Collective Bargaining Agreement

Tony Clark On Qualifying Offers, Draft, Luxury Tax

By charliewilmoth | February 13, 2016 at 4:23pm CDT

Here’s the latest from MLBPA head Tony Clark, who gave an interview to the Associated Press last week in which he articulated his positions on a number of issues that could affect the next round of CBA negotiations once the current CBA expires in December. Here are the highlights.

Clark expressed frustration that top players are still on the free agent market in February. (Presumably, Clark is referring to players like Ian Desmond, Dexter Fowler and Yovani Gallardo, who remain on the market after rejecting qualifying offers months ago. “I think it’s disappointing when there are as many talented players still without a home,” he said. “I don’t think it’s in anyone’s best interest to be in a world where very talented players are at home for whatever reason they are there. It will likely be a part of the conversation in bargaining.”
Clark also said he might be in favor of some sort of draft lottery system. As opposed to the current system, which awards draft picks merely on reverse order of record, a lottery system might somewhat disincentivize the kind of so-called “tanking” seen in recent years from teams like the Astros (who got three straight No. 1 overall picks from 2012 through 2014) and Braves. “It will be beneficial to look at that, and not look at it in a vacuum but appreciate whatever it is that we attempt to negotiate there or propose there, that it ties into the other moving pieces and doesn’t create an imbalance,” Clark said.
There are “very significant issues” with the idea of an international draft, Clark said, although he expects the idea will come up in CBA negotiations. (This isn’t the first time Clark has expressed doubt about the possibility of an international draft.)
Unsurprisingly, Clark believes the luxury tax threshold should rise. The figure remains at $189MM, and its growth has not kept pace with industry revenue. The threshold has arguably constrained player salaries, as it has likely played a role in preventing some traditional big spenders (such as the Angels) from signing key free agents this offseason.

Kris Bryant, Maikel Franco File Service Time Grievances

By Jeff Todd | December 7, 2015 at 4:08pm CDT

A pair of outstanding rookie third basemen, Kris Bryant of the Cubs and Maikel Franco of the Phillis, have filed grievances claiming that their service time was manipulated in an effort to delay their future entry onto the free agent market, Jeff Passan of Yahoo Sports reports.

No shortage of attention will be paid to these cases. Bryant, of course, won the National League’s Rookie of the Year award, while Franco might have staked his own claim to that title had he not been injured late in the year. In that regard, then, the stakes are high for the players and teams; if a panel were to award additional service time, both would stand to qualify one year earlier for free agency.

Most important of all, however is the heightened relevance of the matter with collective bargaining talks set to begin in earnest. The matter of whether, when, and why top young players are brought up to the majors — and thus begin accruing credit for time spent on an active MLB roster — has long seemed an area ripe for consideration (if not acrimony) between the league and the player’s association.

For those unfamiliar with how things work, teams have a powerful incentive to hold back talented young players — even those they believe to be ready for the majors — to slow their march towards free agency. A less powerful, but also relevant incentive exists to keep a player down long enough to prevent them from qualifying for “Super Two” arbitration status.

A player only accrues a full season of MLB service when he reaches 172 days on the active roster (that includes off days), and it takes six full seasons of service time to reach free agency. As a practical matter, then, teams can milk nearly seven years of control over players if they just keep them in the minors for a few weeks at the start of the year.

Indeed, that’s exactly what happened with Bryant and Franco, who accrued 171 and 170 days of service last year, respectively. While there were surely legitimate baseball reasons that also supported the decisions to start those players in the minors, it’s not hard to see what line of argument their agents will pursue.

Of course, many such matters are resolved before they get to a hearing, though in these cases it would seem a creative arrangement would be necessary. It will be most interesting to see how things proceed between the larger entities with stakes in the pair of disputes: MLB and the MLBPA. The sides have about a year to negotiate a new CBA, and the service-time issue presents not only a point of possible contention, but also rather a tricky problem to solve in practice even if agreement on a general direction can be found. While bargaining could certainly override any precedent struck in a hypothetical grievance, a victory in front of an arbitration panel would transfer leverage to one side or the other.

