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Baseball's Financial System and another strike/lockout...

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Offline  Re: Baseball's Financial System and another strike/lockout...
#21

Posted: January 11, 2019, 2:10 AM Post
Posts: 32
Cool Hand Lucroy said:
The problem right now is the Catch-22 players are in. Teams have set up a little bit of a black box in that players can be underpaid for three years (and I get that no one is crying for millionaires, but we should remember that lots of guys are underpaid relative to market and also not forget that minor leaguers are basically working stiffs like us), granted no long-term security in arb, and then told they are too old to expect a massive contract. That, I think, is a problem. The solution has to be something along the lines of what clancy proposed, with salaries driven by production and service time in more equal measure. Right now, it is way skewed toward the latter.

As Brewer fans, I think we are going to have the face the possibility of having to choose between a CBA that fixes these issues but makes the situation less equitable from a competitive standpoint (eliminating the QO, reducing the team control window, etc.) or a work stoppage. I hope not, but that is my fear.

If I am the MLBPA, I start with either trying to double the league minimum or reduce arby to one year. I think that makes sense given the situation, but it means Stearns and co. will really have to adapt.


Another work stoppage would kill baseball for the foreseeable future. Small market teams already suffer in the current system and any change would make it even more difficult to compete. Every study done on the problems in baseball has money as the #1 problem in competitiveness. Increasing the incentives for huge spenders would only further erode the system. You say Stearns would have to adapt. How? Small market teams would be driven out of the game.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#22

Posted: January 11, 2019, 7:13 AM Post
Posts: 3959
Fear The Chorizo said:
I think it benefits the game overall to have players reach free agency towards the front half of their prime years, not the latter half or even past them. Guaranteed contracts can stay, but if players are looking for higher AAV they need to be willing to take a reduction in overall contract length, or incorporate more team options with palatable buyout clauses for both sides. For example, Pujols' 10 year deal at ~$30M in AAV could have had a team or mutual option structure into it after 5 years, where if a team wanted to cut ties and regain a little flexibility they could buy Pujols out for $60 million - that would save the Angels ~$90 Million over the next 5 years and still have allowed Pujols to try and get a lesser deal with a different team around his age 35 season after getting a windfall payment worth 2 years' salary.


The problem is... you need owners/GMs and players willing to work such deals out.

IMO, there definitely needs to be something done in terms of how long teams can control players before they reach free agency. The service clocks need to be reduced by at least 1 year, and concurrently I think they need to take a long look at adjusting how long teams can control prospects drafted out of college or signed at that early 20's age range in the minors before they need to be added to 40 man rosters. Would there need to be some sort of additional revenue sharing or salary cap ceiling/floor combination to make this work? Probably - and overall I think that would benefit the players and fan interest by keeping all 30 clubs at least in the mix to continually add payroll or restructure MLB rosters, even if they are in a rebuilding mode.


This is at the heart of the matter for teams like Milwaukee. Remember when the Crew was, for all intents and purposes, a farm team for big-market clubs?

I also think that agents really should rethink advising their very best clients to take the full arbitration path in order to become an unrestricted FA as soon as possible - 6 years is a long time. If players were more willing to sign an extension-type deal at the start of their prime (typically near the beginning of salary arbitration) and buy out a few years of free agency, they are much more likely to make more money overall in their career. Braun is an example of that, and despite concerns around here for his declining productivity with his contract, he's not an albatross around the neck of the Brewers and he's done very well for himself. Mike Trout's current contract setup is another great example. Harper could be making Trout money right now had he and Boras tried to get an extension done with the Nats after his MVP season a few years ago, and he'd still be able to become an UFA if he wanted well before 30. Kris Bryant, same thing - now he's got potentially chronic shoulder problems that will likely prevent him from getting crazy money over a super long contract, and he's still got 3 full seasons before he reaches free agency.


Again, you need owners/GMs, agents, and players willing to think things through.

