It’s high time to end free agent compensation

As I have mentioned previously, free agency 2.0 is terrible. We as fans spent a good six months waiting and waiting for the best free agents to be signed, improving the overall play of the league, and instead watched teams say their current team was “good enough” while waiting out the draft pick compensation to sign both Dallas Keuchel (Braves) and Craig Kimbrel (Cubs).

It goes without saying that either team could have signed them in the offseason, but we all know it had nothing to do with need and everything to do with what they wanted to do, bottom-line wise. Yes, in the Cubs case it was even more egregious, whereby the only reason he is even wearing a uniform is because Ben Zobrist’s extended time off due to divorce proceedings gives them the cap space to stay under the luxury tax. Remarkable.

All of these mechanisms—the luxury tax, free agent compensation, penalties for international bonus pool money—were all billed at least as controls against disparity between teams. The Yankees shouldn’t have $300 million payroll while the Rays have a restrictive market, the saying goes, and that’s why these controls are in place. In fact, these teams never wanted to spend this money without the controls, and the controls are the kayfabe they needed.

Look for a moment at the actual compensation forfeited, or would have been forfeited if they had done it, for signing either Kimbrel or Keuchel. The only one with a “fairer” case were the Yankees, actually, who would have given up a first rounder and a full bonus slot, boosting the total payout to double of what it could have been.

Yet look at the actual negotiations and the Yankees merely held the line on a pro rata qualifying offer, meaning they said that $2 million was too much marginal pay to give up. When you think about that another way, it means that the free agent compensation acted as a buffer, causing the overall expenditure to rise just above what would be considered acceptable market rates. That’s not exactly a “free” market.

Which is where I’m going with this. Many of these new mechanisms are clawing back at the end of the reserve clause, a consistent theme of recent labor history. Anything to restrict the market, to narrow its ability to give players free latitude to bargain; that’s exactly what these do. Because by removing a team that needs Keuchel’s service because they “can’t” pay the total expenditure with the compensation, they otherwise would have been in the running for his services.

When one also looks at the other teams and their penalties, it’s even more laughable. The Red Sox, for example, do not even have a fifth starter, and their compensation forfeited is last in the league, because they would only give up the 138th pick, yet would have had to pay a competitive balance tax that may have been more. The Brewers would have given up about the same without the tax, and they currently have three starters on their official depth chart with both Jhoulys Chacin and Gio Gonzalez on the injured list.

Whether it’s actually kayfabe or serious budget constraints is kind of besides the point, right? The barrier shouldn’t exist and there’s no real reason, in this particular case, to reward teams for letting free agents walk away with a lowered market price attached to them. It also allows the onus to fall on the player that their demands were “too high” when the game was generally rigged against them from the start. The players are aware of this, and Josh Donaldson echoed this concern after Keuchel joined his squad:

This ordeal could ultimately backfire on owners, signalling to players that they are willing to engage in tacit agreements to hold you out for a half-season if you don’t play ball at a lower price. Luckily for the players, they’re the ones who actually play ball.