02 December 2016

The CBA and Middle Market Teams Like the Orioles

With an expiring Collective Bargaining Agreement (CBA) this past week, Major League Baseball and its Players Association avoided any contentious controversy by agreeing to a new deal within hours of its deadline. The mid-90s labor strike in Major League Baseball is considerably in the rear view and we can once again look forward to five uninterrupted years of baseball, as the new terms hold through the 2021 season.

The Orioles remain a clear cut mid-market team, though payroll has certainly expanded and even landed the organization in the top ten for Opening Day payrolls in 2016. Much of that rise to over $147 million was due to Chris Davis’ mammoth seven year guarantee at $23 million per. Still, cut that Angelos-driven contract out and the team would have sat 15th – again, middle of the market.

So what impact will the new CBA have on baseball? How about on the Orioles, a team that spends heavier than the Oaklands and Tampa Bays of the world but won’t soon be matching offers from the Los Angeles’s and New Yorks?

Three possible impact points of the new CBA on the Baltimore Orioles (in no particular order):

Disabled list
Old rule: Minimum stay was 15 days (except for the seven-day concussion list).
New rule: Minimum stay is 10 days.

While the Orioles of the past couple of years have utilized the Disabled List (DL) in a number of ways, often to stash a pitcher between starts on a long layoff who has a bum ankle or forearm, the creativity at teams’ hands now is increased – specifically by 33%. A shortened DL stint will lead to an innumerable increase in players directed to the sidelines across baseball. Now those eight day hamstring pulls won’t take up a roster spot, and skipping a pitcher’s turn in the rotation won’t require creativity to free up a roster space anymore – short term shoulder soreness will suddenly creep up quite commonly with starting pitchers, if I had a wager in the grand scheme.

Interestingly enough, this aligns with the 10-day rule required of players sent down to the minor leagues who cannot be summoned back to the Major League roster for at least 10 days except for a DL replacement. With this change, the Orioles won’t have to option their best starting pitcherto High-A again and rather can tell the league he strained his quadricep and needs to hit the 10-day DL.

Roster construction
Old rules: 25-man active roster, up to 40 active players in September
New rules: 25-man active roster, up to 40 active players in September

This is about the lack of a change more than an actual “impact point” that comes from new language of the agreement.

Buck Showalter and Dan Duquette, as hinted at above, are masterminds of roster construction, so they say. They utilize each of the 25 spots for unique needs and rumors of an added 26th roster spot in the future would have only increased flexibility in that strategy.

But alas, the 25-man roster remains and Nolan Reimold’s inevitable addition this offseason will continue to wrap up one of those spots for years to come.

Draft-pick compensation
Old rule: A team signing a player that was given a qualifying offer by his former team but surrender a first round pick in the following season's draft. (The top 10 first-round picks were protected.)
New rule: If a club hasn't exceeded the luxury tax threshold and signs another team's player who received the qualifying offer, it will surrender a third-round pick. (Teams that have exceeded the threshold will surrender second- and fifth-round picks, plus $1 million in international pool money)

The Orioles have not and likely will not soon exceed the luxury tax threshold, so the new rule would mean the team’s future late Spring Training additions of the next Ubaldo Jimenez, Nelson Cruz and Yovani Gallardo will only cost the club a third-round pick and later – no more first-round selection on the line.

Important to note that these rules take effect starting next season, so it will still take a sacrificial first rounder to unite Jose Bautista with Darren O’Day this winter.

In reality, though, the CBA details a selection of changes that will make no major or immediate impact on the Orioles but rather on the top spenders and bottom feeders of the league:

Luxury tax threshold goes up
Old rule: The threshold in 2016 was $189 million.
New rule: It increases to $195 million in 2017 and goes up to $210 million by 2021.

Not really in Peter Angelos’s wheelhouse to spend up to these amounts and even pay a major tax for exceeding those imposed limits. Honestly never thought this would even come close to being a discussion point, though ownership ponied up significant cash for Chris Davis and put themselves in the high payroll conversation.

No international draft
Old rule: No draft. The Phillies had the highest international pool money last season at $5.6 million, and teams could exceed their allotted money but would pay a penalty.
New rule: Still no draft. Pool money will reportedly be hard-capped in the $5 million to $6 million range per team.

Dan Duquette was napping when these terms were being hammered out.

Slot money goes down for No. 1 pick in the U.S. draft
Old rule: The No. 1 overall pick in 2016 was slotted at $9.015 million.
New rule: The No. 1 overall pick in 2017 will be slotted at $7.4 million.

Less discrepancy in pick values spread out over the first 10 rounds of the draft, but the Orioles continue their push to a bottom-20 pick in the coming years of drafts that won’t see a major impact here.

And if the team does eventually sell off as Manny Machado’s inevitable Yankee contract comes to fruition, there is a non-zero chance they find another Matt Hobgood laying around to avoid the high slot value in the first round.

The season will last four days longer
Old rule: 162 games!
New rule: Still 162 games!

No real winner or loser here among teams. Rich teams can’t buy days off and poor teams can’t sell theirs. Maybe next CBA.

As Tim Kurkjian concluded over on ESPN, baseball executives and the MLBPA were wise to work this out on peaceful terms. The game is now a 10-plus billion dollar industry in which owners would be  to stop reeling in such hauls of cash and players would be frivolous to stop earning any money at all (beyond those with endorsement deals).

CBA information/recap from David Schoenfield (ESPN)
Salary graphic from Cork Gaines (Business Insider)

1 comment:

James L said...

Any word on the status of the MASN appeal? Shouldn't hearings have been held by now?