Reserve System/ Player Salaries (non-Phillies discussion)

[baseballoldie]

Baseball revenues at all time highs but players share continues to decline. Doesn't look like that trend will be changing this offseason. Why aren't the clubs paying the players? Long time successful players can't get contracts? Is the money shifting from the players to the front office staffs or going into the owner's pockets? Club values are up dramatically and owners are becoming billionaires just from owning their franchise. Either way, players share of revenue keeps getting smaller and smaller. If that doesn't reek of collusion, I'm not sure what does.

It doesn't matter if analytics support not paying players higher $ into their 30s, the share of revenue that should go to the players every year should at least be the same. So if the money isn't going to older players, then it should be going to the younger players. MLB clubs are taking advantage of paying younger players minimum salaries and pocketing the excess.

[zambonir]

It's a market inefficiency that needs to be addressed in the CBA. The players association has spent years making sure their stars and older players were rewarded for past performance while also wanting less restrictive free agency (for instance the reforms to the QO system this last time). Gonna be a big task to flip the whole thing around so that younger players get rewarded, or achieve free agency sooner.

The overall revenue split is still largely unchanged though. Teams, overall, are not carrying less payroll, a few tankers aside. According to this the overall numbers are still basically 50-50, or even higher for the players once all the minor league salaries and benefits are included.

Baseball’s Economics Aren’t As Skewed As They Seem

The arbitration and mid-range FAs making $6-12 million add up; it's just the top of the market that has declined (and there's an inordinate amount of attention paid to that). Contract lengths are also getting shorter but that has no effect on spending year-to-year.

[Austinfan]

Contract lengths should be shorter, you want the money going to the players who put people in the seats, so if a player stops producing, you want that money going elsewhere.

[zambonir]

Not saying they shouldn't be but if the system is going to finally adjust to pay people fairly when they stop producing it should also adjust to pay people fairly when they are. Ryan Howard's contract was dumb but it was money he'd already earned for the Phillies many times over, without being compensated as such when he was actually doing it. Aaron Nola made $573,000 last year. I'd have rather paid him $15 million for that than $40 million when he's 32, but for now, that's the system.

[Philsmania]

Baseball revenues at all time highs but players share continues to decline. Doesn't look like that trend will be changing this offseason. Why aren't the clubs paying the players? Long time successful players can't get contracts? Is the money shifting from the players to the front office staffs or going into the owner's pockets? Club values are up dramatically and owners are becoming billionaires just from owning their franchise. Either way, players share of revenue keeps getting smaller and smaller. If that doesn't reek of collusion, I'm not sure what does.

It doesn't matter if analytics support not paying players higher $ into their 30s, the share of revenue that should go to the players every year should at least be the same. So if the money isn't going to older players, then it should be going to the younger players. MLB clubs are taking advantage of paying younger players minimum salaries and pocketing the excess.

That's why the MLBPA needs to fight to the death for free agency after three years.

[bigegypt0417]

Contract lengths should be shorter, you want the money going to the players who put people in the seats, so if a player stops producing, you want that money going elsewhere.

You continue to harp for a world that doesn't exist in reality. Teams will pay for years at the end of a contract that aren't worth it...it isn't like that has only been true for a year or two...it's been like this for a very long time.

You are still posting as if you are a follower of the Bill Giles school of payroll/contract negotiation.

[Austinfan]

Contract lengths have been shrinking the last couple years due to analytics.
Teams have analyzed the long term deals and realize money for most players past age 35 might as well be heaped into a pile and burned.

Free agency after 3 years would destroy baseball, why put money into player development if you lose the player just as they start to produce - or you'd have to bury players in AAA until they're absolutely ready.

One solution may be something similar to restricted free agency in the NHL, but arbitration has a similar impact, smaller money than true free agency but still substantial payouts.

[bigegypt0417]

Contract lengths have been shrinking the last couple years due to analytics.
Teams have analyzed the long term deals and realize money for most players past age 35 might as well be heaped into a pile and burned.

Again...when you're talking about 26 year olds your argument becomes moot. You are attempting to use an argument that doesn't fit the current situation.

[allentown]

We don't have 10-year deals and contracts with deferred $ because that is what players want. At least not for the most part. We have those deals, because that is what the owners want. The owners want to spread the $ over time, so that the $ are worth less in fixed value and so that they push some of the contract expense beyond the period in which they expect to be in contention and needing to run a big payroll. It also gives bigger upfront profit for the owners.

The players want fair value for the good years they have left. If they have only 6 good years left, they'd do better getting all those $ in those 6 years.

I agree with AF that FA after 3 years would fundamentally alter baseball, and not for the good. Why would any team pay big money to sign amateur talent and then spend to train them for 3-6 years until they are good enough to contribute at the MLB level, if they lose them after 3 years? Why would any team bring up a kid before his performance in the minors indicated he was fully developed and ready to hit the ground running as an average MLB starter? Teams play games now to leverage 6 years of team control to 7 years. If the limit for FA were 3 years, the games would be never ending. Crawford and Kingery certainly wouldn't have sniffed MLB in 2018 and Seranthony probably wouldn't have either.

