Tigerdoc’s plan to fix baseball: The CBA edition

We are nearing the end of the season and with that will come negotiations on the expiring CBA agreement between the players and the owners. Certainly, there have been some negotiations ongoing, with the owners at least firing their first public salvo when they announced their plan to lower the CBT threshold $180 million but also have a salary floor of $100 million. I, like most fans think there is probably a better way to negotiate a new collective bargaining agreement. But I like most fans also realized that there is little chance any proposals we might make will actually see the final CBA. In any event I am still going to go ahead and do this and suggest what I think would make a good collective bargaining agreement. So here goes.....

Salary cap: The issue of a hard salary cap and baseball has generally been a nonstarter. I think there are several ways a salary cap could work in baseball. It is no secret that certain teams can heavily spend and out spend the competition. While there is no guarantee of success it certainly does and has increased the odds. So teams that cannot spend like the Yankees and Dodgers look for other alternatives to build contending teams. The problem with that is often requires trying to build a core of young talent and often requires several losing seasons. That has been very evident the past several years. And has led to charges of tanking. I think these charges are unfair given the current state of affairs in baseball. The current competitive balance tax threshold even with the recent changes is well higher than most teams can spend. It also has not been as restrictive on the top spending teams as many of them have no issue blowing past that threshold and paying the tax. The Dodgers for example are looking to be about $50 million over that CBT threshold this year. This leaves the majority of the league at a competitive disadvantage. You have to allow teams other ways of trying to build a competitive team, even if that means they have to endure losing seasons to do so. But what if we could change that? What if we could create an environment that puts all the teams on more equal footing.

That is essentially what a salary cap could do. It has worked wonders in the NFL to create parity. Yes, the dynamics of football are quite a bit different than baseball but make no mistake about it having the ability to turn your team around quickly is one of the hallmarks of the NFL salary cap. So, creating a system of parity in baseball could do wonders for fan interest and line both the players and the owner's pockets with ever-increasing revenues. So how could this work and baseball?

First would have to set the cap low enough to constrain more than just the highest spending teams. Currently the Los Angeles Dodgers, the highest payroll team, has a payroll over 5 times that of the lowest payroll team, the Pittsburgh Pirates. Because there is such a wide dispersion of payroll a floor is probably also necessary. Rob Manfred suggested $180 million and his recent proposal I would actually go lower, $160 million. But with that, I would also set a salary floor of $80 million, half the cap. The cap would be a hard one, meaning that the team cannot exceed it. Certainly, there would be a period of time to allow teams to adjust to this, but ultimately each team would have to get under this cap. If that means restructuring contracts, cutting players, whatever it takes. The one caveat would be during this work in period a player waived would still collect his salary but would not have it count as a hit against the team’s salary cap. The NFL has an intricate system for cap hits when players are cut. I would make it much simpler. After the work in period, you cut a player with a long-term contract, you take a full cap hit. Otherwise rich teams could spend freely and then just cut a guy later without cap consequences. Currently 10 teams exceed this number based on opening day payroll. On the flip side 6 teams are below the floor based on opening a payroll. There will be some who think the cap still is too high for some of the smaller market team and maybe it is. But this would constrain at least a third of the league based on current payroll levels. And if you include the floor over half the teams would have to do something different. Now since math is not always perfect and things do happen during the season, there would have to be at least some penalties in place for teams that exceed the cap or fail to reach the floor. They would be severe. They could include loss of draft picks, financial penalties etc. to remove any incentive teams would have to violate these levels.

In future years these levels could be adjusted based on revenue growth, percentage of total revenue, or some other formula, as long as it does not rise too quickly to create a more significant gap between the highest spending teams in the lowest spending teams. So why would the players except such a proposal. Because then you would guarantee them a percentage of the revenue to go along with accepting a cap. I would propose 50% of all the revenues for the players. Certainly, a salary cap as constructed would probably pay the players a lot less than that 50% mark. So that money would go to the players for them to decide how to divide that money among themselves. If you try to just calculate a salary cap based on 50% of the revenues are likely can end up with a level that is possibly higher than even the current competitive balance tax threshold. The goal of the cap and the salary floor is to narrow the amount each team can spend allowing smaller market teams the opportunity to be able to compete with the larger market teams.

