Appreciating the Freedoms of July 2nd

If you frequent this site and happen to be awake at 7:30am when my articles are typically posted, you may already be aware that the  treatment of amateur athletes is one of the only off the field topics which I truly care about. A major misconception about allowing teams to acquire amateur talent on the open market is that the large markets will dominate the market solely because the market is free of restrictions.

For those who are unaware, July 2nd is the date that 16 year old International Free Agents (IFA) are eligible to  be signed by any team.  Any player, with any team. An open market.

Of course, if teams sole aim was to acquire amateur talent the misconception about large market dominance would likely not be a misconception at all. The amount of money Yankees would invest into amateur talent would dwarf even their cross town rival's hefty payroll. However, teams have a multitude of priorities that require them to allocate resources to various needs - player retention, pre-arbitration raises, super-two and fourth, fifth, and sixth year arbitration awards, free agents, coaches, etc. etc.. Those needs evolve annually due to a general manager's philosophical preferences and a team's competitiveness.

Before I get into why I believe the IFA system should be - but obviously will not be - adopted by Major League Baseball for all amateurs, I'll brief briefly revisit one big issue with Major League Baseball's Rule 4 draft.

Major League Baseball's Rule 4 draft forces players to negotiate with one team.  Some argue that the implementation of a First Year Player Draft isn't inequitable because it was promulgated under the collective bargaining agreement (CBA) between Major League Baseball and the Players' Union (MLBPA).  To those observers who agree with the former point, I'd like to point out the obvious. Amateur ballplayers' interests are not represented by the MLBPA nor are amateurs members and that Major League Baseball is the only employer of professional baseball players in the world.[1]  A player subject to the Rule 4 draft has to abide by the CBA and the rest of MLB's governing documents, which again are negotiated without his interests in mind, or he has to forgo his dream of playing professional baseball. Major League Baseball will always be saturated with elite amateur talent because there is not another equivalent competing employer. In constract to say, European soccer, which has dozens of competitive leagues, teams, and most importantly employers willing to write checks.

Maybe a different analogy would be helpful. Imagine graduating with your masters in accounting and instead of having the option to negotiate with any of the "Big Four" you were drafted by KPMG, sent to their Torabaz Khan Road office in Afghanistan and told if you want to have a career in accounting you would need accept their offer. While considering their offer, remember you may have a 25% chance of succeding and being brought back to New York to continue your career. Then,  after working in New York for several years at a discount, you will finally be eligible to negotiate with their competitors, if you're still useful.

Luckily for Bud Selig, kids don't dream about being accountants.

On a similar note, there are some observers who argue that the Rule 4 draft's importance stems from the distribution of talent, rather than to suppress costs (a tangential effect), and those people I re-posit one question,

"...what would the reaction be if the owners implemented [the draft] for free agents? Each off season, the free agents no longer go on the open market, but rather they are drafted. The best players being drafted by the worst teams balancing competition while simultaneously artificially depressing salary."

If Major League Baseball and fans alike strive for the equal dispersion of talent why not institute this  type of draft?

As I said at The Book Blog, where I posted the original hypothetical, I assume everyone would be appalled.

Okay, okay.  Sorry for getting sidetracked.

An open market will not 1) suppress amateur signing bonuses (obviously) and 2) funnel elite amateur talent to large markets (see, IFA System).[2]

At least recently, teams have begun to take notice of the high return on investment[3] they receive when draftees succeed at the game's highest level. Well managed small market teams have invested heavily in the draft in hopes to develop talent that will advance the organization up the standings.  While teams have found this to be an efficient strategy, that doesn't necessarily mean that it benefits the players drafted. On the other hand, many of these same teams have invested in Latin American players and countries looking for similar results. In 2010 small market teams were not blown away by large market teams. In fact, overall payroll did not correlate at all with IFA spending.[4] Thus far in 2011, small market teams look to be holding their own.[5]

As long as Major League Baseball wants to suppress amateurs bonuses, they will.  Again, the MLBPA has no legitimate interest in opposing the owners except as using amateur players as a bargaining chip to help their members. In the current International Free Agent system, teams have been able to compete for elite talent regardless of their payroll. There is no reason why they would the same would not be true if the draft was abolished.