The final side of this is if revenues are exploding and the FA playing field is shifting due to front offices leaning more on building from within and utilizing minor league depth, I think much more needs to be put in the pockets of minor leaguers - I'm not talking about just padding 1st round signing bonus slot amounts, I'm talking about significant pay and accommodations improvements across the board. If not significant pay increases in the minors, then perhaps the league minimum salaries need to be raised to give pre-arbitration players a bigger slice of the pie.


I think the answer may be all of the above. Up the slot amounts, especially in later rounds (say, to $250,000). Then do BOTH higher minor-league salaries and raising the league minimum.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#23

Posted: January 11, 2019, 7:41 AM Post
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JosephC said:
clancyphile said:
I think they should up the salaries for minor-league players: For Rookie-level, it should be $60,000 a year. A-level, $90,000. A+, $120,000. AA, $180,000. AAA, $240,000.



Add up the numbers to see how much money this totals and you will immediate recognize how questionable this is. 60k for a rookie league ballplayer who participates in something like 55 games during a rookie league season?


Not only that, but those players aren't even represented by the union until they are added to a 40 man roster. What those players make is a travesty, but absolutely nothing will be done as part of the CBA for those players since neither party has any interest in redistributing wealth to non-union players.

The MLB union is weak, and was taken advantage of. They got suckered into agreeing to make the luxury tax more severe, at a lower overall number, and the owners (*wink* *nod*) are treating the luxury tax threshold much more like a hard salary cap.

The solution is so much more complex than the NFL where you have equitable revenue sharing, a hard salary cap (and floor), but also non-guaranteed contracts. MLB players are going to want to reach free agency sooner than they currently do, which the big market teams would have no issue with. Those teams are going to be able to dish out contracts to premier talent right in their prime, and pre-free agency players are much more likely to wait it out rather than sign team-friendly extensions. But where does that leave teams who are not on equal footing in terms of revenue? You HAVE to fix the revenue-sharing for that to work, while also forcing the owners to spend those dollars on payroll. Obviously the revenue-wealthy teams will hate the idea of subsidizing their competition.

But if the new CBA ends up being a situation where players reach free agency sooner without drastically redistributing revenue, how will small market teams compete? They can no longer rely on "controllable" players if players reach free agency in 3 or 4 years of service time as opposed to 6.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#24

Posted: January 11, 2019, 7:47 AM Post
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To me, the problem isn't free agent compensation. i think the players are actually getting much closer to what their true value is on the open market than the drastically inflated salaries of the past. the problem is that the current cba makes it very profitable to keep players in the minors until the super two cutoff point causing players to have to play a whole extra season with their original team, as well as causing them to receive fewer dollars overall in arbitration. The simplest solution to all of this would be that any days in the majors in a given season would count as 1 full year towards arbitration, rather than the convoluted system that currently exists. Another solution could be completely eliminating pre arbitration years, putting all players into the arby process immediately upon arriving in the majors. The owners would never agree to all of that, but If I was the players union, I would focus on getting the younger players paid more so that and getting them to the majors faster, so that their eventual payday in free agency isn't the only way for them to get paid.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#25

Posted: January 11, 2019, 9:06 AM Post
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pogokat said:
To me, the problem isn't free agent compensation. i think the players are actually getting much closer to what their true value is on the open market than the drastically inflated salaries of the past. the problem is that the current cba makes it very profitable to keep players in the minors until the super two cutoff point causing players to have to play a whole extra season with their original team, as well as causing them to receive fewer dollars overall in arbitration. The simplest solution to all of this would be that any days in the majors in a given season would count as 1 full year towards arbitration, rather than the convoluted system that currently exists. Another solution could be completely eliminating pre arbitration years, putting all players into the arby process immediately upon arriving in the majors. The owners would never agree to all of that, but If I was the players union, I would focus on getting the younger players paid more so that and getting them to the majors faster, so that their eventual payday in free agency isn't the only way for them to get paid.