Quick Hits: Holliday, Davis, Price, Cubs, Padres, Relievers, CBA

By Mark Polishuk | November 26, 2015 at 11:49pm CDT

In response to a reader question about Matt Holliday as a possible trade candidate, MLB.com’s Jenifer Langosch doubts the Cardinals would move a such strong bat since the team’s main winter goal is to add offense. Langosch isn’t sure if the Cards have any interest in dealing Holliday or if he would accept a trade via his 10-and-5 veto rights. Even at age 35 and battling injuries last season, Holliday still posted a very respectable .279/.394/.410 line over 277 plate appearances. 2016 is his last guaranteed year under contract (St. Louis has a $17MM club option on him for 2017) so it’s also not like Holliday is a long-term roadblock for the club’s upcoming young outfielders. Here’s some more from around baseball as we look forward to leftover turkey tomorrow…

The Astros aren’t likely to be big players for Chris Davis, a source familiar with the situation tells Evan Drelllich of the Houston Chronicle. Davis will command a big price and Houston already has a lot of high-power, high-strikeout hitters. I myself speculated that Davis and the Astros could be a fit in my Astros Offseason Outlook piece, under the logic that the team needs a big left-handed bat, Davis is a Texas native and first base would be open if Chris Carter and Evan Gattis were non-tendered. Drellich’s piece looks at that first base situation for the Astros, and the presence of prospects Tyler White and A.J. Reed might also make a Davis signing unlikely.
Six general managers who recently spoke with Peter Gammons believe the Red Sox will sign David Price this offseason. “Boston will go $30-40M above anyone else” to land Price, one NL GM opines. This is just the latest chatter connecting Price to the Sox, and while Gammons writes that “some feel he is uneasy about Boston, but David is so sophisticated, so talented and so intelligent he will make the best of any situation.” Another GM, however, speculates that the Cardinals could be the ones to make the big play for Price, passing on re-signing Jason Heyward in the process.
Gammons shares some more chatter from his sources, including “a lot of John Lackey and Alex Gordon to the Cubs speculation.”
Recently designated players like John Axford, Daniel Nava, A.J. Griffin, Danny Hultzen and Wilin Rosario could all be intriguing targets for the Padres, Jeff Sanders of the San Diego Union-Tribune opines. The first three are free agents, Hultzen was outrighted off the Mariners’ 40-man roster and Rosario is still in DFA limbo.
Fangraphs’ Eno Sarris tries to identify some of the smaller-name or underrated relief arms on the open market that could blossom into bargain pickups. The Cubs are one example of a club that has built an entire bullpen (and a strong one, at that) out of such under-the-radar pitchers, as Sarris notes.
One of the underlying stories of 2016 will be the negotiations between MLB and the players union over the next Collective Bargaining Agreement, ESPN’s Jayson Stark writes. Stark’s piece highlights some of the major issues that are likely to play a big role in the upcoming talks, ranging from revenue sharing, free agency and the qualifying offer, the length of the season, a possible international amateur draft and more. Another interesting topic could be how the league may address teams “tanking” several seasons in an attempt to rebuild, and possible solutions include a draft lottery or a rule prohibiting teams from drafting in the top five in consecutive seasons.
The good news about the CBA talks is that multiple sources on both sides tell Stark that everyone wants to keep the labor peace that baseball has enjoyed for over two decades. “It’s a 9-and-a-half-billion dollar industry. Nobody is going to want to blow it up,” one source tells Stark.

Team Payroll Restrictions Could Be Issue In Next Round Of CBA Talks

By charliewilmoth | February 28, 2015 at 9:30am CDT

Team spending restrictions could be an issue in negotiations for MLB’s next Collective Bargaining Agreement, Gordon Wittenmyer of the Chicago Sun-Times writes. Specifically, the debt structure of the Ricketts family’s heavily financed purchase of the Cubs in 2009 required the team to tie baseball spending to revenues, limiting its ability to spend. Other clubs face similar restrictions.

