Why some agents have serious concerns about MLB’s next CBA
Baseball commissioner Rob Manfred said last week that he was optimistic a new collective-bargaining agreement could be reached in "relatively short order."
While most in the sport would celebrate a resolution prior to the current CBA’s Dec. 1 expiration, some player agents fear that the new agreement will feature only minor tweaks, rather than the major revisions they believe are necessary from the players’ perspective.
The agents, who spoke on condition of anonymity due to the sensitive nature of the talks, are concerned about trends in free agency that they perceive to be troubling, and money that is going to unproven Cuban players rather than established major leaguers and domestic amateurs, among other issues.
The players’ union is the certified representative of the players in collective bargaining, but internal differences of opinion during labor talks are not unusual on either side; agents might differ with union officials, just as owners from low-revenue clubs might disagree with owners from high-revenue teams.
One prominent agent, however, said the current CBA is "replete with provisions that have a practical impact of depressing salaries while cloaked in the delusional belief that it promotes parity."
The agent asked how competitive balance is enhanced when teams:
*Are not penalized for spending under a certain payroll threshold the way they are for spending above one.
*Do not always reinvest revenue-sharing money in their own clubs (a concern echoed by some high-revenue owners).
*Are incentivized to seek the highest possible draft positions and most pool money.
*Gain draft picks for losing elite free agents, regardless of market size or revenues.
For each of those points, baseball offers a counter-point:
*The owners have proposed "payroll floors" in the past, but the union has resisted, opposing spending limits at both ends and preferring the clubs to police themselves. The union, however, did agree to a luxury tax that serves as a drag on salaries; the agent wants to introduce the same concept to stimulate spending on the low end.
*The CBA allows the union to file grievances when it believes teams are not reallocating their revenue-sharing money properly; the Marlins agreed to increase spending in 2010 to avoid a grievance. The union has not filed any complaints during the current agreement.
*Rebuilding teams will not necessarily end up with the highest picks in ’17. Several clubs accused of "tanking" — the Braves, Phillies, Reds and Brewers — have performed better than expected and/or improved during the course of the season. Other clubs with championship aspirations flopped, including the Twins, Diamondbacks, Angels and Rays.
*The owners agreed to the qualifying-offer system as a concession to the union, which wanted to subject fewer players to draft-pick compensation than in the past.
Agent Scott Boras, who declined comment for this article, has said he favors a revision of the system in which teams would pay a financial penalty rather than lose a draft pick for signing an elite free agent. High-revenue clubs reluctant to lose draft picks likely would be more inclined to spend under such a plan.
Other ideas suggested by agents for changing draft-pick compensation include:
*Allowing clubs that lose an elite free agent to gain a supplemental pick without the signing club losing a top selection.
*Penalizing a club that signs such a player with the loss of a second- or third-round pick rather than a first rounder.
The owners almost certainly would oppose the first idea and also might oppose the second.
As in any negotiation, any concessions that the players gain in the qualifying-offer system would need to be balanced against what they would give up. The system, while more onerous than the union envisioned, affects only a handful of free agents each offseason.
Boras believes the greater issue is that the game needs to attract more young superstars. To do that, he would return the amateur draft to something close to its previous form, with fewer restrictions on spending. The previous system, which Boras and other agents frequently worked to the benefit of their clients, would be one way to redirect money going to foreign players back into the domestic system.
The industry certainly is not hurting for cash — Disney, for example, recently purchased a one-third share in Major League Baseball Advanced Media, valued at a reported $1.1 billion — or about $36.7 million per club.
Agents, naturally, want more of that money going to their players.
One agency conducted a study of the 2016 Article XX(B) free agents — players who qualify for free agency by attaining six or more years of major-league service. The study excluded 17 players who might have distorted the analysis – players who retired, who would be injured for all of ’16, who signed in Japan or who were being paid under a previous contract.
The study found that:
*More than 50 percent of all free agents (54 percent) took a paycut in 2016 from their 2015 salaries.
*Over half of the 2016 free agents signed for less than $3 million annually, which was the average salary seven years ago, in 2009 ($2,996,106). Additionally, 44 percent of last winter’s free agents signed for less than $2 million.
*As of Opening Day, 10 percent of the free agents were unsigned, as opposed to 5 percent last year.
In addition, the study noted that the overall median salary decreased from $1.65 million to $1.5 million, as reported by The Associated Press.
Baseball counters with its own numbers.
Clubs spent $2.3 billion on Article XX(B) free agents last offseason, $600 million more than in any previous market. The free-agent class established records for highest average annual value for a pitcher (Zack Greinke, $34.4 million) and total guarantee for a pitcher (David Price, $217 million). Eight players signed contracts with AAVs above $20 million, matching the total from the last three offseasons combined.
The deals at the top of the market helped increase the average salary from $4.18 million to $4.36 million — a number that, in baseball’s view, represents a more accurate depiction than overall median salary, which is the midpoint of the total distribution.
Any downward movement in the market also reflects a growing preference by teams for younger talent, as well as an increasing number of players who sign club-friendly contract extensions rather than wait for free agency.
Starting pitchers, in particular, welcome such extensions as they perform under the threat of injury. The upcoming free-agent class is particularly weak in starters; Dodgers left-hander Rich Hill, Mets right-hander Bartolo Colon and Phillies righty Jeremy Hellickson could be the best available.
The trend toward extensions might be irreversible; many players want their first fortune guaranteed. But it’s other trends that some agents find troubling. Whether the next CBA addresses their concerns remains to be seen.