28 December 2009

Fixing Amateur Talent Acquisition

It seems a major issue Bud Selig wants to address before he retires as the commissioner is to equalize the playing field with respect to amateur acquisitions. Apparently, his concept of fixing disparity between franchises is to fix perhaps the one area where small market teams actually can compete. So lets just go for the ride and find a system that can actually work.

Based on current work of Stark, the New York Times, and the Biz of Baseball . . . I think it is safe to assume revenue sharing in general comes to at least 500MM. With that in mind, I think it would be easy to isolate about 300MM of that to amateur talent acquisition. The main step is to abolish the draft and set up annual salary shares.

I'll explain after the jump.

The draft is largely a tool to force talent to sign with certain teams and restrict their earning potential. These two issues would be a stopping point for many Japanese players looking to play state-side. To resolve this, I propose that the draft be abolished and instead teams are allotted fixed salary points based on the reverse order of their records for the previous season.


You can see for this plan each team will be able to sign 100 players each season. This is enough to fill two Rookie league teams, a Dominican Summer league team, and provide a few guys for short season ball. It also provides several high paying positions and there are at least two teams who have contract shares of the same amount. Some may argue that the bonuses in question here are on average much greater than what is doled out in the draft and international free agent market. That is true. A rough estimate on what is currently spent on bonuses is around 240MM. This throws in another 55MM, which will help raise domestic player bonuses, which have been unfairly discounted in the current restrictive market. Another plus for players is that this system gives them choices. Even single shares, even the 10MM one, has at least two teams capable of offering it. This enables choices to be made and a better idea of what is available. It should also result in players quickly signing on as neither side has much room to haggle. The prices are effectively set.

How does this benefit the owners? It establishes a system that is ultimately fare for revenue sharing and should not greatly impede the local markets in Latin America. One issue of concern is that an international draft would collapse the baseball talent streams in areas like the Dominican Republic. In these areas, part of the local economy are buscons who develop children at a very young age and move them into position to sign with big league clubs. Finding fees are associated with these dealings. A run of the mill draft with no leveraging between teams would nip that in the bud as there would be less incentive for an MLB team to invest in these regions. Keeping them free agents with set contracts enables this to continue and MLB continues to get their talent pool stream.

But does this system benefit a player like Dice-K or Hideki Matsui? No, not in this form. Under such a plan, these players would wind up receiving a 10MM bonus and then be forced under the renewal/arbitration system. This would need to be adjusted and a potentially easy solution would be to set aside an additional 20MM in revenue sharing. This money would be used for a pay for play system similar to what is instituted in the NFL. Basically, during the renewal years players will receive a certain point total for plate appearances or innings pitches. The quality of those innings or plate appearances are not considered, just how often a person actually player. This results in a final point total. Add up all of the players that fall under this classification of renewal year talent. Divide 20MM, but that number to determine a price per point value. Players then are paid on how many points they have accumulated.

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