Even football, where high draft picks play almost immediately has 4 years of team control for top draftees. Basketball gives the drafting team a big edge in re-signing a star youngster.

What baseball needs is to 1)raise the MLB minimum, 2)set higher MiLB minimums, 3)have arbitration after 1 year, and 4)change the arb rules so that arb targets are a higher percentage of true value. All of that would increase the payout to high-performing young players. Perhaps there should also be a maximum age for first FA, as in you become a FA after your age 28 season, regardless of how many years of MLB service you have.

[julio]

Note: Split from the 2019 Phils Off-Season Discussion thread. This is an interesting topic, worth pursuing, and deserves its own thread - and it's really not a Phillies off-season matter. Enjoy!

[zambonir]

Baseball is unique because of its slow development pattern, but also really extreme.

MLB: six years of major league service, which means a player can be the property of a single team for as long as 11 years.

NFL: Four years.

NHL: 27 years old, or seven years.

NBA: Basically four years but with many restrictions.

What baseball players actually deserve, IMO, is higher signing bonuses and higher minor league salaries, particularly in AA and AAA (because once a player has made it that far you can at least be confident he's a worthy investment). And then significantly higher salaries early in their major league careers.

Not sure either side would be sold on a performance-based system though so I'm not sure exactly how do it. Tying it to draft position obviously doesn't work either, by the time they get to AAA a 5th-rounder or 20th-rounder might be worth more than a second-rounder.

Obviously when Joel Embiid or Carson Wentz or Nolan Patrick turnes pro they are almost immediately impact players, or close to it, whereas in MLB you just don't know what you are going to get for your money in a player's first few seasons (Scott Kingery vs. Ronald Acuna, for instance, and then there's a whole other variable with pitchers).

And restricted free agency really only works in a salary cap league. Like, if Ryan Howard was an RFA early in his career the Phillies would have either signed him or matched someone's offer. That wouldn't be tenable for the bottom half of the league. Arguably, the league is already untenable for them, but now they get 8-11 years before they can no longer afford their stars. Can you fix that with more revenue-sharing (which the owners don't want) or more of a hard cap (which they players don't want)?

[julio]

MLB: six years of major league service, which means a player can be the property of a single team for as long as 11 years.

Longer than that (worst case).

Uniform minor league contract binds player for seven seasons, after which, if he's not on a 40-man roster, he's eligible for minor-league free agency.

After he goes on a 40-man roster, he can be optioned for three full seasons. We're up to ten years now, and the player may not have accrued any major-league service time.

Add six seasons of ML service time. That's a total of 16 years from the time a player signs his initial minor-league contract until he's guaranteed free agency.

If he signed at 16 (international amateur), he's 32 now. If he signed at 21 (US college junior), he's 37, and you can put a fork in him.

That's the worst case. Usually, players reach FA somewhat earlier than that - but most of 'em are in fact 30 or older, because major leaguers mostly don't stick on 25-man rosters when they're 21-23 years old. A few do, but most who reach the majors that early tend to get on what we call the Mike Williams Expressway, and don't accrue full seasons of ML service time.

[bkeich]

Uniform minor league contract binds player for seven seasons, after which, if he's not on a 40-man roster, he's eligible for minor-league free agency.

The players are eligible for RuleV before than (5 or 6 years?) so it is a little shorter, they have to get on the 40 man or can be "drafted" to another teams 25 man, so most guys are limited until how long the clock starts until they must be protected (and optioned).

That said, yes most players hit Free Agency around 29-33. Machado is hitting very early (26) because he made the majors at 19 (played full time at 20). Bryce Harper is also 26 having done basically the same timeline.

[zambonir]

Thanks julio. I would say we don't see too many of the worst cases in the sense that most Rule V-eligible guys, or guys who get on the 40 but don't stick on the major league roster, probably weren't going to sniff a seven-figure salary, let alone a big one, anyway (and if they defy those odds, it tends to work out for them, a la Herrera). But all the more reason to address the low minor league salaries.

No matter how you slice it is an outrageously long period of time to be tied to a single employer for relatively low compensation, whether you're comparing it to other sports or any business. And the likelihood that some team will throw money at you at 29 or 31 or 35 has always been the carrot (just as simply getting to the majors is the carrot for all the low and unpaid labor in the minors). If baseball careers start to become as short as NFL careers salary structure will have to shift accordingly.

Even with this current seeming market correction, for now, the players are getting a mostly fair share of the revenues. That's it's not distributed fairly is not something the powers-that-be in the MLBPA have been too concerned about, nor do they care about the non-members in the the minor leagues.