This is generally detrimental to small market clubs. Trying to balance big market clubs, small market clubs, and players wants/desires is going to be extremely difficult. I think the right answer is basically the nfl model. Salary cap, salary floors, drastically increased revenue sharing, significantly decreased team control. Big markets would hate it, I can't imagine players would dislike it assuming the floors/caps guaranteed players what they considered a fair market share. If the floors were set at 42% of revenue and the caps around 50%...can't see how they could complain.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#26

Posted: January 11, 2019, 9:06 AM Post
Posts: 3829
Location: New Berlin, WI
pogokat said:
To me, the problem isn't free agent compensation. i think the players are actually getting much closer to what their true value is on the open market than the drastically inflated salaries of the past. the problem is that the current cba makes it very profitable to keep players in the minors until the super two cutoff point causing players to have to play a whole extra season with their original team, as well as causing them to receive fewer dollars overall in arbitration. The simplest solution to all of this would be that any days in the majors in a given season would count as 1 full year towards arbitration, rather than the convoluted system that currently exists. Another solution could be completely eliminating pre arbitration years, putting all players into the arby process immediately upon arriving in the majors. The owners would never agree to all of that, but If I was the players union, I would focus on getting the younger players paid more so that and getting them to the majors faster, so that their eventual payday in free agency isn't the only way for them to get paid.


This is generally detrimental to small market clubs. Trying to balance big market clubs, small market clubs, and players wants/desires is going to be extremely difficult. I think the right answer is basically the nfl model. Salary cap, salary floors, drastically increased revenue sharing, significantly decreased team control. Big markets would hate it, I can't imagine players would dislike it assuming the floors/caps guaranteed players what they considered a fair market share. If the floors were set at 42% of revenue and the caps around 50%...can't see how they could complain.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#27

Posted: January 11, 2019, 9:08 AM Post
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What they probably should do is just get rid of arbitration and let players become free agents instead. Then players would get their "worth" in their peak years instead of waiting until they are 29, 30, 31 years old.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: Baseball's Financial System and another strike/lockout...
#28

Posted: January 11, 2019, 10:02 AM Post
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homer said:
What they probably should do is just get rid of arbitration and let players become free agents instead. Then players would get their "worth" in their peak years instead of waiting until they are 29, 30, 31 years old.


And your Milwaukee Brewers would truly become the Washington Generals.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#29

Posted: January 11, 2019, 10:43 AM Post
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All of the current rules that are part of the CBA are meant by the Union to maximize the % of revenues that goes to player salaries (P%) and for the owners to set in place a structure to minimize the % of revenues that the owners have to pay (O%). To me the issue comes down to the two parties agreeing on a hard % of revenues to be dedicated to player salaries (P% = O%). Once that is decided for a CBA, each year baseball goes about it's business and at the end of the year when Revenues are finalized and player salaries are known then the percentage of revenues that is player salaries (PS%) can be calculated. If PS% is less than O% then the owners will disburse the difference to the players based on the unions instructions/guidelines. If PS% is greater than O% then owners would adjust final player paychecks to deduct salary based on union guidelines. The owners decide how they will apportion costs if they have to pay the players or how they reclaim revenue if players are paid too much. The players/union decides how to disperse salary or how players would be taxed to make up the difference. These guidelines could even change year to year, but would need to be fixed by opening day to give plenty of time to make adjustments at the end of the year. Both the owners and players get a known % of revenues towards player salaries that is fixed throughout the contract. The only future negotiations would be what % of revenues are fixed for player salaries.

Most of the remainder of the current process can be retained to help small market teams compete with large market teams. I would change one part of the process:

players have three options, the first option cost the team nothing, the second and third options reduce the years of minimum salary by 1 for each option and increase the years of arbitration by 1 for each option such that players with the indicated options used have the indicated years of Minimum salary and arbitration:

0-1 options used --> 3 years minimum salary, 3 years arbitration
2 options used --> 2 years minimum salary, 4 years arbitration
3 options used --> 1 year minimum salary, 5 years arbitration

For many of the fringe prospects, there wouldn't be any real impact as they aren't going to earn huge arbitration salaries or may be let go from an organization sooner if their 3 options are used. For real high-ceiling prospects it reduces a teams ability to stash them in the minors for as long as possible and if a team decides to go that route then the player will ultimately benefit by getting to arbitration faster.

