Wednesday, August 14, 2013
Fixes for the draft and free agency
By Scott Boras
Scott Boras has some big ideas on how free agency should be changed.
Buster Olney is on vacation this week, so guest columnists are writing the lead of his column in his absence. So far, D-backs reliever Brad Ziegler wrote about MLBPA head Michael Weiner; Oakland reliever Sean Doolittle discussed what it's like to play for the A's; and ESPN NFL draft guru Mel Kiper Jr. discussed his love of baseball. Today, Scott Boras takes over.
In my 30-plus years representing players as a baseball attorney and observing the business of baseball, I’ve seen the game's revenues grow to record levels. Baseball is thriving and more popular than ever. But that’s not to say the business model is perfect.
In recent years, baseball has tinkered with free agency and the draft, and the result has had numerous unintended consequences. This has created headaches for players and front-office executives alike. Two major unintended consequences that need to be remedied involve the qualifying offer system and the fixed draft pool.
The qualifying offer system damages the integrity of free agency
The qualifying offer system for free agents is being skewed by the fixed pools of money in the new draft system. Each pick in the top 10 rounds is assigned a dollar value, and teams may not exceed the sum of their picks' values without being penalized. Because teams that sign top free agents lose both a draft pick and the "draft dollars" that come along with it, each "draft dollar" is worth far more than its face value, thanks to their artificial scarcity.
Suddenly, free agents who perform well enough to receive a qualifying offer find themselves in a diminished market with fewer bidders. Why? Scouting directors and GMs don’t want to see their draft budgets gutted. The acquisition of young, affordable, controllable talent is too important.
The proof is clear based on how the market worked last year.
Kyle Lohse (one of my clients) turned in a 16-3 record and 2.86 ERA in 211 innings last season at age 33 and was less valued in the market than Ryan Dempster after his 12-8 record and 3.38 ERA at age 35. Dempster was traded midseason and had no draft compensation attached to him. Adam LaRoche (33 homers, 100 RBIs, .853 OPS at age 32) signed for two years and $24 million in the same market where Shane Victorino (.704 OPS at age 31) signed for three years and $39 million. Why? Because Victorino did not carry draft compensation. That undermines the merit-based nature of free agency.
So what is the resolution? I suggest that free agents age 31 or older who have received qualifying offers should not cost the signing club a draft pick or any draft dollars. Give the former team a new pick instead. Don't punish veteran players who have done nothing wrong except have an excellent walk year. The way it works now, LaRoche would have been better off performing like Victorino, and Lohse like Dempster, and lesser performance is not the sort of incentive anyone in baseball wants to create.
Let the draft reward savvy front offices
Along those same lines, baseball would be better served if each team's scouting staff was allowed to pursue the player of its dreams each year in the draft. Right now, the pool system is totally inflexible. Like any other inflexible system, it's creating illogical outcomes.
That Mark Appel wasn't signed in 2012 shows flaws in the draft.
Last year, to take a notable example, the Pittsburgh Pirates selected Stanford's Mark Appel with the No. 8 overall pick, which had an assigned value of $2.9 million. They failed to come to terms with the right-hander, who was valued as a $6.2 million player in this year's draft. I certainly think this year's Pirates would have been happy to have Appel (also one of my clients) in their system, either to help the club directly or as a valuable trade piece.
What's more, draft talent comes in waves. It's not linear. There's no factory churning out exactly 30 first-round talents every year. With an inflexible system, in some years there will be more players worth sizable signing bonuses than there are clubs able to pay them. That's when we will get Appel-type situations. Other years, there won't be enough players.
So what's the resolution? I think each team's first pick in a season should not be subject to any signing limits. Look at it from the team perspective: One player is not going to break any team's budget, big market or small, and the flexibility to pursue one elite player of its choice will reward scouting and player development personnel who properly identify and value talent as it fluctuates from year to year. The remaining rounds could still be subject to the pool system, striking a balance between cost certainty and healthy competition.
Stop artificially punishing American players
Another unintended consequence of the current system is the windfall it gives any player not subject to its restrictions. For example, U.S. players and international players age 23 and lower are now subject to a salary cap, while other international players are not. There are also relatively few premium free agents on the market because clubs and players are frequently signing contract extensions years before free agency. That leaves teams with a lot of "hot money" from their revenue increases looking for someplace to go. We can see the result in the spike in contracts given to Cuban players.
In 2004, the Angels signed Cuban defector Kendrys Morales for a $4.5 million guarantee. Since then, the price for Cuban free agents has jumped dramatically, starting with Aroldis Chapman at $30.25 million and followed by Yoenis Cespedes ($36 million) and Yasiel Puig ($42 million). Teams have money to spend and understand the value of top amateur talent.
My question, though, is this: Why are great, young American talents such as Stephen Strasburg and Bryce Harper forced to face restrictions on their earnings when Cuban players do not? It's illogical and unfair. Kris Bryant, the top power hitter in this year’s draft, signed for $6.7 million. A top Cuban will now get six to seven times that amount.
Let's take action
If we enacted the two changes discussed above -- adjusting the effects of a qualifying offer for veteran free agents and giving teams one cap-free pick in the draft -- we would go a long way toward restoring the proper balance. But any market intervention is going to have unintended consequences, so we should remain vigilant and take corrective action as soon as any problems are identified.
The collective bargaining agreement does not expire until after the 2016 season. Counting the remainder of 2013, that's four seasons, an eternity in the relatively short timeline of a player's career. The same goes for front offices that are trying to win before owners and fans run out of patience. As stewards of the game, we owe it to everyone involved to repair systemic problems that were not intentionally introduced. The flaws in the system hurt everyone. We've got a lot of smart people in the game. Let's put our heads together and resolve them now.
Notes and links from Buster
• If Josh Johnson had a strong 2013 season, he would have set himself up for a good run at free agency. But it’s hard to imagine a worse season for him under the circumstances, because when he pitched, he was generally ineffective, and now he’s hurt again. The calendar is his enemy, because at most he has time for only a handful of starts, if he comes back at all before Sept. 29.
• The Cardinals won a crazy first game in the crucial three-game series being played out between St. Louis and Pittsburgh.
From ESPN Stats & Information, by the numbers, on the Cards’ comeback:
40 -- The Cardinals were 0-40 when trailing entering the ninth inning before Tuesday.
19 -- This was the Cardinals' 19th comeback win this season; only the Astros and Cubs have fewer. The Cardinals have only two walk-off wins, tied with Detroit for fewest in the league.
• The Pirates made two costly errors Tuesday, one in the bottom of the ninth and one in the bottom of the 10th. That's a rare occurrence for a team that has been among the best defensive units in the league this season.
Check out where they are in Defensive Runs Saved over the past four seasons:
• After his night of two homers and six RBIs Tuesday in the Yankees’ 14-7 rout of the Angels, Alfonso Soriano has 2,003 hits, 394 homers, 1,106 runs, 1,100 RBIs and 459 doubles. That’s a heck of a career.
From the Elias Sports Bureau: The Yankees broke a streak of 58 consecutive home games scoring fewer than 10 runs. That was the second-longest streak in a single season in Yankees history. In 1984, they went 61 straight home games without scoring in double digits.
The Yankees got a combined 10 RBIs from the first and second batters in the lineup (Eduardo Nunez and Soriano). That's the most combined RBIs by two Yankees teammates batting first and second in the batting order since RBIs became an official stat in 1920.
• From Elias: There were six extra-inning games Tuesday, tied for the third most in a single day in major league history. There were seven extra-inning games in a day twice (July 4, 1918, and Aug. 15, 1998). There have been seven other days with six extra-inning games, most recently June 6, 2010.