While negotiations for Major League Baseball’s new collective bargaining agreement are unlikely to cause any work stoppages, discussions between the owners and players’ association haven’t exactly gone as swimmingly as expected.

We’ve heard rumblings for weeks that the two main issues begging for some give and take are the players wanting to change the compensation process for free agent signings and the owners hoping to lower the cost of signing draft picks through a hard slot or some sort of luxury tax system.

In his morning column, Buster Olney tells us that the recent practice of teams placing a higher value on draft picks has thrown the entire compensation system into disarray. Teams are no longer as willing to give up their first round draft picks to sign a Type A free agent, especially a borderline one, which drives the price of such a player down. In fact, organizations have become more interested in acquiring draft picks which has caused players to be offered arbitration (a must in order to be eligible for compensation) despite teams having no interest in actually retaining their services.

Olney suggests two possible solutions:

1) A team that loses a Type A free agent would acquire a supplemental draft pick and not the signing team’s first round pick.

2) Major League Baseball would adopt something similar to how the NFL handles arbitration offers. If a team offers arbitration to a player, the organization would be obligated to pay the player a salary that compares to the best players at whatever position he plays. This is done in anticipation of teams being less interested in offering arbitration to players if they have to pay them a larger amount of money.

It seems unfair to implement any rule changes ahead of the 2012 season at this point, but there’s even some disagreement over the timing for either of these proposals to be put into effect.

Whether option one or two gets agreed to likely depends on whether or not the owners get their wish to see a hard slot implemented for signing bonuses. The compromise option in this case would see MLB and MLBPA agree to a tax handed out to teams who go over a certain threshold for all amateur signings. To implement this, they might as well just eliminate the draft altogether.

Despite these hangups, Olney promises us that “there continues to be optimism, in general, that a new labor agreement will be finished sometime in the next two weeks.”

Comments (5)

  1. what exactly is Bud’s problem with the current system? Aren’t a lot of high profile high school athletes lured away from football scholarships with the big bonuses? Why would a commissioner want to hamper the number, and quality of prospects coming into the league?

    • It’s insane that ownership needs rules in place like this. I’m a big fan of the free market in this situation, especially considering that up to this point, no team has spent to maximum capacity at the draft, or in amateur signings.

  2. Owners had enough sense to earn the money they have to begin with they should have enough to decide how much they can spend of signing draft picks.

  3. Old Bud isn’t a photogenic person

  4. The thought of taxing amateur signings would be a huge blow to teams like the Blue Jays. And as allstev pointed out, it could help high ceiling athletes choose a sport other than baseball as a career choice. I hate the idea.

    I’d much prefer to see a stronger tax system on big league or 40 man roster salaries. Or even a tax on individual salaries that exceed a certain high water mark by a set percentage. For example, pick the league average salary and tax any individual salary that exceeds it by 25%. It could level the playing field pretty quickly.

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