08 April 2015

How to Fix the Service Time Problem

Keith Law recently wrote an article for ESPN Insider ($$) discussing the Kris Bryant situation. Keith Law notes that the rules state that a player with six years of major league service is able to become a free agent while a player with six year minus one day is not and therefore must play for his current club for another year.  This encourages teams to leave players in the minors for a few weeks of the season in order to gain an extra year of player control even if it means that they won’t have their best players on the roster to start the season.

As summarized by MLBTR, Keith Law proposes the following solution. When a team puts a true rookie on the active roster to start the year, and the player then reaches exactly six years of service, that player gets a special one-year form of free agency in which any team may make a single-season offer but his current team gets the choice to match the high bid. Law posits that this approach would encourage teams to go ahead and add their best prospects to the roster, comforted by the knowledge that they can still maximize team control — even if it ultimately comes at a (potentially much) higher cost in the final season.

This is an interesting idea but probably not one that clubs would consider. Teams pay more for players in first year arbitration as opposed to those that are eligible for arbitration due to being a Super Two and therefore such a plan would cost the teams more money in year four through six. But the real problem is that other teams would be willing to offer inflated sums of money to such a player for the following reasons. They wouldn’t be required to give up a draft pick, it’s only a one year contract for a player in his prime and they’d receive a draft pick the next year if he goes to another team as a free agent. If a player who signs a one year deal gets hurt it isn’t potentially crippling like a six year deal that goes sour. This idea ultimately is bad for small market teams and therefore simply wouldn’t be implemented.

I propose that a player that starts the season and is never sent down to the majors after making it to the majors’ follows the following pay schedule. 

  • His salary for his first three years in the majors will be set by the team provided that it’s at least as large as the minimum salary.
  • His salary for his fourth year in the majors will be set by the team provided that it’s at least as large as four times the minimum salary. Players can’t be optioned after this point without their permission.
  • The player will be eligible for arbitration for his fifth and sixth year in the majors like all other arbitration eligible players.
  • The team will have the option to sign the player for his seventh year in the majors to the larger of the amount necessary for a qualifying offer or 50% larger than his previous years’ salary. If the team decides not to exercise this option they can still offer the player a qualifying option. If the player rejects the qualifying offer then he’ll become a free agent with all rights that belong to a free agent.
The teams would consider this pay structure because it gives them a slight discount in year four because it’s likely that the average salary for a super two player would be less than four times the minimum salary and this would allow them to have star prospects start the year in the majors without giving up a year of team control. 

Players would consider this pay structure because it would encourage teams to call up prospects at the start of a year and would ensure that they either become free agents after six full years of service or that they would at least receive a fair salary in their seventh year of service. It would only be plausible to keep the best arbitration eligible players in they were going to earn a minimum of the qualifying offer in the seventh year.

I think that Keith Law had a good idea about how to encourage teams to have top prospects start the roster in the majors but that it was ultimately weighted too heavily in favor of the players. This idea ensures that both players and teams receive some benefits and therefore makes it more acceptable for both sides.


Anonymous said...

Seems the obvious thing to do for year four would be to make it a fraction of the QO. Maybe 15-20%.

Matt Perez said...

The minimum salary for 2015 is $507,500. Four times that is $2,030,000.

The QO is $15,300,000. 15-20% of that is something like $2,300,000 to $3,060,000.

The 15% amount and my proposal are in the same ballpark. I don't think anything higher then that will work because you need the amount to be lower than what a player will receive as a Super Two. But something like 10-15% could work.

I think using the minimum salary makes more sense because that's more relevant to an arbitration eligible player than the QO but it doesn't really matter.

Anonymous said...

QO makes more sense because it ties it to the market as opposed to the somewhat arbitrary minimum salary.