobby Abreu gets a 1-year, $5m deal, the Orlando Cabreras, Hudsons, and Juan Cruz\'s of the world simply aren\'t worth very much. There\'s no need to change the rules just because they won\'t accept that.
Cruz can be signed by anyone at the cost of a draft pick.
-Except Arizona can sign him, since they lost him, and not lose a draft pick.
Cruz can always accept a trade.
So the problem isn\'t the sign and trade, the problem is the sign and got stuck with Cruz. The D\'backs want to be able to sign Cruz to a ten-day option to trade him, but not be on the hook for millions if it doesn\'t work out. I don\'t see anything wrong with a player allowing himself to be traded, allowing the teams to pretend that players are free agents when the only way they can change teams is to sign for less and beg for transfers is a bad thing.
\"The free agents are simply going to have to sign for a salary that makes the total cost of acquiring them—draft pick included—worth it for the signing team.\"