Saturday, November 19, 2011

A minor coup

The player's association and the owners unofficially agreed to a new collective bargaining agreement today.  Besides the fact that we can revel in the fact that baseball got it done well before the NBA managed to get their shit together, there is an interesting tidbit in the change of the compensation process for free agents.

First of all, there are now caps on draft spending and international spending on free agents using a luxury tax for teams that overspend.  In some ways, this seems like a penalty to the teams that do poorly; I doubt that agents of #1 prospects like Strasburg or Harper will be lowering their demands, so on top of a substantial payday, these teams could be paying into the commissioner's luxury tax pool.

More interestingly, the Elias rankings will be no longer used, starting in the 2012 offseason.  Instead, teams will get compensation picks for players who depart in free agency if the team makes a qualifying offer of $12 million.  This will greatly increase the value of good, but not great, free agents who would otherwise cost a draft pick to sign.

For this season, type A free agent relievers will no longer cost a draft pick to sign.  However, the rule will not be applied retroactively.  That means the Phillies will forfeit their first round draft pick to the Red Sox as compensation for Jon Papelbon, but if the Red Sox sign any other free agent closers like Ryan Madson or Heath Bell.  By not having to give up a draft pick, I think the Red Sox are much more likely to sign a top reliever to help compensate for the loss of Paps.  According to a Hardball Times study, draft picks in the 15-30 range typically produce an extra $6.5 million worth of value.  That extra $6 million of value is nice to have (although it is hardly something you can count on - sometimes you get Mike Trout, sometimes you get Andrew Brackman), and the Red Sox have the Phillies' impatience to thank for that little windfall.

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