Another change I would install is the ability of teams to offer a proportion of a free agent contract as not guaranteed (75% max any year, max of 50% of total contract). So if a team releases a player who signed a FA contract he only receives the guaranteed amount. While the players union would scream at this under the current CBA, if the next CBA has the fixed revenue sharing % for player salaries then there really isn't an issue as any lost salary because of the non guaranteed part of the contract will come back if player salaries don't reach the agreed upon %. Teams would likely be much more willing to hand over bigger/longer contracts if they had some ability to end their commitment and recoup some savings.

Owners and players should just agree on a fixed % of revenues going for salary and most of the issues that come about are mitigated by that agreement and the silly negotiation over each of these rules aren't necessary as they don't impact total dollars.

Forgot: As part of the change to options, you would need to adjust the requirements of adding players to the 40-man (the Rule V eligibility would have to be adjusted to give teams more time before requiring them to be added to the 40-man)

JosephC said:
Stearns probably had no interest in getting a C because the Brewers need a C. It makes much more sense to trade for 3B when it's not needed, and then move the other 3B to 2B, then trade for a 2B, but since the 3B is now at 2B, then the new 2B goes to SS


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Offline  Re: Baseball's Financial System and another strike/lockout...
#30

Posted: January 11, 2019, 11:08 AM Post
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FVBrewerFan said:
homer said:
What they probably should do is just get rid of arbitration and let players become free agents instead. Then players would get their "worth" in their peak years instead of waiting until they are 29, 30, 31 years old.


And your Milwaukee Brewers would truly become the Washington Generals.


I dunno. There'd be so many guys as free agents it'd probably water down the total amount spent. Back in the day Charlie Finley, the A's owner, wanted every player to sign one year deals and every player would be a free agent each year. The players didn't want it because they knew it'd drive salaries down.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: Baseball's Financial System and another strike/lockout...
#31

Posted: January 11, 2019, 11:22 AM Post
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homer said:
FVBrewerFan said:
homer said:
What they probably should do is just get rid of arbitration and let players become free agents instead. Then players would get their "worth" in their peak years instead of waiting until they are 29, 30, 31 years old.


And your Milwaukee Brewers would truly become the Washington Generals.


I dunno. There'd be so many guys as free agents it'd probably water down the total amount spent. Back in the day Charlie Finley, the A's owner, wanted every player to sign one year deals and every player would be a free agent each year. The players didn't want it because they knew it'd drive salaries down.


Look at the roster. Sure, Braun would make a lot less but look at some of the others. Yelich, Hader, Knebel, Aguilar, Shaw, Burnes, etc. No way they could keep all those guys. They could use Braun's salary to pay some of them but they would lose Yelich for sure, probably Hader or Shaw. And that's this year. If Burnes, Woodruff, Peralta, Arcia all improve in the next year or two no way you can keep most of them either.

Put in a hard cap, I will be willing to negotiate FA.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#32

Posted: January 11, 2019, 1:14 PM Post
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Honest question, does either side care at all about competitive balance?

All the players want is more money. And while I'm sure owners would prefer to have a winning team, ultimately whatever they bring to the table will have making sure their clubs are profitable first and foremost.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#33

Posted: January 11, 2019, 4:52 PM Post
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Revenue is up yet minor league salaries are a joke and people are paying more to go to games. There is more to it than just MLB salaries.

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: Baseball's Financial System and another strike/lockout...
#34

Posted: January 11, 2019, 5:44 PM Post
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I keep coming back to how the value of the Brewers has quadrupled ($220 million to about $1 Billion) since Mark A bought the team. With a new TV contract coming, plus revenue sharing, etc I'm just not seeing how a "small market" team like the Brewers can't do a lot more with payroll especially in the contending seasons.

I'm definitely on the players' side with this.

The David Stearns era: Controllable Young Talent. Watch the Jedi work his magic!


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Offline  Re: Baseball's Financial System and another strike/lockout...
#35

Posted: January 11, 2019, 6:06 PM Post
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homer said:
Revenue is up yet minor league salaries are a joke and people are paying more to go to games. There is more to it than just MLB salaries.


