In Part 1, we discussed how the CBA is toxic. In this Part 2, we lay out the medicine that neither side is likely to want to take.
What should be done to “fix” the current CBA?
Given all of these factors and the history, what would a fair-minded person say the biggest issues are with the current CBA system?
- Older players have very low leverage in negotiations compared to the previous generation of players.
- Owners seem to not be sharing a “fair” degree of revenue with players. The CBT limit is not keeping up with the growth of revenue. A more equitable way of tying the CBT limit to revenue is needed.
- A way to restrict tanking teams from gaming the system by dramatically cutting payroll seems to be needed.
- Team control rules tend to make a player available for one real shot at free agency during a player’s prime earning window.
- Guaranteed contracts seem to be limiting the risk/reward each side is willing to accept.
So let’s propose the things both sides should agree to in the next CBA. Some of these proposals involve changes that one side or the other will not want to accept. For the health of the sport, however, nothing should be off the table.
Adjust CBT to be set to 55% of aggregate revenues of all teams including RSN revenue. Agree on a formula that would peg a salary cap at around $220MM in Year 1. The CBT might even become a hard cap if needed. Tying the CBT/cap to gross revenue as in the NBA and NFL will cause owners and players to work together to grow revenue.
- Both sides. Players get a tie to revenue. Owners potentially get a hard cap they have wanted for a generation.
- Big market owners – they would continue to not want the restrictions.
Set a salary floor set at 60% of the CBT/salary cap. If a team is below the floor, they are fined 50% of the difference, and funds are distributed to MLBPA to give to players. As an example, if CBT is $220MM, the floor is $132MM. If team payroll is $112MM ($20MM below floor), the fine is $10MM. This would force non-competitive teams to field more competitive teams. Potentially, a below-floor team might take on a bad contract to get to the floor if the other team gave them prospects to do so. This would accelerate the potential development of the below-floor team.
- Players. This system should cause more teams to be in the market for free agents. This would be the biggest win for players.
- The financial health of baseball. Overall attendance and interest will rise because fewer teams will enter the season uncompetitively
- Small market owners will be forced to grow payrolls with MLB revenues.
League-wide sources of revenue will need to flow even more to smaller market teams to enable them to keep up. Formulas for revenue sharing must be updated to reflect the need for small market teams to have access to revenue streams, allowing them to compete.
- Small market owners. Shared revenue streams will enable them to meet the floor requirements.
- Big market owners. They will rightly complain they are not reaping a fair benefit of the league-wide revenue streams
Team control years are reduced in a two-stage process.
- 1st year of CBA: Revise the definition of yearly service time downward to require only 50% of service days (about 94 days instead of 172). Under this revised system, a player’s service time count as a full year if he has more than half of the yearly service days. This will reduce a team’s willingness to delay promotion of prospects to get the extra year of team control. To stay under the half year, a team would lose a potential young star player for three months instead of three weeks. Owners are less likely to take advantage of this scenario.
- 3rd year of CBA: Drop team control years from six years to five – three of pre-arbitration and two of arbitration. Arbitration rules for both years will be set as in year three now.
- Players. This change will enable players to reach free agency one to two years earlier. This would be a huge win for players.
- Owners. This would impact a core unfairness the owners are currently taking advantage of.
Implement an international draft with salary slotting rules similar to those of the June draft. Teams will be required to negotiate posting rules with international teams to enable the signing of their drafted players.
- Owners and fairer competition. This is the system the owners have requested to make the impact of international free agents fairer.
- Marketing baseball. Done right, the international draft may become a key marketing tool for the league to gather international attention. International area baseball academies will be needed to supplant the current system.
- International Players. The system for them to join the MLB will be more transparent and less corrupt.
- Trainers and agents. The business of the current system is corrupt.
- Teams. They may have to spend more on international scouting and academies.
Raise the minimum salary to 0.3% of the CBT (from about $545,000 now to about $660,000 with this CBA).
- Younger players will continue to grow their salary in line with their increased impact to the game.
- Minimally older players. This solution takes incremental salary from the CBT from them.
Revamp the standard contract framework to implement standard contracts being guaranteed for a maximum of three years forward. A team can still sign a player for 10 years, but only the first three are guaranteed. After year one on a certain date, year four then become guaranteed. A team willing to terminate a contract must pay the current year plus the next two years. Players could still ask for an opt-out option in negotiations.
- Owners. This would be the key win for ownership in this CBA. The risk of long-term deals would be greatly reduced. This would enable longer-term deals again with less team risk. However, a team choosing to opt out would still have relatively expensive option to protect players.
- Players. The players will hate this option until they ask themselves how many contracts longer than three years are currently being negotiated. The current environment essentially eliminates long-term guaranteed contracts except for a select few each year.
Increase the active roster size to 26. This will reflect the additional size of bullpens in the game, which have greatly limited batting options. Both sides may agree that the roster be capped at 13 active pitchers. Currently, for an AL team to have a bench of three players in a game limits the jobs for a player like Evan Gattis or any single position player. Allowing a team to have an extra bat will help team flexibility. Teams may choose to give this to a younger player to allow him more of an opportunity to prove himself.
- Players. They will secure an additional big league job. A definite win.
- Teams. Likely to be perceived as a loss, but the additional roster spot will give a team additional flexibility.
- Traditionalists. The idea of changing this rule will be hard on them.
Implement the DH in the National League. Traditionalists just went crazy. Name the major sport that operates games with two different sets of rules depending on who the home team is. It is time to agree on bringing the DH to the NL.
- Older Players. The DH is the oldest position by age in the AL. Having 15 more DH jobs in baseball with the 26-man roster will allow great batting players that probably should not be playing the field to have more opportunities. This is a win for the older players.
- NL Traditionalists. They will riot. Ignore them and make it happen.
Increase the option years a player can spend in the minors from three to four (non-critical).
- Teams. Will give management an additional year of flexibility to develop a player without exposing them to waivers.
- Players will likely perceive this as a negative, but it may still be an advantage to have an additional year to make the parent team before being up on waivers. This system might also encourage a team to promote a player a year earlier than before.
Extend the eligibility requirements of the Rule 5 Draft one more year from 4/5 to 5/6 years (non-critical).
- Teams. Management will have an additional year of flexibility to develop a player without exposing them to the Rule 5 draft.
- Players will likely perceive this as a negative, but an additional year in their current system may help development.
Revamp minor league minimum compensation dramatically.
- AAA: 16% of MLB minimum ($105,600)
- AA: 12% of MLB minimum ($79,200)
- A+: 9% of MLB minimum ($59,400)
- A: 7% of MLB minimum ($46,200)
- A-: 6% of MLB minimum ($39,200)
- Below A-: 5% of MLB minimum ($33,000)
- Calculates to about $12-15MM for the entire minor league
- Minor league players. Many of these players supplement their incomes with part-time jobs and basically live at the poverty line, even with significant draft signing bonuses. Correcting this issue may help the popularity of baseball in minor league towns.
- Smart Teams. Players who have a living wage will be able to better develop, and smart teams will benefit.
- Poorly-run organizations will perceive this as a significant cost increase for players they consider unproven.
These are the twelve CBA hard medicine fixes that few will like, but together they will fix the issues that surround the current CBA.
Overall, these CBA changes favor the players but invest players into the growth of the overall revenue of the sport. If both sides consider and trade off the wins for each side as I have tried to do here, they may see this next CBA to be as historically transformational as the 1997 CBA. Let us hope we do not experience the pain to the game that we did in the 1990s to get to that agreement.