Minimum Salary and Free Agency: Certainly, there is more to it than just a cap. I would propose several other things that would be in the players favor and would also help in making the league more competitive overall. First raise the league minimum salary to $1 million. All players on the 40 man roster not in the majors would make $250,000. Would lower the threshold to free agency to 5 years and arbitration starting after the second year. Or, if you really want to create some chaos make free agency start after 4 years. This would ensure better pay for younger players, a quicker path the free agency as well. This would essentially create more players in free agency overall. That would allow smaller market teams a better chance at getting good talent to their teams because of a larger market of players, and fewer teams that can literally just out bid them. It would allow teams to more quickly rebuild as well and give teams a better alternative to the long term rebuild. Currently there are a lot of mid-priced veterans that have difficulty finding jobs because younger players are less expensive. That would be less the case under this system. Also, the MLBPA could reward those veterans by through the money they would get through revenue sharing by making at least part of that money based on service time. So a 6-year veteran could easily accept the league minimum salary knowing he is going to make it back by accruing service time and getting that reward at the end of the year. Certainly, these changes would also make it much more likely that teams will exceed that salary floor. This would also remove the financial incentive teams have to go with younger players just because they are cheaper. Now they can go with the players that can most help them win which is the point.

Another point here is minor league pay. It needs to be addressed. The MLBPA should make minor leaguer players part of their union and negotiate for them. Union dues would be paid by MLB members only though as way to help out those younger players. Would have all minor league players make a minimum of $30,000 for Low A or below, with a $5000 raise as they move up a level. This would be adjusted up annually based on overall league revenues. Teams would also have to provide housing and other benefits to the minor league players. They should not have to sleep in cars, eat crappy meals or rely on host families to pursue their dream of playing in the majors.

Draft: The draft would still be necessary and important. 30 rounds is probably adequate and would set it there. Players not drafted would be free agents. Would get rid of the qualifying offer with the salary cap and thus get rid of draft pick compensation for losing a free agent. No need for that with this system as teams will have a lot of options in replacing a lost free agent. Also get rid of competitive balance picks as well. Smaller market and poorly performing teams don’t deserve extra picks. Just a straight 30 round draft for the 30 teams. I would still do a draft based on reverse order of records. With a capped system there isn’t a lot of incentive to do a long term rebuild and "tank" for draft picks so no reason to manipulate the draft. Would still use a slotted system and salary pool similar to what is used now for the draft. It seems to work well enough, though I would expand the time teams and picks have to reach an agreement. As far as international players would stop the current signing period system. Once an international player is 18 he can apply for the normal draft. Hence the reason for a 30-round draft and not a 20-round draft. The best international players will still get drafted and likely get paid pretty well and it would stop some of the back-room shenanigans that occur with the current system. Many of these kids work with sponsors. While some have the best interest of the player in mind, not all do. This would lessen their influence, but they will still be needed to prepare the kid for the draft and help them apply for the draft. Kids in the US don’t declare for the draft, they are just eligible or not eligible. But making international players declare would help in clarifying intentions and allow all teams access to international talent. I would also get rid of the rule 5 draft. While the Tigers have snagged some help from this draft recently, it is overall a cumbersome system. Replace that with a rule that makes any minor league player a free agent after 6 seasons with a team. If he can’t crack a 40-man roster by then he deserves the chance to find his fortunes elsewhere.

Revenue Sharing: MLB’s current revenue sharing plan is quite complex. It involves sharing national revenues equally, but the complexity comes in how local revenues are shared. It has created a system where some teams are net donors and others are net receivers (recently even the Tigers have been receivers in this system). It also creates an extra incentive to "tank" as teams that do this have an additional revenue source to help them remain profitable while going through the losing that occurs with a long term rebuild. I would simplify this. All national revenue, which includes TV, merchandising, playoff, internet, etc., would still be divided equally among all teams. Local revenue sharing would be restricted to 50% of ticket sales. Home team pays 50% of its ticket sales into a pot that is divided evenly among all the teams. Everything else local, including TV and radio, concessions, parking are kept by the teams. Since 50% of revenues are guaranteed to the players, that money would come out the national revenues and the ticket sales pot before it is divided up among the owners. Given the salary cap, small market teams can still be competitive and profitable without needing transfer payments under the current system. It would also remove another incentive for "tanking." Rich teams get to keep more of their local revenues.

