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Monday, December 07, 2009
The relic that is the compensation system
Bill James:
but what needed to be explained was WHY management constructed this system to begin with. At that time--the negotiations surrounding the 1981 strike--the commissioner’s office under Bowie Kuhn (and with Ray Grebey leading the negotiation effort) had a vision of creating a salary structure, a “pay scale” that would keep salaries in line. They were pushing this “compensation system” in the hopes that it could be converted into a pay scale. That was the original purpose of it. They were hoping that, if they could get the union to AGREE to a system of compensation for one purpose, they could flip that into a general pay structure.
I thought that was interesting. It was not so much to get a compensation system to devalue players, but as a way to get a salary structure in place. Insofar as what the compensation is actually used for, I said:
I agree that if you have a compensation system, you should tie it to the salary. It’s so nice and simple. What happened to the Orlandos (Cabrera, Hudson) last year, was terrible.
But, I question the need to even have a compensation system for “free” agents. It’s a relic from when teams/players didn’t really know what would happen with free agency. Other sports don’t have this idea, probably because the MLB experience showed them it was unnecessary.
And in reply to Bill: “But the contrast is based in part on the failure to realize that reality is ALWAYS messy. “ I said:
To your point here, it’s possible. For example, the “Super 2s” was a simple enough “top 17% in service time for the 2+ to less than 3 years”. And now you have teams holding players back, hoping to get them under the line. And 172 days is a service year, and Longoria just misses by a day or two. And JJ Hardy’s 20-day stay in the minors costs him a year.
All these problems happen because of “tier-ing”. And, if you make the top say 20% of salaries get compensation, then you may get alot of this jockeying around, perhaps alot of bonuses paid out to lower the guaranteed portion, etc.
So, yes, you may be right. Perhaps adding a provision that a Type A would have to not only be in the top 20% of the silly ranking system (SRS), but also top 20% in salary. That might blunt it.
That said, scrap the entire concept of it as outdated.
It is a flawed system that appears to be intended to generate some stability - a player is worth more to his own team than he is to any other team. Basketball does this at the top end - the maximum salary that a player can sign for is lower if he changes teams. I think baseball was going for something like this, but managed to catch a lot of roughly average to slightly above-average players in the mechanism.
An alternative that would have some of the same effects would be to make all compensation in the form of sandwich picks - the signing team gives up nothing directly but the team that loses a player gets a pick between the first and second rounds, or at a lower ranking the pick would be between rounds 2 and 3. This would avoid the Orlando problem while still giving something back to teams that lose players. One caveat, the sandwich pick rounds might end up very long.