[baseballoldie]

I totally agree that a team shouldn't lose the rights to players they have developed with free agency available after 3 years but players also shouldn't be paid only a minimum salary for 3 years if their performance warrants higher pay. It wouldn't be too difficult to slot a player based on his performance against league averages into pay ranges - for example, minimum ($550K), medium ($1.0M-$1.5M), high ($1.5M-$2.0M) - for the first 2-3 years with all 1st year players starting at the minimum. If a player performs at a high level his 1st two years, kick him into arbitration in year 3. Give the teams 2-3 years of additional control via arbitration for a total of 5 years with free agency to follow. Get rid of the service time manipulation currently in the system.

[julio]

I don't necessarily agree that a shorter reserve period would represent a financial issue for clubs. They wouldn't be purchasing as much future service when they signed a young amateur (drafted or international) - so they would respond by paying less up front, in the form of smaller bonuses. The international market is basically an auction - teams aren't going to bid more than they think the player is worth to them. Drafted players are in a more opaque market, because the draft eliminates open bidding for individual players. Over time, though, teams' willingness to pay bonuses tend to define more-or-less what a market-clearing price is for a player drafted at any point in the draft. In either case, if a club is buying development plus 3 years, instead of development plus 6 years, one would expect the market-clearing prices to adjust downward.

Now, this will not happen if the current bonuses paid do not reflect a market-clearing price - because the market has been sabotaged by MLB through draft slotting and capped international bonus pools. If this is the case, bonuses might well not decline - but would still reflect what clubs thought the value of each signed player was.

Moreover... if clubs WERE to determine that they just could not afford to maintain the same number of developmental clubs, or keep as many minor leaguers on contract, they could revisit the National Agreement (the agreement between MLB and the minor leagues), and work out an arrangement where they only partially staffed minor-league rosters, and the minor league clubs (at least at the higher levels) would contract with the balance of the roster. The high minors should produce enough revenue through gate and local media to be able to handle a dozen minor-league salaries (consider that they get all the gate, plus parking and concessions, and almost universally play in municipal facilities where their capital costs are largely off-loaded on host towns).

Things would change - but change is not necessarily bad, and not necessarily equal to death.

Won't happen... but I don't see it as an end-of-the-world scenario if it did.

[BostonRoss]

I think there would be a problem basing salaries on performance, because it would be difficult to agree on what constitutes performance. Would it be based on WAR (which one?). Something else? Would players change their approaches to playing to achieve better individual "performance" metrics?

[zambonir]

And yet, the free market is pretty much based on performance, as are arbitration awards. But yes. Hard to quantify as an automatic thing. And imagine the pressure on official scorers and statistical providers if it was tied to things like defensive WAR.

You could just make players immediately eligible for arbitration. Still a lot of subjectivity but both sides get to emphasize whatever they want, an overwhelming majority of players wouldn't get any extra $, and most cases would be settled. The two cases the Phillies settled today are good examples. Had Hector Neris not stumbled last year he could have asked for more money under the current system, and in a system where service time was not valued more than performance he'd probably deserve a lot more. And Seranthony would probably be in line for a raise too.

Conversely, Eickhoff took a very low salary because he was unable to perform.

I think you could make some of it based on appearances, rather than service time and performance. That's how it was for Eickhoff. And take Kingery, for instance (were he not under contract). Simply by getting the number of ABs he did, even though he did not perform well, he had become a major league starter and could be paid better as a major league starter. Depending how the thresholds were, perhaps losing starts to Cabrera would have cost him money. Performance wouldn't have come into it. If you can't perform, you don't get the appearances (of course this would also make benchings and demotions more controversial but they usually are anyway).

[baseballoldie]

https://www.cbssports.com/mlb/news/phillies-jake-arrieta-warns-young-players-about-the-future-of-free-agency/amp/

It won't be surprising to see more players become vocal about the declining share of revenues making their way to the players

[zambonir]

Eno Sarris (enosarris)

2018-19 Phillies Off-Season Discussion (2019 version)

That Ringer article suggested the players' cut of revenue hasn't changed that much. I don't know if there are things - such as the MLBAM windfall - that don't factor into that or not. There's no reason why the split would already be declining now when players who signed contracts 2, five and even seven years ago are still getting paid on those contracts - but it will decline big-time if the system doesn't start compensating younger and arbitration players to make up for no longer paying the over-30 players.

2018-19 Phillies Off-Season Discussion (2019 version)

one reason is simply because there is no reliable pipeline other than minor league development, even colleges rarely produce ML ready players (unlike say the NFL). So teams won't invest in development if they can't underpay young players for some extent of time.

But development isn't a favor the teams are doing a player (just like college sports isn't either). It's a system they benefit from, and they don't actually spend that much money on compared to major league salaries. The players aren't paid well, the teams are run by independent owners, only the signing bonuses for a small # of players represent any real stake. If all MLB players became arbitration-eligible in Year Two or became automatic free agents at the age of 27, what sort of hardship would that actually create for MLB's development system or profit margin? And if they did get rid of a few leagues or if more players decided to go to college instead of signing out of high school who would that really hurt? You'd get burned some but NHL, NBA and NFL teams already get burned too.