So true. It shocks me every report I see about how little minor leaguers make.

"I wasted so much time in my life hating Juventus or A.C. Milan that I should have spent hating the Cardinals." ~kalle8

Twitter: @MKEHiker
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Offline  Re: Baseball's Financial System and another strike/lockout...
#36

Posted: January 11, 2019, 6:12 PM Post
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I think if teams want to retain 6 years of control they'll need to seriously up the league minimum and have earlier arbitration years or something.

The David Stearns era: Controllable Young Talent. Watch the Jedi work his magic!


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Offline  Re: Baseball's Financial System and another strike/lockout...
#37

Posted: January 11, 2019, 7:50 PM Post
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There won’t be a work stoppage. However, the union will push for things besides “more days off” like last time. A salary floor is possible. More revenue sharing so more teams can spend freely. Less punishment for signing free agents. I prefer teams not losing picks, but rather teams getting extra picks for net acquisitions (like the NFL does).


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Offline  Re: Baseball's Financial System and another strike/lockout...
#38

Posted: January 11, 2019, 8:07 PM Post
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From the player's perspective I don't know if "seriously upping the major league minimum" would be all that great for its members. Obviously they'll be getting more money, and they'll like that, but it will result in older 4A players being priced out of the league pretty quickly. Why pay the veteran "premium" for Eric Sogard or some end of the line 35 year old starting pitcher when you could call up some minor league scrub and get the same production for much less of a cost. Basically the bottom barrel union talent would never vote for that and the guys it would actually benefit aren't even union members to vote in favor of it.


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Offline  Re: Baseball's Financial System and another strike/lockout...
#39

Posted: January 13, 2019, 10:14 AM Post
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FVBrewerFan said:

Look at the roster. Sure, Braun would make a lot less but look at some of the others. Yelich, Hader, Knebel, Aguilar, Shaw, Burnes, etc. No way they could keep all those guys. They could use Braun's salary to pay some of them but they would lose Yelich for sure, probably Hader or Shaw. And that's this year. If Burnes, Woodruff, Peralta, Arcia all improve in the next year or two no way you can keep most of them either.

Put in a hard cap, I will be willing to negotiate FA.


Again, the pool of available players league wide would be such that all those guys listed wouldn't be signing for massive deals so possible Brewers resign many of them. And you are listing guys that we'd lose but not thinking about who we might gain. It's not like those guys, if they left, would all be replaced by Johnny AAAA.

It would make for a lot more roster turnover which is why as a fan I wouldn't like it (I prefer to watch guys on the same team for several seasons) but it would certainly allow players to get their "worth".

"Dustin Pedroia doesn't have the strength or bat speed to hit major-league pitching consistently, and he has no power......He probably has a future as a backup infielder if he can stop rolling over to third base and shortstop." Keith Law, 2006


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Offline  Re: Baseball's Financial System and another strike/lockout...
#40

Posted: January 15, 2019, 8:41 AM Post
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DHonks said:
There won’t be a work stoppage. However, the union will push for things besides “more days off” like last time. A salary floor is possible. More revenue sharing so more teams can spend freely. Less punishment for signing free agents. I prefer teams not losing picks, but rather teams getting extra picks for net acquisitions (like the NFL does).


I think the next big thing will be a forced salary floor for teams. It's something the NBA does - you can be below the floor, but the guys who played for you that year just get paid out based on roster-time whatever amount you're below the floor.

Right now, teams who are rebuilding have no reason to spend any money -- and if the big markets are going to dip under the Luxury tax every 3-4 years to avoid that 50% penalty, that's a huge amount of revenue that isn't going to the players (even if the Luxury tax funds only go to them indirectly) -- if they are aiming for that 50% number. The Yankees last year had ~650M in revenue and spent 165M on salaries.

"I wasted so much time in my life hating Juventus or A.C. Milan that I should have spent hating the Cardinals." ~kalle8

Twitter: @MKEHiker
Website: http://www.mkehiker.com


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