An Unbalanced Idea: The Competitive Balance Draft

After allowing it to lay dormant for five months, Bud Selig dusted off the
report of his Blue Ribbon Committee and announced plans to implement some
of the changes it suggested. The one that received the most attention
was the so-called competitive balance draft. As presented by Selig, the
draft would allow the teams with the worst records over the previous three
years to select one player each from the teams with the eight best records
over the same period.

The draft’s purpose is to address the game’s supposed competitive balance
problem, that being the current code for "the players make too much
money." Those of you who have followed the game’s labor struggles will
remember past codes like "meaningful compensation," "cost
certainty," and the legendary "survival of the game".

MLB’s current line of reasoning is that rising salaries have caused team
success to be determined solely by the amount of money a team spends on its
payroll, with that figure determined by whether a team is a low-revenue or
high-revenue one. MLB is saying that only large-revenue teams–the
definition of which changes with some frequency–can have success in the
current economic climate.

The esteemed Committee’s report cited the usual litany of statistics in
support of that position. Of course, the numbers cited use a definition of
payroll (salaries of players on the roster as of August 31) that leads to a
distorted conclusion. Additionally, the committee made no attempt to
ascertain the impact that the changes in baseball’s postseason format, the
1994 strike, and the implementation of a flawed revenue-sharing plan may
have had on the game.

That said, let’s leave the Blue Haired…er, Blue Ribbon Committee alone
for the moment and focus on the competitive-balance draft. The list of
teams that would have participated in such a draft after the 2000 season
has run in many places, but let’s review them here. The following teams
would have lost a player (1998-2000 winning percentage in parentheses):

Atlanta (.625)
New York Yankees (.616)
New York Mets (.572)
Cleveland (.567)
San Francisco (.559)
Boston (.557)
Houston (.557)
Cincinnati (.530)

One problem presents itself immediately. The small-market–by any
definition–Cincinnati Reds would have lost a player in this system. And
while both New York teams show up on this list, neither Chicago team does,
nor does the Los Angeles team. The Cleveland Indians, who have maximized
their opportunities in one of the game’s smallest markets, would have lost
a player in this scenario.

Which teams would have gained a player?

Florida (.406)
Montreal (.412)
Tampa Bay (.414)
Minnesota (.417)
Detroit (.439)
Kansas City (.440)
Pittsburgh (.445)
Philadelphia (.447)

As before, the last name on the list is the most interesting. The
Philadelphia Phillies have had a run of poor teams since their 1993 World
Series appearance, but the idea that they are at some disadvantage, playing in
one of the biggest markets in the nation, is spurious.

Of the other teams, the Tampa Bay Devil Rays are in their fourth year of
existence; the Florida Marlins, Montreal Expos and Minnesota Twins haven’t
even tried to compete over the period in question, paring payroll to the
bone for the dual purposes of collecting revenue-sharing funds and
extorting new stadiums from their local governments. This is behavior that
should be rewarded?

Sure, these arguments are dead horses, ones we’ve made again and again here
at Baseball Prospectus. And the purpose of this piece isn’t to make
them again.

No, what we want to do here is look a year forward. The above indicates
what the competitive balance draft might have looked like had it been
implemented last year. But what if it the idea passes for this year? What
teams would be likely participants in the draft?

Here are the teams with the best records in baseball for the 1999-2000 period:

Atlanta (.611)
New York Mets (.588)
Cleveland (.577)
New York Yankees (.573)
Arizona (.571)
San Francisco (.565)
Cincinnati (.557)
Boston (.552)
Oakland (.551)
St. Louis (.526)
Chicago White Sox (.526)
Seattle (.524)

That’s 12 teams. Now, almost no realistic expectation will move the Braves
or Mets out of the top eight, and it’s probable that the Yankees,
Diamondbacks and Giants would also lose a player in the draft. But look at
the next seven teams, the ones that could end up with a top-eight record
and be subjected to the draft. The A’s–the poster child for small-market
malaise just a couple of years ago–are almost certain to lose a player in
the draft next year. The Reds could win another 85 games and be forced to
cough up a player despite never having made the postseason in the 1999-2001
period. The Mariners and Cardinals, who have made the most of their small
markets, could play their way into the draft with successful campaigns.

Which teams would be likely to draft players?

Chicago Cubs (.407)
Minnesota (.410)
Montreal (.417)
Tampa Bay (.427)
Kansas City (.437)
Philadelphia (.438)
Florida (.443)
Pittsburgh (.455)
Milwaukee (.455)
Detroit (.458)
San Diego (.463)
Baltimore (.469)
Anaheim (.469)

Yup. The Chicago Cubs, the sun-splashed, suds-soaked Snugglies, would be a
near-lock to pick in a draft held after the 2001 season. That’s the same
Cubs who occupy a shrine, whose games are televised nationwide, and who
play in the third-biggest city in the country.

Look at the rest of the list. The Phillies remain, although they appear
likely to play their way off of it. Two teams moving into cash-cow
ballparks, the Pittsburgh Pirates and Milwaukee Brewers, could move off the
list and be replaced by two of the wealthier franchises in the game, the
Baltimore Orioles and the Anaheim Angels.

This plan, if implemented, could force the Oakland A’s and the Cincinnati
Reds to surrender a player to the Tribune Company and the Disney
Corporation. Now, we’re not privy to exactly what conversations took place
when Mr. Selig and his staff were deciding how to improve Major League
Baseball, but we have to assume that forcing two of the smallest-market
teams in baseball to cough up a player to two teams owned by gargantuan
media conglomerates wasn’t on the short list of good ideas.

The real point, of course, is that baseball doesn’t have a competitive
balance problem. Look at those lists. Over a three-year period, just two
teams have played .600 baseball, and none have been under .400. Over two
years, there’s just one .600 team and no under-.400 teams. Between those
extremes, there are teams in markets large and small, with revenue streams
large and small, playing baseball good and bad.

This is a plan that solves the problem MLB wants the public to believe
exists: large-market, large-revenue teams having all the success. Even a
cursory look at the numbers above should be enough to convince anyone that
their premise is erroneous. Once that is removed, the case for this draft
falls apart.

What baseball has is one well-run franchise, the Yankees, making unholy
amounts of money and winning four championships in five years. It has two
franchises, the Twins and Expos, that aren’t trying to be competitive and,
for three years running, are getting paid for their trouble. A competitive balance
draft doesn’t change those things, and it has a negative impact on the
legitimately small-market teams that are trying to win. It’s a do-nothing
"solution" that feeds the need to do something while maintaining
the illusion that payrolls are the be-all and end-all of success and that
everything would be better if the players weren’t so damn greedy.

Addressing the emerging gaps in revenue growth, ensuring that all teams
have an equal economic incentive to succeed, forcing out ownership groups
that aren’t motivated to win, abandoning markets that don’t support the
game, and, perhaps most importantly, ceasing the incessant anti-marketing
of baseball and its teams are the real solutions. The competitive balance
draft has nothing to do with any of the above and should be cast aside.

Joe Sheehan can be reached at jsheehan@baseballprospectus.com.