“Cubs aside, larger picture, any time there are contractual obligations or language that affect the way a team functions, against the backdrop of the decisions that they are going to be making, against whatever restrictions are in place, we enter that equation,” says MLBPA head Tony Clark. “Rest assured, we’re interested enough to be involved in the conversation.”

MLB’s current CBA expires after the 2016 season. Wittenmyer suggests that the union’s main issue with team banking restrictions is that teams might use them as excuses not to spend.

The Cubs have operated with dramatically limited payrolls in recent years, with their Opening Day payroll falling from a high of about $144MM in 2010 to about $93MM last season (via Cot’s Contracts). Obviously, the team’s splashier 2014-15 offseason, highlighted by their signing of Jon Lester, will produce a higher payroll in 2015 (and Wittenmyer notes that the team did hold over money budgeted for 2014 to spend this winter). But team president of baseball operations Theo Epstein has emphasized that the team’s lower recent payrolls were not purely a function of the fact that the team had been rebuilding.

“We’re not withholding dollars from this year’s team. We are spending every dollar that we have on this baseball team,” Epstein said in 2013 (via David Kaplan of CSNChicago.com), when the Cubs had an Opening Day payroll about about $107MM. “We maxed out our payroll last year and we maxed out our payroll this year.”

Qualifying Offers To Be Worth $15.3MM This Offseason

By Jeff Todd | October 7, 2014 at 3:00pm CDT

Teams wishing to make one-year qualifying players to pending free agents will have to be willing to pay them $15.3MM, the Associated Press reports (via Sportsnet.ca; h/t to Ben Nicholson-Smith). That represents an 8.5% increase over least year’s $14.1MM price tag.

The qualifying offer value is arrived at by averaging the salaries of MLB’s 125 highest-paid players. Teams may extend qualifying offers to eligible free agents-to-be within five days after the end of the World Series. Players have seven days to weigh the offer. When a player rejects the offer, his former team becomes eligible to receive an additional “sandwich” round pick in the next amateur draft, while a new signing team must forfeit their highest non-protected pick. (No draft pick movement occurs if a player re-signs with his original team.)

In order for a player to be eligible to receive a qualifying offer, the CBA states that he must have spent the entire regular season on that team’s roster. For example, Brandon McCarthy is ineligible to receive a qualifying offer after beginning the season with the Diamondbacks and being traded to the Yankees. Click here for more details on how the qualifying offer system works.

Every player made a qualifying offer to date has declined it. In the 2012-13 offseason, the first year that the QO system was in effect, nine players were made a qualifying offer and seven ultimately signed with different clubs. Last year, thirteen players turned down qualifying offers and ten went to new clubs in free agency.

As MLBTR’s Tim Dierkes explained before the 2013 season, avoiding the qualifying offer can have a major impact on a free agent’s earning capacity. That became all the more clear during the latest round of free agency, when both Stephen Drew and Kendrys Morales declined qualifying offers but were unable to find multi-year offers to their liking. The pair of veterans ultimately waited months into the season before signing, settling for one-year deals before struggling badly over the rest of the year.

Qualifying Offers To Be Worth $14.1MM This Offseason

By Steve Adams | October 11, 2013 at 3:45pm CDT

The value of this year's one-year qualifying offer for free agents will be $14.1MM, according to Joel Sherman of the New York Post (on Twitter). That sum represents an $800K increase from last year's $13.3MM mark.

Major League Baseball's latest collective bargaining agreement did away with the old Elias Rankings and Type-A/Type-B free agent system in lieu of the qualifying offer system. Simply put, teams who wish to receive draft pick compensation for the loss of a free agent to another team must first make a qualifying one-year offer that is worth the average salary of MLB's 125 highest-paid players. Only after the free agent rejects that offer is his former team eligible to receive a compensatory first-round pick.

Unlike the the old system, the team losing their free agent does not receive the signing team's pick as compensation. A team that signs a free agent after he has rejected a qualifying offer simply loses its first- or second-round pick. (The first 10 picks of the draft are protected**, so teams with a Top 10 selection would instead forfeit a second-rounder.) That free agent's former team would then receive a pick at the end of the first round.

