Free-agent compensation has always been a highly flawed system. The current way things are run may be better than the past, but it still is causing major issues. It keeps players from maximizing their potential earnings and it encourages middling teams to lose down the stretch to ensure they solidify their standing with regards to getting a protected pick. At BP Milwaukee, Jack Moore breaks down how it's affected the Brewers in the recent past.

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Good article, Jack. But remember that the current CBA was just that -- collectively bargained. Guys like Lohse should fault the players' union for agreeing to it. Let's hear proposed solutions instead. Protect the picks for the bottom 15 teams? Every team that doesn't make the playoffs?
The solution is incredibly simple. Eliminate all forms of compensation and let the free market operate. Freely. Just as with everyone else in America who is not a professional athlete, after a player has fulfilled his contract he should be free to sign a new one with any employer he chooses, no strings attached. As a teacher I switched school districts this year to work at one much closer to home. Should my new district have been required to "compensate" my old district? I think everyone would laugh at such a concept, understanding that it is ridiculous on its face. Back to MLB, should the Dodgers have been required to compensate the Rays for hiring Andrew Friedman? Should the Astros have compensated the Cardinals for hiring Jeff Luhnow, let alone for luring Kevin Goldstein away from Baseball Prospectus? That the bizarre question of "compensation" even exists today is a remnant of the system when owners had the ability to treat the players as chattel and livestock.
Not quite. Professional sports differ from other professions in that the participating companies within the industry are selling the competition itself as a product. The rules that they create to regulate their operations need to have some way to ensure that every fan base has hope of seeing their team succeed. Allowing teams with higher revenue streams to just cherry pick FA's from other franchises without compensation is diametrically opposite to that hope. I have zero sympathy for Kyle Lohse - he was an aging pitcher coming off a career year, and passed on the QO. He gambled and lost. People do that in Vegas every day. He has the right to make that gamble, and is entitled to no sympathy when it doesn't work out for him.
In the majority of cases free agents are "aging," because the rules dictate a team has six years of control before free agency is granted. In addition, the team has the option of negotiating a contract that in most cases will keep the player from leaving. We have seen that these two things are plenty enough to protect a team's interest, although nothing can "ensure" the hopes of the fan base of a poorly run team that they will see their team succeed. Contrary to your applied assumption, the acquisition of free agents does not "ensure" the signing team's fan base of success, either. Adding the subjective word "hope" is done to muddy the results so that your concept cannot be held to any measure of accountability. Your are simply dusting off the discredited rationale that was used to keep the old reserve clause in place for almost a century.