THE BOOK--Playing The Percentages In Baseball

Isn’t the bargaining chip relevant, though?  The original team has the right to trade that potential compensation as they see fit.  Is that significantly different from allowing trading of draft picks, which I believe you’ve supported?

I don’t see why MLB has to be so different in this regard to the other leagues.  The other leagues allow trading of draft picks.  In order for the current MLB rule to make sense, you have to show either how the other leagues are wrong, or how MLB is unique.

Same deal for comp picks for “free agents”.  The other leagues make the players free, as free.  Why therefore is baseball so unique that a non-Canadian team needs to be compensated for “losing” Orlando Hudson and Orlando Cabrera?

Grandfather some players in if you must. Otherwise, repeal it.

Offering compensation only to the clubs who developed the players creates some rather perverse incentive regimes. It’s a much better idea to do away with compensation entirely and take a different approach to addressing competitive balance. Additionally, repealing the rule allows certain free agents to make more money (I’m thinking Type A relievers and the like), aka guys who really shouldn’t be Type A.

If you can forgive the self-promotion, I’d be grateful if you guys read this, because I always value your feedback and criticism:

http://www.athleticsnation.com/2009/1/15/725357/fixing-the-free-agent-comp

This is my proposal for fixing the FA compensation system.  The Cliff’s Notes:

Instead of making the compensation based upon previous year’s stats or an arby offer, make it entirely predicated on the dollar value of the contract that a player receives, which is a truer indicator of his market value than previous stats could possibly be.

I agree, I would go with that.  That’s only if you need to keep the comp system.  The best thing to do is do away with it altogether.

isn’t comparing the way things are done between the leagues an apples::oranges thing?  Shouldn’t we first delve into the history of why things are done differently before saying that baseball should be more like the NHL/NFL/NBA/PGA etc… Many of these rules were negotiated between the owners and union.  Each league and union is different and each sport evolved in its own way.  Sure, we may like one leagues system better than the others - but they are in place for a reason.  Just like many people think it is wierd that we don’t use a national popular vote for our presidential elections, but the electoral college system is in place for a reason.  It was basically negotiated in.  In other words it was negotiated in by the little guys to keep the big guys from dominating them.  These league differences will likely continue, and personally I enjoy the little nuiances between the leagues.  Perhaps some people would like it better if all four of the major NA sports leagues were all merged into one entity where one union represented all four leagues and one set of rules pertaining to the draft, performance enhancement, playoffs etc… were shared by each.

I am for baseball evolving, there are some quirky things (ie - the draft and compensation picks) and I enjoy discussions on improvements to the system, but I think what gets lost is that we lose sight of why these rules are in place and agreed upon by both the owners and union.

Xei: nothing is getting lost.  I already told you why it was there: they had no clue as to how things would evolve.

Is it strawman day today in this blog?

My questions still stand:
1. What makes baseball unique in this regard?
2. Are the other leagues wrong?

One aspect to FA that the NBA and NFL have but MLB does not is restricted FA.  I’m not sure about the details in either league, but I believe that the original team can match the offer made to a player or receive compensation if they lose a restricted FA.  I believe that restricted FA is for players w/ intermediate service time and thus is something of a substitute for arbitration, but someone who follows those leagues might correct me.

Also, the NBA rules encourage the practice of sign-and-trade, which amounts to de facto compensation (the Cavs for instance actually signed LeBron, traded him to the Heat, and got several draft picks).  So while the other sports do not have explicit compensation for unrestricted FA, they do have other mechanisms which result in compensation.

MLB doesn’t have a salary cap.  It has rich teams and poor teams.  That is a huge difference from other leagues and is directly related to why the compensation system exists.

The compensation system may hurt players by making them more expensive to acquire and to sign.  But I don’t see how getting rid of the system would help poor teams, at all (unless they’re the ones more likely to sign the “bad” Type A’s and B’s).

The NHL also has restricted FA.  The end result is that the players are more equitably paid than they are in MLB.  MLB’s system is designed for veterans to be way overpaid (or young players severely underpaid), while NHL has a fairer landscape in this regard.

According to RJ the teams that have gotten the most FA compensation picks over the last 10 years are ATL, BOS, and LAA. I don’t think that’s too surprising.  Unless a poor team is a contender, they’ll often trade the FA-to-be ahead of time, and if he ends up signing as a FA, it is the contender/rich buyer that reaps the compensation.  Of course, the existence of the compensation increases the value of the player as a trade chip, but not in cases in which the acquiring team is confident of resigning.

It also doesn’t help poor teams that are contenders to take their draft picks away when they are in a position to sign FAs.  A team relying on cheap talent might be more hesitant to sign a FA.  And not only does the existence of compensation drive down the market for FAs, the silly manner in which the players are rated can occasionally make players almost un-signable (like Juan Cruz, Type A FA).

#8: Yes, all three leagues have restricted-FA.  The rules are different for each, but I think in general, the original team needs to do a qualifying offer, and then they get right of first refusal.  Just checked the NFL Wikipedia page, and based on the amount of the qualifying offer, if a team loses a restricted FA, they may get no picks, a pick in the same round as the player they lost, or the first round pick of the other team.  If I read this correctly, it only applies to players who signed 3 or 4 year rookie contracts.  I’m not sure if the restricted FA rights transfer if a player is traded…

NFL teams *do* get compensatory draft picks for FA lost.  They are supplemental picks.  If you go here: http://en.wikipedia.org/wiki/National_Football_League_Draft and scroll down to “Compensatory Picks” you can read up on it.

Supplemental picks is not a depression of a player’s value, which is what we are talking about here.  From the player’s perspective, a free agent is totally free.

In MLB, the team signing him is “trading” draft picks to acquire him.

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If MLB set up their system like the NHL, in terms of restricted free agents, then a guy like Justin Verlander would have been offered a huge deal last year by some big market team.

I agree that the current system is baseball benefit the small market teams, because it prevents them from being in a bidding war.  This is what saves the Twins and Marlins and had saved the Expos.  The big market teams would love to have an NHL-type situation (without the payroll cap).