After two of the four Major American sports leagues have already experienced ugly work stoppages in 2011, public focus is shifting to major league baseball’s ongoing negotiations. The NFL and NBA lock-outs have given way to heated public relations battles—particularly in the NBA’s case– between owners and players. Major League Baseball commissioner Bud Selig is no doubt paying attention as his own collective bargaining agreement with the MLBPA (players union) is quickly approaching its finale. However, unlike both the NFL and NBA, Major League Baseball doesn’t have an axe to grind—at least this time around—with the league’s unions. Instead, numerous rule changes are at the forefront of this turn of meetings.
American baseball has enjoyed an atmosphere of working peace since 1994’s strike. After a dramatic set of negotiations took place in ’05 and ’06, profits around baseball have continued to rise as owners and players alike found ways to increase ticket sales and fan satisfaction. However, while serious negative repercussions from the steroids era have been averted (for the most part), and while profits remain high around the league, Bud Selig still isn’t truly content with baseball’s current set of rules and form. When it comes to the player development specifically, Selig has his sights set on a new draft structure.
The (June) Amateur Draft—technically named the Rule 4 draft– was structured with second division and small-market clubs (directly) and overall efficiency (indirectly) in mind. To better compete with first-tier and large market clubs, smaller organizations are given an opportunity to capitalize on the draft. Their draft position is determined by their record in the previous season, and in theory, clubs that have performed more poorly recently will have first crack at top amateur talent while playoff teams will have to settle for lesser options at later slots.
However, just as player acquisition and inter-organization business evolved with the birth of free agency in the 1970’s, the MLB Amateur Draft is poised to change dramatically under commissioner Selig’s proposed set of rule changes. These proposed changes to the draft come in light of a set of (messy) proposed changed to the MLB’s wild card and playoff structure.
On Tuesday, Bud Selig and MLBPA chief Michael Wiener met and discussed (among other issues) proposed changes to the draft-slotting system. Selig and big league owners call for a move from “soft” to “hard” slotting while players prefer the former. The current soft-slotting system allows for large-market teams to retain some of their advantage over poorer teams by picking up hold-outs at later slots with the use of hefty signing bonuses. Intended to promote more equality among baseball clubs when it was implemented, the draft has grown more and more efficient of late and seems to be on the brink of an overhaul.
Recent notorious over-slot cases like that of the Yankees signing Dellin Betances and Andrew Brackman to slot-record deals in consecutive years (’06-’07) the Royals and Wil Myers and Chris Dwyer in ’09, and the Rangers’ messy negotiations with Matt Purke in ’09 exemplify the inefficiencies that remain in the MLB Draft. Allowing teams to spend first-round money on later slots takes much of the advantage away from weaker/poorer teams that were intended to have first crack at affordable (amateur) franchise talent.
Top-tier, money talents often slip past the small-market teams picking first because they’re scared off by gaudy bonus demands—see San Diego Padres draft history. Furthermore, because slotting is somewhat ignored of late, overall spending on the draft is pressured upward by the increased competition for picks between ballclubs; The current system affords draftees more power to dictate the team that picks them and their signing bonus– doing so causes somewhat of an auction atmosphere come draft day.
The newly proposed system would employ “hard-slotting“. In the hard-slotting method, a formulated maximum bonus– determined prior to draft day– is set for each draft position, forcing clubs and players to strictly adhere these limitations during their post-selection negotiation process. The Texas Rangers are already somewhat familiar with the repercussions of over-slot spending after they saw the MLB veto their gaudy contract offer to first-round pick Matt Puke a couple of summers ago.
While—in theory—this new system would seem fairer to poorer teams who are unable to spend as big a the wealthier and whom are forced to concentrate on the draft (vs. expensive free agency) for player acquisition, troubling issues come packaged with these rule changes. First of all, Selig proposes to include international free agents in the new amateur draft. Comparable international talent has consistently received more contract money than American talent has –and (often) at a younger age. The summer of 2009 shed light on this very problem. First overall pick Stephen Strasburg—arguably the top talent in draft history– signed a four-year $15- million-dollar contract with the Nationals after a lengthy negotiation process while a slightly lesser talent, international free agent Aroldis Chapman took home $30.25 million over six years.
Selig’s new system would seem to eliminate the advantage that international free agents have over US-born amateur ballplayers by grouping the two groups of players under the same set of regulations. However, doing so wouldn’t only expand the draft, but with such an increase in talent pool size. With the larger talent pool, the inflexible and arbitrary draft process will become even more messy when teams are forced to choose between seasoned Japanese Industrial League veterans and eighteen-year-old, raw Texas fireballers. Theoretically, the Yankees would have had to choose between Jesus Montero and Joba Chamberlain in ’06 while the Mariners would have faced a difficult choice in 2009 with Dustin Ackley and Guillermo Pimentel on the table.
Furthermore, this new system would replace international free agency—a very efficient process by Economics textbook standards—with an inflexible draft process. Instead of improving the power of US-born amateurs, the MLB would effectively take away the extra power that free agency gives to international prospects.
Another issue with this system would be age. American players aren’t draft eligible until they’ve graduated from high school (or received an equivalent diploma)— generally at age 18—while international players can sign at 16. In order for this new system to work more smoothly, a standardized age threshold would need to be set.
Even if Selig would be able to implement these rules, supposedly giving every team preseason “hope and faith” in a fairytale, utopian business—in reality– the price of these changes will be steep.
Of any of the issues and bargaining negotiations discussed at the meeting last Tuesday, the MLBPA was most opposed to Selig’s hard-slotting system. Union chief Michael Wiener described the player’s view of the system as a ploy to take money from players’ pockets:
“We’re agreed with the commissioner’s office not to really discuss the substance of what’s happening at the bargaining table,” Weiner said at Tuesday’s press conference . “The historical view of the players– going back through earlier rounds of bargaining–is that our job is not to reduce the bargaining position of any player. That remains the view of the players.”
No doubt, hard-slotting would certainly give MLB owners more leverage in negotiations with their draftees. Agents like Scott Boras and Drew Rosenhaus won’t be able to threaten teams with budget-busting bonuses any longer—at least not as effectively. And while this policy would effectively be putting money back in the pockets of veterans, and even though amateur players lack the negotiating power to oppose decision’s from the MLB or MLBPA, the player’s union (probably) won’t bite. Just as we’re reminded in the NFL and NBA’s labor negotiations, veterans athletes– like the rest of mankind– won’t forfeit any sort of power without a fight. Unless the MLB gives in on some other major issue during bargaining, this issue won’t leave the table anytime soon.
While it’s unlikely that changes to the draft alone would sour bargaining between the MLB and the MLBPA, it won’t make negotiating more pertinent policy issues any smoother. Pushing this proposal could also jeopardize the peaceful working relationship the two-sides currently enjoy. In a sport that’s flourishing after dodging bullets like the ugly 1994 lock-out and horrible Mitchell Report/steroid allegations PR—it’s a very dicey move shake up the relationship between the owners and management and their players.