If a team finishes with the best record in baseball and then signs a superstar like CC Sabathia, they only have to give up the 30th pick. However, if the 20th best team signs a Civic like Adam LaRoche then that team loses the 11th pick. That's totally backwards. It also means that if a Tampa Bay or Minnesota loses a megastar, they don't get any more compensation than if a solid player leaves.
Now that teams are given a flexible bonus pool to sign draftees, there is a very simple solution that works for all players and all teams. Just have the compensation shift between the two teams bonus pools and be proportional to the contract the player receives. So if a team signs someone to a giant 7-year deal, they lose $3 million from their bonus pool and the player's former team gets $3 million added to theirs. If a team signs a player for the league minimum, then no compensation is exchanged.
Under such a system, teams can get compensated for all their free agents and to the degree that is merited. For the players, they won't be forced to decide whether to take some arbitrarily defined "qualifying offer" or risk free agency and there would be no more donut holes where the value of some player's value is killed because the compensation required is out of whack. It would also be a far more effective way of ensuring competitive balance than the current system.
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Q. Um... wait. Who is on the "corrupt" side of this argument?
A. Scott Boras, for one. He charges that the current system of draft-pick compensation is deliberately set up to make sure that free agents don't see the bidding wars that they should be seeing. "Corrupt" is the word he uses.
Last week, the Seattle blog-o-sphere suggested that the Mariners extend Kendrys Morales a "qualifying offer" this winter -- and proposed that if the M's did that, Morales would be more-or-less prevented from signing anywhere else.
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Q. Why would Morales be prevented from signing elsewhere?
Q. Let's go into "primer" mode. Like the lobster-head in Galaxy Quest said, "explain as you would to a child." Some of us don't care much about this stuff.
A. Starting last year, EVERY free agent can be offered that same 1-year, ~$14,000,000* contract by the team he's leaving. No type A's, no type B's just paint every free agent with the same broad brush.
If Felix is getting ready to leave, the Mariners can offer him 1 year, $14M. If Henry Blanco is getting ready to leave, it can do the same.
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Q. Why wouldn't the team offer a bottom-end player this deal?
A. He might take it! Blanco, who is 99% of the way toward the bottom of the pool, isn't worth $14M and also isn't worth $4M. In the words of Guido and Nunzio from Another Fine Myth, "Nobody's got a million bucks to spare. Even if you got it, you don't got it to spare, know what I mean?"
Raul Ibanez can't be extended a qualifying offer. Joe Saunders can't. You get up to pretty close the ability of Hisashi Iwakuma and Kyle Seager before that $14M offer enters in. The other guys ain't good enough.
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Q. Why wouldn't the team offer Felix Hernandez this qualifying offer?
A. It would, and does. A Felix type never accepts the QO, because 1 year, $14M would be a huge disappointment on the FA market for him.
The team extends the QO, the player of course declines it, and ... the team is now entitled to a 1st-round "compensation pick" from the team that signs him ... (with a great big asterisk that is hugely minimized by the blog-o-sphere: the worst 10 -- of 30 -- teams don't have to give up the 1st-rounder).
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Q. What's so corrupt about that?
A. No matter how you set up the system, there will be a group of players who are JUST BARELY WORTH the 1-year, $14M contract -- but who are not worth a 1st-round pick in trade. (Yes, we're simplifying. This is Comp Picks for Non-Geeks.)
The blog-o-sphere held up Adam LaRoche as last winter's TYPICAL example of how this plays out. LaRoche's stats in 2012:
| AVG | HR | RBI | SLG | OPS+ | Remarks |
| .271 | 33 | 100 :- ) | .510 | 127 | #6 in MVP!, Gold Glove |
LaRoche wanted big money. Boom! Your career year just as you hit the free agent market. But Washington offered him last winter's 1 year, $13M "qualifying offer" and .... turned out nobody wanted to lose a 1st-round pick on a first baseman they knew wasn't going to be great again. (LaRoche has an OPS+ of 99 this year.)
LaRoche sat there sourly all winter with no offers to speak of, and finally the Nats' GM said "take it or we'll move on." He had to take it. A bitter pill to swallow.
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Q. Was this TYPICAL, or was this the REDUCTIO AD ABSURDUM?
A. It wasn't typical. It shows what CAN happen to a player like this.
But! It's not like the Mariners can BANK on this situation, "hardballing" Kendrys Morales, secure in the knowledge that he's spit-canned before he ever starts the winter. There's a lot more uncertainty than people have assumed.
