It’s been two days since the owners and players agreed on a new collective bargaining agreement that gave us a new system for the international signing period. More and more details have come out since the initial deal was agreed to. Let’s review the quick points:
- Every team will have between $4.75M and $5.75M of “cap space” to use each year. It is a hard cap, with no ability to go over.
- Teams can trade for up to 75% of their initial cap space, so they could increase their cap.
- Under the old system players over the age of 22, who had pro experience elsewhere (Cuba/Taiwan/Japan) of at least 5 years in such a league, were eligible for big league contracts and not subject to signing pools. The new system now says that players must be 25 years old. Zach Buchanan of the Cincinnati Enquirer reports that there may be an exception for Cuban players who have at least six years of pro experience.
Being able to trade for cap space is good to see. One of my complaints when details were leaking was that some teams were not going to use their entire space, so the roughly $150M cap space wasn’t likely to be used, so the available number was just that, a number. I still don’t think we will see all of the money used, but I do think that being able to trade for more space will allow a larger percentage of it to be used.
This could come into play in a big way for the Cincinnati Reds over the next two years since they are still facing penalties for signing Alfredo Rodriguez and Vladimir Gutierrez and going over their allotment in 2016. It means they will be unable to sign any single player for more than $300,000. The Reds will be one of the teams that get $5.75M if I understand the rules correctly, but there’s next to no way they will be able to spend that while being so limited in funds they can use on any one player unless they just drastically overpay for guys that would normally sign in that $100-200,000 range just to bring in larger talent pools and hope the numbers game works out on a few guys since they can’t play the “high quality” game because of the restrictions against them.
While you’ve been able to trade international “money” in the past, the cap space wasn’t likely as valuable as it will be moving forward. Teams were more than willing to go over their cap space and just face the penalties. That’s no longer an option, which makes that extra money very valuable. My guess based on past values of players, which could change because of how the system is now structured, that the Reds could have somewhere around $2-4M that they could be looking to trade in each of the next two years simply because it’s probably not going to be able to spend that money wisely in this system.
If you’ve been following the site for any amount of real time you know that I’m a big proponent of paying amateurs and minor leaguers more money. They are worth more money and at this point, it’s easy to prove that they are worth significantly more money than they are being paid, but since their pay is controlled and set for them, there’s not much they can do about it. One of my big complaints this go-around is that the players agreed to cap the spending on international players.
Before any deal was announced, one idea that I had, was to take the amount of money spent on international players (that were eligible for the pools, not players who signed big league contracts) from the previous three years, average that out (including what teams paid in penalties, because that is money that they were actually willing to pay to acquire the players) and set that amount as the new, total amount allowed for spending. Then, much like the Rule 4 June draft, set it to grow at a small amount each year to keep up with revenues.
In 2015, the last full signing period that there was, teams spent just over $300M, so the step back was huge in terms of money that is now allowed to be spent. But, if we go back to my original plan, things do start to look a little bit better. For the three signing periods from 2013-2015, the average spent between the three periods was $177M. In 2013 and 2014, the total spent was just over $100M in each year. It was the last year that really saw things get wild, as the Padres (about $60M) and the Dodgers (about $90M) spent more on their own that all of baseball had spent in either of the previous two years, and they did so by almost 50%.
The total spending allowed is far more than teams spent in two of the last three full signing periods we’ve had (I’m not sure about the current signing period – the numbers aren’t available). Whether teams actually use all of that money is a different question, but if I am going to be fair in my writing and analysis, I have to say it’s good to see that it’s not as much of a drop off as I had initially thought it to be. The 2015 signing period really altered the numbers in a big way. While I still believe the market would pay drastically more if things were simply set up for open free agency with no penalties, the “step back” isn’t nearly as large as I had initially felt that it was.
It’s been, for the most part, the Cuban born players, who have really been the outliers in terms of getting the big money deals. They tend to be older than the 16 or 17-year-olds that are signed out of other Latin American countries, thus representing less risk and commanding higher prices. With some of them being able to skirt this, it does leave open some more money for the youngest group of players. At the same time, a player like Yadier Alvarez, who signed for $16M in July of 2015 out of Cuba as a 19-year-old, would now have no chance at that kind of money even with the Cuban exemption because of a lack of enough pro experience. It’s a drastic dent in the money he’s allowed to get despite clearly having much more value – all because teams and the players union colluded to artificially keep prices down.
With more details coming out, I’m less angry about how the new system is set up to work, but I still believe that the amateurs were once again sold out for trivial things – like MLB clubhouses now are required to have a chef, and spring training buses require two seats for every player. What does that actually cost a team? A few hundred thousand dollars a year over the course of the CBA (buying a new bus, plus the cost of the chef each year)? They got some things accomplished with free agent compensation and the qualifying offer, but for about ten guys a year that’s been a problem and the amateur system is going to change for hundreds of players. It’s certainly helpful for competitive balance when it comes to talent acquisition, at least on the surface, but for the amateur players, it’s just another day where their rights have been sold out for small concessions for big league veterans, and that’s a real shame.