MLB Collective Bargaining 2006

The current four-year MLB collective bargaining agreement with Major League Baseball Players Association: News (MLBPA) will expire on Dec. 19. MLB & MLBPA will have to come into agreement for a new labor deal this off-season. One important potential change in the new deal is the draft pick compensation for free-agent signings. Currently, teams are compensated with draft picks in the following season if players on its roster sign with another team as unrestricted free agents. The draft pick orders are determined based on STATS Inc. player rating system. The "Sandwich Picks" (picks between the 1st & 2nd round) are Type A compensation picks for Top-tier free agents. There are Type B (in the 2nd round) & C (between 2nd & 3rd round) & other draft compensations, as well. An example would be this year's draft, where teams that signed free agents from another team have to "compensate" the free agents' previous teams with their draft picks. The change in the new collective bargaining agreement could eliminate that "compensation" of draft picks in regard to free agent signings.

This potential change in the upcoming deal could affect teams that have been taking advantages of the compensation draft picks, like OAK, KC, LAA, & TOR. The teams that thrive on managing their roster budgets and minor systems from draft picks would be hurt the most with the potential change. From an organizational operating point of view, it is certainly unfair & discouraging. The obvious reason being that if a player who is originally drafted by Team X has reached free agent status and decides to sign with another team, Team X loses the player and receives nothing in return. The scenario would possibly cause teams to manage their potential free agents differently. Most importantly, in a professional sport league, where no salary caps are in place, teams with limited budgets would be at serious disadvantage. An organization that makes smart draft picks would end up losing their good players as free agents and not be compensated for their leaves after their minor league contracts expire. Teams with high budgets would be able to sign all the free agents without paying or compensating the teams that lose them with any means, besides money to the players themselves. This could cause serious uncompetitiveness in MLB and imparity among teams with different budgets.

It is clear and obvious that the MLB salary and luxury tax system is critically flawed. Teams that earn more through media contracts & sponsorships have much higher budgets than those that operate either in smaller markets or with small fan-base. The current luxury tax that are enforced on teams that exceeds the limit does not require teams that receive them to spend it on player salary or facility enhancement. The extra payments received from the present luxury tax rule could be(and probably are) extra revenues for lower budgeted teams. The elimination of the compensation draft pick would further worsen the unbalanced player salary issue and ultimate team competitiveness.

and all of its teams & players. Teams with low budgets, like OAK & MIN, have found their way to be competitive in the last few years with the Rule 4 draft (Regular June Draft of first-year players) & other creative plans. These teams have managed to make the playoff without gigantic player salary budgets and have positive earnings. Taking away one tool those lower-budgeted teams have in free agent compensation draft picks would disrupt the overall balance among teams in regard to performance on the field and revenues off the field, eventually. It's unclear thus far of how the collective bargaining deal would be negotiated with new changes to current system. The importance of the resulting agreement is that it would improve MLB and its teams and players. MLB would find itself in a tougher situations with teams that have even larger imbalance between themselves. Teams may have to be contracted (a much nicer word than eliminated, which might be a better term in reality), especially those that operate in small markets and have little revenues to begin with. MLB should learn its lesson in the last decade from the strike to the almost contraction of teams. Fans have slowly get their interest back into the game. MLB should not disinterest or discourage them away, again. Let's keep the fans IN the game of baseball, not kick them out.

Just a thought, MLB... It's your turn.


Major League Baseball : Collective Bargaining 2006 page