For example, the worst 10 teams in MLB can sign a FA without losing their first-round pick. Right now the Twins look like they could use a 1B, and Morales looks like exactly their kind of player to Dr. D.
Whether or not the Twins want Morales, the point is, you don't know which teams will be in the bottom 10; you don't know what their plans are; and you don't know if they value players the same way you (or Fangraphs) do. There is PLENTY of uncertainty. This forms a reasonable check-and-balance on the teams' power in a LaRoche or Morales situation.
I'm not saying that some players don't get ripped off. They do.
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Q. Why should a team get comp at all?
A. Dr. D was there when free agency started, gentlemen. :- ) We were all aghast at the idea that a team could put a boatload of effort into developing an Andy Messersmith, and then just lose him for absolutely nothing. Believe me, our reaction at the time was, "What is even the point of a farm system, then?"
Charles O. Finley responded by saying, and he meant it, "Just make 'em all free agents every year, then." That way you wouldn't pay any deadwood!
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Nowadays we're more used to a NCAA-type system, you get an athlete for a few years, and then you go to the next ones. But still.
Even the players' union signed off on this one. Sure, if you develop a great player, and you lose him for nothing on the trade market, we got no problem with the team getting a lollipop in consolation.
It's the BORAS type who resents anything and everything that could impact his guys getting maximum dollar. He sees one (1) point of view. His.
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Q. Would the Type A, Type B strata be fairer?
A. It seems so ... but wherever you draw the line, there will be players just barely worth the contract offer, and not worth the draft pick. There used to be two groups of players hurt by the system. Now there's one.
The cleaver cuts a more blunt mark now, so cases like LaRoche's might be a little more egregious now.
Dr. D would point out that Adam LaRoche, personally, is not worth even the 1 year, $13M this season. The QO system only "prevented" GM's from overpaying him in a moment of weakness. A genuinely good player isn't going to suffer LaRoche syndrome nearly as often.
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Q. Does Dr. D think the system is corrupt, or wholesome, or somewhere in between?
A. In any economic system, you can point to individuals who are caught in the gears... and you can point to individuals standing in the sweet spot. Economic systems have to handle large masses of people and processes, and they have to do it objectively -- providing fairness in OPPORTUNITY, not outcome.
This country was set up with the idea of --- > allowing everybody to play on an even field. Benjamin Franklin wanted your son to be able to work hard, go to college, earn a living and buy a house if he wanted to work hard. Somewhere along the line, that turned into "Why do you deserve an Accord if I don't have one?" And from there into "Why should anybody else get $80M when I only get $13M?" Adam LaRoche had the opportunity to hit like Josh Hamilton. So did I.
You could tweak and improve the current MLB system, I'm sure. Is it broken? No way in the world. MLB ain't hurting, and neither is its worst victim, Adam LaRoche.
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Comments
All signings of free agents should be "postings" whether they come from Japan, Cuba, or another team. "Free agents" should be a slotting system (i.e., Q.O. gets team 1/4 the annual offer if he signs elsewhere -- in "bonus bucks" for signing draftees, IFAs or any other "capped" slot system) . In other words, A partial restoration of reserve system in that the losing club has an interest, but not enough to preclude the player from signing elsewhere. But like the posting system, the club that develops gets reimbursed for some of the costs. By indexing the "bonus bucks" to the amount of time the player has spent with the previous team, it could be calibrated to reward the Twins and Rays who develop players, and penalize the teams that cycle through free agents 2-3 years at a time.
By doing it with "bonus bucks", it satisfies some of the criticism of the draft pick system by allowing a club that picks 11th to potentially have more slot money than one who picks higher if they lost a key player to FA. It also potentially puts Cuba and IFAs into a system where signing a Cuban has a similar impact to signing any other FA. Congress- people from Florida and New York will complain if the Cuban government gets posting fees, but they did develop the kid - why not let them collect as much as we let buscones get? But then, I also think the NCAA/NAIA/state ed dept. should get some scholarship/support money every time a player is signed from the school or system - note that if was $1,000 per signed player, than would be >$1/2mil to colleges and a similar amount to state athletic programs.
To me, free agent compensation simply seems wrong. The draft itself, all 50 rounds of it, is bad enough. But then the drafting team essentially owns that player through six years of major league service time during which the player's compensation is artificially constrained. That seems like an awfully huge advantage for owners over players.