New MLB CBA a Gross Injustice to Free Agents

With recent lockouts taking place in the NHL, NBA and NFL just in the past two years, baseball fans can be thankful that Major League Baseball’s future will remain secure through the 2016 season. It is old news today, but as the league concludes its first full year under its new collective bargaining agreement agreed to by the players and owners in November 2011, certain players —like pitchers Kyle Lohse and Rafael Soriano — have fallen victim to a collection of new rules.

MLB adopted in 2012 a more restrictive policy to its first-year player draft similar to the NBA’s and NFL’s slotting systems, limiting teams’ ability to spend in what was previously a free market. Instead of allowing teams to pay as much as they want for their drafted players, MLB now assigns a specific price for each pick. Teams may still exceed those “recommended” prices but face significant sanctions — such as the loss of future draft picks — if they exceed the overall allotted cash pool for their collection of picks. 

In other words, retaining draft picks and therefore enabling a greater salary cap for draft picks has become vital. Teams are forced to change their drafting and free agency strategies, as losing draft picks is now significantly less attractive than in the past.

So how does that affect players such as Lohse and Soriano? Other than violating the draft salary cap, the only other way for teams to relinquish draft picks is via free agency, by signing players who were offered “qualifying offers” — one year and $13.3 million this offseason — from their teams after the conclusion of the 2012 season. If the player rejects the offer, any new team with which they sign loses a first-round draft pick (or second, if the team picks in the top 10 in the first round) and money from their draft pool, and the player’s old team will receive the pick and money as well. As a result, teams immediately target other players that did not receive qualifying offers from their old teams to avoid the penalties. 

Players like Soriano and Lohse (the latter of whom has claimed he has not received an offer of any kind this winter), who are both deserving of lucrative long-term deals given their track records and phenomenal 2012 seasons, now have significantly less leverage in contract negotiations with teams and thus remain unsigned. While it’s hard to imagine that players of their caliber will remain idle come opening day, as injuries and failed trade negotiations surface, they will likely sign deals for significantly less than they originally anticipated.

But while the new system is incredibly detrimental to some players, it is beneficial to others. Another part of the new rules states that players traded midseason are ineligible to be offered qualifying offers at season’s end. Starting pitchers like Zack Greinke and Anibal Sanchez were hot commodities this winter, signing lucrative deals with the Los Angeles Dodgers for six years and $147 million and the Detroit Tigers for five years, $80 million, respectively. Although Greinke was arguably the top free agent available and likely unsusceptible to the effects on the signing team’s draft flexibility anyway, it is conceivable that the price might not have reached $147 million with the threat of collateral damage to the signing team’s draft.

Sanchez, however, embodies an excellent comparison to what could have been for Lohse had he not been eligible to receive a qualifying offer, as well as an appropriate demonstration of the new CBA rules in action.

Based on both Sanchez’s and Lohse’s 2012 performances, it is impossible to argue that Sanchez was significantly more deserving of the contract he received, and actually, the opposite case can be made. Using traditional statistics, Lohse’s earned run average was a full run better, 2.86 to Sanchez’s 3.86, while his walks and hits per innings pitched checked in at 1.09 against 1.27 for Sanchez. Although Sanchez bested Lohse in strikeouts (167 to 143), the difference is not huge, suggesting Lohse had a slightly better 2012 season. 

Although it is also impossible to ignore age (Sanchez will be 29 on Opening Day, while Lohse will be 34), consistency (Sanchez’s career ERA of 3.75 versus Lohse’s of 4.45 — though stronger recently), and prospect pedigree (Sanchez had a strong reputation as a minor league player with excellent potential), surely Lohse could reasonably have expected to land a deal of three to five years at an average annual salary from $12-16 million per year, especially given the constant demand for quality starting pitching. 

Lohse’s likelihood of landing such a deal, which he expected when he turned down a one-year pact at $13.3 million with the Cardinals, however, now appears increasingly unlikely. It is evident that the combination of new rules regarding the draft and free agency has limited the market for Lohse’s services and serves as an injustice in comparison to some of his fellow free agent counterparts.

Preston Barclay s a junior in the McDonough School of Business TURNING TWO IN THE 202 appears every Tuesday.