In order for a player to be eligible to receive a qualifying offer, the CBA states that he must have spent the entire regular season on that team's roster. For example, Matt Garza is ineligible to receive a qualifying offer after beginning the season with the Cubs and being traded to the Rangers.

Last year, just nine free agents received qualifying offers, and none of the nine accepted them. This year, the Mariners have already said that they will extend a qualifying offer to Kendrys Morales, and agent Scott Boras has said they will reject the offer. Rangers GM Jon Daniels also said that he expects to make a qualifying offer to impending free agent Nelson Cruz.

As we saw last offseason with Kyle Lohse, rejecting a qualifying offer can seriously dampen interest in a free agent. Many expected that Lohse would be able to find a four- or even five-year deal following a brilliant run with the Cardinals, but we instead heard a common refrain: teams weren't willing to part with their top draft selection in order to sign him. Ultimately, the Brewers inked Lohse to a three-year, $33MM contract late in Spring Training.

MLBTR's Tim Dierkes recently conducted a poll asking MLBTR readers which players would receive qualifying offers following the regular season. Not surprisingly, Robinson Cano led the way as the most likely to receive an offer. Jacoby Ellsbury, Shin-Soo Choo, Brian McCann and Hunter Pence were the next five on the list, although Pence can obviously be removed from the equation, as he signed a five-year extension with the Giants shortly after the poll was conducted.

**Note: In the 2014 Draft, the first 11 picks will be protected instead of the first 10, as the Blue Jays will receive the 11th pick as compensation for failure to sign 2013 first-rounder Phil Bickford.

Service Time And The 40-Man Roster

By Steve Adams | April 15, 2013 at 9:00pm CDT

The beginning of each season typically brings up many debates regarding service time for top prospects, and this season has been no exception. The Twins and Red Sox were among the teams to ignore service time qualms and take top prospects north. Aaron Hicks and Jackie Bradley Jr. have both struggled tremendously at the Major League level, and both could eventually see themselves sent down to the minor leagues to sort out their issues at the plate.

Should that occur, Hicks and Bradley will both need to spend 20 or more days in the minor leagues in order to delay their free agency by a season. This may seem to contradict a post last week in which we noted that Wil Myers now has been in the minors long enough to delay his free agency by one season. There's a distinction, though.

Because Hicks and Bradley were on their team's 40-man roster to open the season, sending them to the minor leagues would qualify as an optional assignment. Per baseball's collective bargaining agreement, players on optional assignments need to accrue 20 or more days of service time in order to delay free agency by one season.

Myers is not currently on Tampa Bay's 40-man roster, meaning he need only spend 12 days in the Minor Leagues to finish the season with 171 days of service time. That would leave him one shy of 172 days — the mark that is officially used to determine "one year" of service in Major League Baseball's CBA.

But what about players who were on the 40-man roster prior to the season and are called up after April 12? Oswaldo Arcia of the Twins, who made his Major League debut tonight, is one such case. Arcia opened the season at Triple-A Rochester but was already on the Twins' 40-man roster. As a result, his initial assignment to Triple-A was considered an optional assignment. Like Hicks, Bradley and other prospects who broke camp with their teams like the Padres' Jedd Gyorko, Arcia would require 20 days in the minor leagues for the Twins to get another year of service.

Scott Boras, Rob Manfred Disagree On CBA

By Ben Nicholson-Smith | March 22, 2013 at 11:15am CDT

Baseball’s most prominent agent says the integrity of the sport has been damaged by its collective bargaining agreement. MLB’s top labor executive says the system works, even though one prominent player remains jobless. Within a telling piece at USA Today, Bob Nightengale reports that agent Scott Boras and MLB executive VP Rob Manfred are at odds over the current CBA.

Boras argues that the basic agreement encourages teams to finish with poor records. The clubs that finish with the worst records are able to spend more freely on amateur players.

"The integrity of the game has been compromised,'' Boras told Nightengale. "What baseball has done, it has created a dynamic where draft dollars are affecting the Major Leaguers. Teams are constructing clubs to be non-competitive, like Houston and Miami, so they can position themselves where they can get more draft dollars. Clubs are trying to finish last to create more draft dollars. And this dramatically affects the Wild Card and Major League standings.''

