There’s been a lot of coverage of the new Collective Bargaining Agreement between the owners and the MLB Players’ Association in the last few days, and most of it has focused on what it didn’t accomplish as opposed to what it did.
The on-field presentation of MLB isn’t going to change much – the rumored 26-man roster wasn’t introduced, and the change from a fifteen-day disabled list to a ten-day will barely be noticeable – and the off-field changes are either long overdue (the All-Star Game no longer determines World Series home-field advantage) or more finicky than sweeping (the changes to the luxury tax and the qualifying offer system). And most importantly, baseball won’t undergo any kind of labor stoppage, not even during the offseason. If you focus on how MLB’s product will be perceived over the next two or three years, this seems mostly like a continuation of the system that has made both players and owners a whole lot of money in the last decade, and made baseball enjoyable and fun.
But just because the biggest change won’t impact major league baseball much in the next five years doesn’t mean it wasn’t a massive shift, and one that the owners have to be incredibly happy about. The changes to international free agent signings are colossal, and they’re a disaster for international amateurs. Maybe that’s not a surprise, since those international amateurs didn’t have any representation at the CBA negotiations, but they’re also a disaster for the MLBPA, albeit a more slow-moving one.
Under the previous system, teams were allotted pools of money to spend on international free agents in a given year, with the size of the pool based on their record in the prior season. The pools in the current signing period run from just over $2 million on the low end to $5.5 million on the high end, but soon after the system was introduced, teams quickly determined that the players available were worth way more than the pools.
When teams went over their bonus pools, they were penalized with a whopping tax, that prevented them from exceeding their pools in either of the next two years. But they still went over frequently, and the way the penalties were structured meant they went over all at once, which is how we got Yoan Moncada signing for $31.5 million with the Red Sox in the same year that they signed Anderson Espinoza and Christopher Acosta. It wasn’t a perfect system – it was pretty complex, and didn’t line up with almost anything else in MLB – but it was one of the few ways MLB was paying young players something close to what they were actually worth. Naturally, that meant it had to stop.
Under the new system, the bonus pools are spread across a much smaller range – between $4 and $6 million – and based on “market size” rather than record in the prior year. Most importantly, however, there’s no mechanism for going over them. None. Teams can’t accept a penalty or a tax in exchange for spending more; they simply cannot sign any players that would push their total signings over their pool.
That’s a salary cap; not a soft cap, or a rolling cap, but a simple, hard salary cap. The MLBPA has traditionally been extremely averse to such caps, and for excellent reasons! In the prior international signing period, teams collectively spent about $200,000,000 on international players, and sent another big chunk of money in taxes to the league; under the new system, they’ll never spend more than $150,000,000. Salary caps let management (the owners) artificially suppress the salaries of labor (the players), keep them suppressed, and pocket the money they would’ve spent. They’re really, really bad for players.
Unions in other sports have accepted them, but generally in exchange for a similarly sized concession from owners: a guaranteed share of total revenues. As Nathaniel Grow discussed at FanGraphs earlier this year, the result of a cap and guarantee system is essentially a shifting of payroll from the extreme top-end of players to the mid- and low-end. The NBA has such a system, and that’s why LeBron James’s salary has the same number of digits as most of his peers, despite being better than all of them by a huge margin.
But the MLBPA has consistently, throughout its entire history, opposed a cap, even under a compromise system like the NBA’s, and that’s turned out to be a great position. A cap is a cap, and even with a corresponding guarantee, owners will often find a way to work around it; by keeping the market open and unbounded, the MLBPA has caused player salaries to skyrocket in the last few decades. This new international system, therefore, is one of the first examples of a true, hard cap being introduced to baseball.
That’s a big deal, and if I were a player, I’d be worried. Not to fear, says Tony Clark, former first baseman and current head of the MLBPA.
[Clark] told ESPN.com on Friday that he doesn't believe baseball's players' union abandoned that principle when it agreed to a hard cap on international signings in the sport's new collective bargaining agreement.
"This does not change the philosophy of this organization as it relates to caps."
Oh! That’s good. At least the MLBPA’s philosophical opposition to a salary cap is still intact, even though that philosophy didn’t actually do anything to stop the owners from getting one.
Over the course of that interview, it feels like Clark gets really close to a revelation, then turns away at the last second. The chain of reasoning he lays out starts with a simple, and correct, proposition: the domestic draft is deeply unfair to American, Canadian, and Puerto Rican players.
Just five months ago, a 17-year-old Cuban pitcher, Adrian Morejon, signed a contract with the San Diego Padres that guaranteed him $11 million. Meanwhile, less than two weeks earlier, the top pick in the June draft of American players, 18-year-old outfielder Mickey Moniak, signed with the Philadelphia Phillies for a little more than half that amount, at $6.1 million.
Clark points out that domestic amateurs have never received that much money, and that the differential has nothing to due with differences in skill between players. MLB has successfully suppressed the value of domestic amateurs to a level far below what they’re actually worth, and they’ve done so for a long, long time. These markets shouldn’t be fundamentally different, says Clark, so let’s line them up.
Yes! Great idea! Let’s do that! We have two markets, one that values young players at a level roughly resembling their value to teams, and one that suppresses their value an extraordinary amount so that already-super-rich old white men can keep that money instead. If we want to line these two markets up, which one should change to look more like the other? The terrible one, right? Apparently not. But focus on the bright side, says Clark; now young domestic players and young international players are all equally screwed.
I understand that I’m being glib, and that the union couldn’t simply make demands. The owners came in gunning for an international draft, and that would’ve been at least as bad as this system, probably. But what makes this concession truly distressing is that, for all appearances, the union didn’t get a single thing in exchange. They gave the owners exactly what they wanted, a way to save a ton of money this year and every single year in the future, and got nothing back. What positive changes are there for the players in the new CBA? The 10-day DL might help some of them, but it’s a common-sense change that will help teams just as much, so probably not something they had to bargain real hard for. Qualifying offers didn’t disappear, they just got more arcane. And luxury taxes went up, which will only serve to suppress salaries even more. There’s not a single big win in here for the MLBPA, meaning that this big loss came for no reason.
The single biggest reason this change happened is probably because the players getting screwed are not yet a part of the union. There’s a bigger conversation about whether the MLBPA should have any right to negotiate the contours of their compensation at all, given that lack of representation, but it at least explains why this happened. To the players, this might have seemed costless; after all, it won’t take any money out of their pockets.
But by signing on to this CBA, the MLBPA has normalized the idea of a salary cap, and given the owners something they value very, very much. They have screwed a great number of prospective players, players who very often come from impoverished backgrounds, players whom the MLBPA could be building solidarity with in order to fight the owners and gain greater control of the sport in the future. They have laid the groundwork for themselves to be screwed in another five years, by making a salary cap without any countervailing salary floor seem acceptable. In return, they got nothing. The biggest change in this CBA is a terrible one for the players.
Strikes should never be treated lightly. But they’re one of the only tools unions have in negotiations, and they work. The MLBPA didn’t have to accept this horrible deal, for themselves and their international brethren; they had another option. They didn’t use it, and someday, they’re probably going to regret it.