Season Length and Playoffs: I would change the length of the season to 150 games, essentially lopping a week at the beginning and the end of the season. Stinky weather in the north makes starting games in late March or early April a crapshoot, so why punish the players or the fans? With this though comes and expanded playoff system. Traditionalists will hate this but let’s face it, playoff baseball is exciting and very profitable. An expanded playoffs also helps create a system were more teams go for it and lessens the incentive to "tank." Expanded playoffs would also more than make up for the lost revenue of dropping some regular season games. Players and ownership both benefit from this and so do the fans. In order to be fairer though, would create more balanced scheduling so that a team in a weak division cannot overly inflate their record by beating up on the weak teams in their division. Would still have interleague play, with a universal DH, and use head to head and strength of schedule to break ties instead of one game playoffs. Players have always wanted a share of playoff revenues and would essentially get a piece of them since they get 50% of league revenues. With the shorter regular season, the playoffs could start a week earlier and still get done in late October or at worst very early November.

So how far to expand? I would go with 7 teams giving the best team a bye. Best 3 of 5 in the opening round, with best of 7 in subsequent rounds. If we expand to 32 teams at some point, then would expand the playoffs to 8 teams. Would be a risk that a team less than .500 would make the playoffs but currently, at least 8 teams are at .500 or above in each league. With increased parity that becomes a smaller risk as well. Might need to tighten up the schedules with expanded playoffs to finish by the end of October, but that is not a bad thing. It would make teams use more of their rotations and if weather is an issue, maybe play some doubleheaders in the playoffs.

Pace of Play: In order to increase interest in the game, which will increase TV viewership, game attendance, and thus revenue, baseball has to address pace of play. What I would do with this is enforce the current rules. Pitchers are supposed to take 20 seconds between pitches, no more. Well start enforcing this. Put a pitch clock in and don’t turn it off. Make it so it can be seen by both the pitcher and hitter. If the pitcher is going to stall and throw the ball at zero, the hitter will be ready. The gamesmanship of stalling would be replaced by the pitcher trying to vary when in the pitch clock he delivers his pitch. Also do not turn it off when runners are on base. Just reset it if he throws to a base. Also give the ump the discretion to call a balk on the pitcher if in his mind the pitcher is throwing over to a base too frequently as a way to stall. Hitters are not to leave the box between pitches except for injuries or equipment issues (broken bats). This would speed up the whole dynamic of the pitcher vs hitter that is the main reason for the slowing of the pace of play. Start this in the minors for a year or two to work out the kinks but then fully implement it at the majors. If a hitter isn’t in the box when the pitch is thrown it is a strike. If the pitcher does not throw the pitch within 20 seconds, then the ump calls a ball. While the kinks are being worked out in the minors the majors can be working on speeding up their play in preparation. Could still have a pitch clock to help them though they would not rigidly enforce it. Even with all the focus on the three true outcomes, the game is still pretty exciting and would be more exciting if the pace were quicker.

Final Thoughts: I have no delusions that MLB will end up with a cap. Players and owners are far too entrenched in their current positions to think outside the box on such a proposal. But such a proposal has benefits for both involved.

For the owners, they get cost certainty regarding player salaries and their share of the revenue. Maybe they balk at 50% but maybe another percent would satisfy both them and the players. They also get expanded playoffs which would be wildly profitable for them. Some of the higher revenue and spending teams would balk at a cap as a constraint on them, but they get the benefit of sharing less of their local revenues as well as less up-front player costs the cap would bring. A more competitive league and expanded playoffs stand a great chance at attracting more fans, especially if they can play the game at a quicker pace. That will translate into more money for everyone. Some small market teams might not like less transfer payments but the ability to be able to compete on a more equal footing with the high revenue teams will improve their product and increase their local revenues, more than likely to offset the loss of those transfer payments. And a game that grows overall and is more profitable will certainly increase their pot of money. Sharing a percent of revenue with the players would mean the league has to be transparent in regard to their finances, something the owners have been reluctant to do. But the chance to have cost certainty on player salaries and grow the game overall should override that reluctance

For the players, having a percent of revenue and transparency on league finances is a big carrot to their agreeing to this. A cap would constrain superstar contracts some, so the best players might balk at this. But it overall benefits the large majority of the MLBPA who are not superstars. They get better minor league pay coming up, better pay in the early part of their career, and earlier entry into free agency. And the chance to have a pot of money they control is a huge incentive. They also have the ability to move around more freely and are less likely to get locked out of a job as they age just because younger guys can be paid less. More teams trying to compete means more teams willing to give good veterans a job.

So it seems to me at least, that a capped system has an opportunity to make baseball more competitive and more profitable.

This is a FanPost and does not necessarily reflect the views of the <em>Bless You Boys</em> writing staff.