Archives for July 2022

Major League Baseball and the MLB Players Association agreed to a new collective bargaining agreement on March 10, ending a lockout that froze the sport for more than four months. In order to reach that agreement, the two sides had to find the middle ground on a wide variety of issues, but there was one issue that both sides agreed to kick down the road and deal with at another time.

The league wished to replace the existing international signing system with an international draft, suggesting that this would be a way of improving a system that has its fair share of problems. MLBTR’s Steve Adams took a look at many of the issues back in March, relaying reports from many sources who had concerns including players being evaluated even before they become teenagers and making verbal agreements as young as 13 or 14 years of age. Other concerns include steroid usage among those youngsters as well as corruption among the “buscones” who often arrange deals between the teams and players.

The players pushed back, however, with many pointing out that there are already rules against such behavior but little to no enforcement, and that the real motivation for MLB wanting the draft is to stifle the players’ earning power and ability to choose their employer.

The league tried to sweeten the pot by offering to get rid of the qualifying offer system in exchange, which has a negative impact on the earning power of players who receive one. But it wasn’t enough to get the union to bite. In the end, both sides agreed to putting this particular standoff on ice until July 25. If the two sides can agree on an international draft by then, the qualifying offer system will be eliminated. If not, the existing international system of hard-capped bonus pools will remain, as will the QO.

With that deadline now just over two weeks away, the sides met today to discuss proposals. Jeff Passan of ESPN was among the reporters to relay word of the meeting, noting that the two sides are separated by significant gaps in their proposals. Bob Nightengale of USA Today added that the union proposal involves a higher pool of money for the drafted players and noted that players from Puerto Rico and Japan would be excluded from the draft. (An earlier report from Jorge Castillo of the Los Angeles Times noted that inclusion or exclusion of Japanese players was still being negotiated.) Hannah Keyser of Yahoo! Sports added that what the two proposals had in common was the same number of rounds and age limits.

Alden Gonzalez of ESPN then broke down the key differences when it comes to the numbers. MLB’s proposal is for a 20-round draft with hard slot values, meaning that the player and team would have no ability to negotiate for a higher or lower amount. The total pool of money for the draft would be $181MM, with undrafted players limited to a maximum bonus of $20K if they subsequently sign as free agents. The MLBPA counter proposal is also 20 rounds, but comes with no cap on player bonuses, a $260MM pool and a $40K limit for undrafted players.

For reference, the current draft includes players from the United States, Canada and Puerto Rico. Each team is given a bonus pool, with those pools varying in size depending on which picks the team possesses. Each pick comes with a slot value, though teams are free to sign players for above or below those assigned slot prices, as long as the total price tag of those signings doesn’t exceed the value of their bonus pool. It’s not a hard cap, as clubs are allowed to exceed their bonus pools, though there are increasing penalties depending on the extent to which teams go beyond their limit.

In that existing draft system, players at least have some leverage in negotiations with teams. If a player doesn’t get a bonus to their liking, they can refuse to sign and play college ball instead, returning to the draft at a later date. It seems that the players value this bit of agency, as they are trying to implement it for international players as well. The league, on the other hand, is more interested is tamping down costs, both via hard slots and the smaller pool of total available money.

Whether or not the two sides can bridge those gaps and come to an agreement will have huge ramifications for many players, both current and future. As Evan Drellich of The Athletic points out, 28.2% of the 975 players on Opening Day rosters are foreign-born, with hundreds more in the minor league systems of each club and more joining every year. The current youngsters who will one day follow in their footsteps could be facing the status quo or looking to navigate a new system that is finalized in the coming weeks.

The agreement, or lack thereof, will also have a big impact on current players. It’s been known for years that the qualifying offer system has a drag on the earning power of free agents, as it’s tied to draft pick forfeiture. Most teams that are interested in signing a QO’d free agent will consider the loss of the draft pick as part of the acquisition cost and lower their financial offer accordingly. This only affects around a dozen or so players each year, however. It was 14 this year, for example. Although the union would surely love to be rid of the QO, the international draft impacts so many more players that they likely won’t accept an unsatisfactory draft framework just to eliminate it.

More news will be forthcoming as the two sides will surely continue negotiating over the coming weeks. Of course, it’s possible the two sides could agree to another extension and push the deadline beyond July 25, but that would come with complications. Players who are traded mid-season are ineligible to receive qualifying offers at season’s end, meaning teams will likely want to know whether the QO system is in place before deciding on how to approach the August 2 trade deadline.