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Wednesday, November 08, 2017

SI: How Are Teams Compensated for Losing a Free Agent?

MLB introduced the qualifying offer back in 2012 to replace its old free-agent compensation system in which teams were gifted draft picks based on a calculus that divided players into two pools, Type A (the top 20% available) and Type B (the top 21–40%). But in the latest CBA, the qualifying offer was overhauled. Before, signing teams would have to forfeit their highest draft pick (unless they were in the top 10 of the draft) to the player’s old club. Now, things are a little more complicated.

Apparently it only affects signing one of nine players. Plus there’s a luxury tax element that affects four teams.

fra paolo Posted: November 08, 2017 at 12:19 PM | 3 comment(s) Login to Bookmark
  Tags: cba, collective bargaining agreement, draft pick compensation, free agency, qualifying offers

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   1. cardsfanboy Posted: November 09, 2017 at 10:35 PM (#5573888)
First I have to say, good article.

Second, from the article.

But it's worth wondering just how we got to the point where understanding MLB's free agency rules now requires LSAT-level reading comprehension, or even a team of specialized lawyers. The simple reality is that free-agent compensation shouldn't be tied to draft pick forfeiture: All that does is serve to depress the market artificially, as teams usually have no inclination to sacrifice picks (and the cheap talent they lead to) in exchange for already expensive veterans, particularly those who are not elite.

I think the point is to artificially reduce the market. It's never going to matter to the true elite players, or the fungible players, but the system is designed to incorporate a bit of control from the team on the high mid tiered players. These are the guys that teams generally need to keep(or replace with like quality) to remain competitive, and it's designed so that it's harder for a player to leave team. It's not about the players, it's about the teams(and fanbases) the 17.5mil one year contract at least forces the team to be willing to spend on a player. In reality, the only thing I would really change to this system right now, would be that if a team offers a player a qualifying offer, and then signs the player as a free agent for an annual value higher than the qualifying offer, that any amount over the qualifying offer only counts 25-50% against the luxury tax.
   2. Zonk Tormundbane Posted: November 10, 2017 at 09:59 AM (#5573981)
I think you have to remember WHY compensation - at least in some form - remains in the CBA.... i.e., both sides - MLB and MLBPA - see it as a substantial bargaining chip in CBA negotiations and neither side has quite figured out what they actually want in order to surrender the chit forever. The MLBPA retains some modicum of control over the draft - but I don't think the MLBPA knows what it wants to do with the draft. I don't think MLB does either.

So -- it stays in, with regular modifications -- usually, in increasingly watered down form.

It's become a sort of 'comfortable' thing to adjust in each CBA, so I suspect there might also be some underlying fear about what happens if you no longer have this "big thing" at all to use to get new CBAs signed.

Bold prediction: We'll see MLB labor unrest anew in the CBA following the CBA that eliminates FA compensation entirely.
   3. snapper (history's 42nd greatest monster) Posted: November 10, 2017 at 10:06 AM (#5573986)
The MLBPA retains some modicum of control over the draft - but I don't think the MLBPA knows what it wants to do with the draft. I don't think MLB does either.

It's more important than that. Without the draft pick/Free agent link, it is my understanding that the MLPA loses all right to collectively bargain the draft. If the draft isn't collectively bargained, MLB faces a lawsuit against their ability to limit draft pick compensation, or to even have a draft. i.e. if the draft is not collectively bargained, it may not be legal at all.

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