___________________________________________________________________________________________

[1] Read this post by JC Bradbury on the MLB's antitrust exemption. I agree with his first point in part, that the exemption does not stop other leagues from technically forming. However, I disagree - if it was implied - that a second viable league could actually exist.

[2] If, as time goes on, this was to change, I'd see no issue with raising revenue sharing or the luxury tax to force teams to be more selective about their spending. This keeps the money in the system and in the player's pockets. A salary cap would limit the amount of money available to players.

[3] This is a post I did recently at Bullpen Banter. I found that to this point the 2006 draft class already has produced a 400% return on investment. Next season,  I will reevaluate again at the end of the year.

[4] - Reformatted from BaseballAmerica.com and USA Today

Team

2010 IFA Spending

2010 Payroll

Seattle Mariners

$6,470,000.00

$86,510,000.00

New York Yankees

$5,270,000.00

$206,333,389.00

Houston Astros

$5,130,000.00

$92,355,500.00

Pittsburgh Pirates

$5,000,000.00

$34,943,000.00

Oakland Athletics

$4,730,000.00

$51,654,900.00

Toronto Blue Jays

$4,180,000.00

$62,234,000.00

Chicago Cubs

$4,160,000.00

$146,609,000.00

Texas Rangers

$3,570,000.00

$55,250,544.00

Atlanta Braves

$3,280,000.00

$84,423,666.00

San Diego Padres

$2,750,000.00

$37,799,300.00

Kansas City Royals

$2,700,000.00

$71,405,210.00

Minnesota Twins

$2,540,000.00

$97,559,166.00

Detroit Tigers

$2,530,000.00

$122,864,928.00

Cleveland Indians

$2,470,000.00

$61,203,966.00

St. Louis Cardinals

$2,470,000.00

$93,540,751.00

Colorado Rockies

$1,960,000.00

$84,227,000.00

Tampa Bay Rays

$1,730,000.00

$71,923,471.00

New York Mets

$1,690,000.00

$134,422,942.00

Boston Red Sox

$1,640,000.00

$162,447,333.00

Cincinnati Reds

$1,560,000.00

$71,761,542.00

Philadelphia Phillies

$1,490,000.00

$141,928,379.00

Arizona Diamondbacks

$1,400,000.00

$60,718,166.00

Milwaukee Brewers

$1,390,000.00

$81,108,278.00

Florida Marlins

$1,190,000.00

$57,034,719.00

Baltimore Orioles

$1,180,000.00

$81,612,500.00

Washington Nationals

$853,000.00

$61,400,000.00

San Francisco Giants

$849,000.00

$98,641,333.00

Los Angeles Angels

$617,000.00

$104,963,866.00

Chicago White Sox

$345,000.00

$105,530,000.00

Los Angeles Dodgers

$314,000.00

$95,358,016.00

[5] - Reformatted from BaseballAmerica.com

Player

Team

Nomar Mazara

Texas

Ronald Guzman

Texas

Elier Hernandez

Kansas City

Dawel Lugo

Toronto

Enrique Acosta

Chicago Cubs

Dorssys Paulino

Cleveland

Jose Ruiz

San Diego

Harold Ramirez

Pittsburgh

Manuel Marcos

Boston

Jose Garcia

New York Mets

Miguel Andujar

New York Yankees

Adelin Santa

Detroit

Luis Reynoso

Houston

Miguel Gonzalez

Minnesota

Elvis Escobar

Pittsburgh

Dewin Perez

St. Louis

Anthony Santander

Cleveland

Iosif Berna

Atlanta

Arturo Michelena

Houston

Francisco Miguel

Cleveland

Jose Godoy

St. Louis

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