Kyle Lohse, the top unsigned free agent, has suggested in recent months that the new draft pick compensation rules have limited his leverage (latest Lohse rumors here). His agent agrees. Boras argues that draft dollars are "the latest currency" for MLB general managers.

“And the best way to earn draft dollars is to sabotage your Major League team and finish last,'' he said.

In the past teams didn’t mind surrendering a first round draft pick to sign a prominent player, Boras said. The clubs could simply spend over-slot on players in later rounds, a practice that is no longer permitted in the same way.

“Now, you've taken away the structure of the scouting and developing,” Boras said. “They have stolen our youth. They have kidnapped our children in this system.''

Manfred explained that the agreement won’t be changed to accommodate one player.

"It is important to focus on all the changes to the system of draft choice compensation,'' Manfred told Nightengale. "A large number of players were freed from the burden of compensation completely, and those players undoubtedly received better contracts as a result. We have not heard anyone raising questions as to whether the system is working for those players.”

Manfred points out that with the exception of Lohse the nine players who declined qualifying offers obtained substantial contracts.

"The fact that one Scott Boras client has not signed does not convince me that the system is broken,'' Manfred said.

Agent Larry Reynolds represents B.J. Upton, another player who hit free agency after declining his former team’s qualifying offer. Reynolds told Nightengale it would be “misleading” to suggest that draft pick compensation is the lone variable that determines a free agent’s value.

MLB, MLBPA Talking Worldwide Draft

By Ben Nicholson-Smith | March 19, 2013 at 7:33am CDT

TUESDAY: MLB is willing to make "significant concessions" to the MLBPA in order to implement a worldwide draft, sources tell ESPN.com’s Buster Olney (Twitter links). The players could obtain an increase in minimum salary, have a lower service time threshold for arbitration eligibility and more, Olney writes.

MONDAY, 1:26pm: Rob Manfred, MLB's executive VP, said there's a chance of a deal by June 1st, Liz Mullen of the Sports Business Journal reports (on Twitter). The most likely outcomes are a single global draft or the current draft plus a second draft for international players, Mullen reports.

10:37am: Major League Baseball could have a worldwide draft in place sooner, rather than later. MLB and the MLB Players Association are pushing to strike a deal for a worldwide draft by June 1st, Eric Fisher of the Sports Business Journal reports (Twitter links).

If the sides don’t reach a deal then expanded international spending restrictions will take effect. The possibility of increased international spending restrictions exists to encourage talks about a worldwide draft.

Amateur players from the U.S., Canada and Puerto Rico are now eligible for baseball’s Rule 4 draft, which takes place each June. Instituted in 1965, the draft does not apply to international players. Instead, amateur players from countries such as Venezuela and the Dominican Republic negotiate bonuses with teams.

Baseball’s most recent collective bargaining agreement introduced major rule changes designed to restrict international spending. For example, teams had $2.9MM to spend for the 2012-13 signing period. Though MLB and the MLBPA announced the five-year Basic Agreement just over a year ago, the sides acknowledged from the beginning that talks for a worldwide draft could take place before the expiration of the CBA.

Commissioner Bud Selig has consistently expressed public support for the worldwide draft. The implementation of a worldwide draft has the potential to limit expenses for the owners without presenting a direct threat to the earning potential of MLBPA members.

Quick Hits: Lohse, Young, Phillies, PED Supensions

By Steve Adams | February 25, 2013 at 11:53pm CDT

In 2008, Kyle Lohse waited until March to sign and landed in the place he'd call home for five seasons — St. Louis. Spring Training is underway again, and Lohse again remains unsigned. However, unlike 2008 when he had a career 4.82 ERA, Lohse is coming off a 3.11 ERA over his past 399 1/3 innings. ESPN's Buster Olney talked to a longtime MLB evaluator who says in addition to draft pick compensation, AL teams are wary of Lohse's poor AL track record. The evaluator also added that teams shy away former Cardinals pitchers, as they often struggle to find success elsewhere (Twitter links).

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