This week in “Last Week in BizBall“, changes expected to both the amateur draft and international free agent market, plus tidbits.
NEW RULES FOR THE AMATEUR DRAFT
LWIB it was widely reported that the next CBA will include changes to the Rule 4 draft (aka amateur draft). That is no surprise. Commissioner Selig has, with mixed results, been attempting to control spending in the draft for years via his office’s “slot recommendations”. Evidently, MLB has failed to successfully bargain their desire for a draft governed by “mandatory slotting”. Instead, a cap on the total amount of money each club can spend in one draft is expected to be introduced. Clubs exceeding the cap will pay a tax (similar to the “Competitive Balance Tax”) and possibly forfeit future draft picks. Reporters including Buster Olney and Jeff Passan have written that some small/mid revenue clubs are not happy with the forthcoming changes to the draft. I understand why. As I’ve written here often, clubs including the Royals, Nationals and Pirates have been big spenders in the draft in recent years. These clubs have rightfully concluded that investing big in amateur talent, rather than major league free agents (ie. Gil Meche), provides them the best opportunity to compete with large revenue franchises. Regrettably, going forward, this option will not be available.
David Schoenfield titled his post about the reported changes, Draft proposal would sell out amateurs. “Rookie compensation” has become a contentious issue between player unions and owners in recent years. Many believe the NFLPA “sold out” their future members in their most recent CBA negotiations (if that isn’t a misnomer). In a seemingly odd alliance, some veteran players in the NFL and MLB have openly sided with their employers over the escalating compensation being awarded “unproven” drafted amateurs. Owners have promoted a message that the increasing dollars they are investing in amateur players is coming out of the pockets of veteran players. The naysayers argue that greater compensation for players entering the league results in greater compensation for all players over the course of their careers. If media reports on the details of the next CBA are accurate, and, for the most part, they likely are, the MLBPA has successfully negotiated changes which will increase compensation for their current members. These changes reportedly include, an increase in the minimum salary, changes to salary arbitration eligibility (more “Super Two’s) and fewer free agents subject to compensatory picks.
Schoenfield correctly points out, that in 09, solely because he was a free agent and was able to auction his talents to all 30 potential employers, Aroldis Chapman received double the amount of money of Stephen Strasburg, able to bargain with only 1 team (monopsony). Schoenfield wonders if these upcoming changes to the draft, further limiting drafted players’ bargaining leverage, will result in an eventual legal challenge, adding, “The draft rules have never been challenged in court…” Ok, no baseball player has challenged the legality of the reverse order draft but a couple of football players have. And, in both instances, guess who sided with the NFL owners in wanting to preserve the draft? The NFLPA. The argument that owners want an amateur draft and player unions don’t is a bit specious and oversimplified. Read my piece from a few years back here.
SELECT READ MORE TO READ ABOUT INTL. FREE AGENT MARKET, PLUS TIDBITS
INTL. FREE AGENT MARKET
Just as one of Commissioner Selig’s principal goals in this CBA negotiation was controlling club expenditures in the amateur draft, so too is controlling escalating expenditures in the international free agent market (de facto, in the Dominican Republic). Maury Brown wrote, “According to The AP, a Luxury Tax for international free agents will also be implemented but that “there will be a separate threshold and tax with penalties, and there will be a study committee that could put a new system in place later during the agreement.” I suspect the “new system” is the long-discussed expansion of the Rule 4 draft, or some variation of it. This change would be the most recent of MLB’s efforts to reform the culture of player development in the Dominican Republic. As the signing bonuses awarded players in the DR have skyrocketed, MLB has become much more active in the scouting of players there. Both MLB’s Department of Investigations and Scouting Bureau have “boots on the ground” in the DR, hoping to limit the age and identity fraud amongst prospects that has long been commonplace. Recently, the P formerly known as Leo Nunez is now J.C. Viciedo. The free agency of superstar Albert Pujols has led to speculation in the media as to what his real age is. And while MLB is either working with the Dominican buscones (a combination of trainer/agent/scout/guardian) in the DR or attempting to replace them (depends upon whose version you believe) in an effort to clean up what has been a corrupt system, their own employees have not been exempt. Jim Bowden resigned as GM of the Nationals in 09 amidst an FBI investigation into signing bonus kickbacks involving Latin American players. LWIB, a former scout became the 3rd former White Sox employee to plead guilty to charges involving a bonus kickback scheme that took place over several years and involved prospects in a handful of Latin American countries. David Wilder, formerly the White Sox senior director of player personnel, previously pled guilty. Earlier this month, Ben Badler of Baseball America reported that, “Dominican authorities have charged a former contract investigator used by Major League Baseball with accepting a $25,000 bribe in exchange for conspiring with a trainer and a scout to fraudulently pass the player through his background investigation.” That player is known in MLB as Yoan Alcantara, BA’s #1 prospect in the Arizona League this past season. Badler notes that MLB no longer contracts out the background checks, they are now conducted by their aforementioned Dept. of Investigations. Badler adds, “ Alcantara is the third known major player involved in age fraud signed by the Padres after passing a background investigation in recent years. In August 2008, the Padres gave $325,000 to a Dominican third baseman presenting himself as 16-year-old Jefri Pena. In June 2009, BA reported that MLB suspended Pena for a year after discovering he had lied about his identity and reduced his age by four years. Last week, BA reported that the Dominican shortstop the Padres signed for $1 million in 2008 as Alvaro Aristy is really Jorge Leandro Guzman and had falsified his age by nearly two and a half years.
MLB’s need to reform player development in the DR is easily understood. Teams will get better results from their scouting efforts and investments if they can reliably determine the ages of players. However, many pundits, me included, question if the introduction of a player draft, combined with the dismantling of the “buscone” culture will result in the DR producing fewer players in the future. The current system is corrupt and, most argue, exploitative (a dissenter here) but it also may be best suited to produce the maximum number of players.
- The 15th and final season of Triple-A baseball in Ottawa was 07. LWIB, the long-rumoured return of the affiliated minors to my hometown was all but confirmed. A Double-A Eastern League franchise, rumours are Binghamton, is expected to be sold and relocated to Ottawa for the 13 season. The franchise is expected to affiliate with the Blue Jays, who may also be an investor in the franchise. I am VERY happy about this. Don Campbell has more.
- Cynthia Turner of Cynopsis Media brought to my attention that tri-state cable provider Cablevision is now offering their subscribers the Latin American Sports Network (LAS). The channel broadcasts a lot of baseball during the winter months, including, “… the Puerto Rico Professional Baseball League, Puerto Rican COLICEBA "AAA" Baseball, Cuban Baseball League and broadcasts the games of the Pacific Mexican League and League of Mexican Baseball.” MarketWatch.com has the press release here.
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Pete Toms is senior writer for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.
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