New MLB CBA Over-Complicates Qualifying Offers

New MLB CBA Over-Complicates Qualifying Offers

Last year I wrote about the Qualifying Offer (“QO”) rule, and how it affected player mobility.  And just when you thought you had a handle on how it worked, the owners and players went ahead and renegotiated the CBA.  In the process, they bolloxed up the QO in a way that hardly anyone can comprehend.  However, if you are frequent reader, you probably enjoy this stuff as much as I, and have the patience and curiosity to know what is, and will be, for the next five years.  Here goes:

A bit of history.  Under the old CBA, if a team made a QO to a free agent player (the amount of the QO is predicated on the average of the top 125 salaries from the previous year; for 2017, the amount is $17.2M), that player had seven days to accept and sign a one-year deal; or reject, and become an unrestricted free agent.  The term “unrestricted”, however, was a misnomer, because any team acquiring that player had to forfeit its first round draft pick the following season (the only exception being teams with picks 1-10; they had to relinquish a second-rounder); and the offering team was compensated with a so-called “sandwich pick”, which is between the first and second rounds.

One more thing: the QO draft pick penalty was only applicable to players who played the entire season for their prior team (if you were traded mid-season, or joined the team after the amateur draft, an acquiring team did not face the penalty). Got it?

Well, if Occam’s Razor applies in most circumstances, its bizarro brother applies to MLB. Here is the system that will apply until 2021:

For starters, the owners and players split the world into three sets of teams: (1) those over the luxury-tax threshold (i.e., teams whose payroll exceeded $189 million last season, $195 million this coming season, escalating in later years); (2) those from the 15 smallest markets that receive revenue sharing money; and (3) teams that don’t fit into either category.  These tiers will be helpful as we move forward.

Here we go: A team offers a player a QO.  That player now has ten (not seven) days to accept or reject.  If he accepts, all is right with the world, he signs with his current team, and there is no confusion.  If he rejects, we must follow the Rube Goldberg contraption put in place to see what happens.

Let’s start with the team losing the free agent (herein, “the Loser”):

If the free agent signs a contract of $50 million or more (regardless of number of years), the Loser gets draft pick compensation.  However, the form of compensation is dependent on the Loser’s good or bad deeds.

  • If they are over the luxury-tax threshold, they receive a draft pick at the end of the fourth round.
  • If they are one of the small market teams, they receive a pick at the end of the first round.
  • If they don’t fit into either category, they receive a pick at the end of the second round.

With me so far?

If the free agent signs for less than $50 million, then:

  • If the Loser is over the luxury-tax threshold, they receive a draft pick at the end of the fourth round.
  • If they are below the luxury-tax threshold, they receive a pick at the end of the second round.

Now to the team acquiring the free agent (herein, “the Buyer”):

  • If the Buyer is over the luxury-tax threshold, they lose their second and fifth highest draft picks, plus $1 million in international pool money.
  • If they are one of the 15 small market teams, they lose their third highest draft pick, but no international money.
  • If they are none of the above, they lose their second highest draft pick, plus $500,000 in international pool money.

Under the old CBA, if a Buyer already acquired a QO free agent, and thus gave up their first round pick, there wasn’t much pain involved in acquiring a second QO player, as they only had to then forfeit a second-round pick.  Not anymore:

  • A Buyer over the luxury-tax threshold acquiring a second QO player now forfeits all of the following: their second, third, fifth, and sixth highest picks, plus $2 million in international bonus pool money.
  • If they are one of the 15 small market teams, they lose their third and fourth highest draft pick, but no international bonus pool money.
  • If neither, they lose their second and third highest draft picks, plus $1 million in international pool money.

One last rule on which I have been trying to get clarity: no player may be made a QO more than once in his career.  I am not certain if this retroactive (meaning, could Jose Bautista (who was offered a QO by Toronto) sign a one-year deal and get a QO next year, or is the new CBA retroactive, and he is protected forevermore?  More to come on that.

There you have it.  Does everyone understand?  Are the implications to each team perfectly clear?  Great!

Next time we can deal with the International Bonus Pool rules…

PLAY BALL!!

Under Armour to Mar MLB Jerseys

Under Armour to Mar MLB Jerseys

It started innocuously enough, with a sign on the outfield wall. And soon there were three or four. Before you knew it, there was advertising behind home plate, rotating inning by inning.

 

Some people loved the throwback nature of the signage — it reminded them of Ebbetts Field (with its Schaeffer beer ad) or the Polo Grounds (with its Chesterfield cigarette ad) — harkening back to days when ballparks weren’t multi-use and had incredible character.

Then, 1992, we woke up to find the MLB logo on the back of our big-leaguers’ caps. No matter, it represented the game that we love, and it was a small logo near the base of the neck.

A couple of years ago that same logo made its way to the back belt loop of MLB pants. As an aside, you always knew when a player replaced his “gamers” with an old pair, as the logo was noticeably absent.

It took more than twenty years, but creep continued. Beginning with last season’s playoffs, much to the chagrin on Phil Hecken and Paul Lukas, New Era placed their logo right there on the temple. Which begs the question: Is no place sacred?

Since the snowball had already started rolling, the powers-that-be decided to simply get out of the way. Which led to the announcement made at this week’s Winter Meetings that will forever alter the sartorial arc of Major League uniforms. Beginning in 2020, the front of Big League jerseys will be desecrated with advertising.

For years we have discussed the blurred lines between amateurs and professionals. In that context, we normally discuss money — money paid (or not) to athletes. But one way the lines are not blurry at all is in licensing. Whether you work for Boston College or the Boston Red Sox, whether you draw a check from San Diego State or the San Diego Padres, you are looking to maximize licensing revenue. And, as such, you now make your uniforms, well, uniform.

Starting in 2020, MLB uniforms will look no different than college uniforms. And that isn’t just a shame, it is downright sad. There are few pieces of iconography in our world left unperturbed by commercialization and advertising. To be clear, I am not a “get off my lawn” guy, and have been perfectly okay with the inundation of advertising in ballparks across the country (although I could do without the ads on the foul pole), but do we really need to mar the front of a baseball jersey?

Once Under Armour begins outfitting Major League teams (including base layers and outerwear), their logo will be front and (off) center, on the right chest of every Big Leaguer.

We have known for some time that UA won the licensing right to MLB uniforms (Majestic has been providing uniforms since 2005). But it wasn’t until the current meetings in Maryland (UA’s home state) that we learned where that logo would reside. According to MLB Commissioner Rob Manfred, having the logo on the front of the uniform rather than the sleeve more than doubled the license fee. While we don’t know the actual deal terms (they have yet to be disclosed), we can affirmatively state that there is a price tag on the integrity of the game.

For over 100 years fans have gone to the Bronx to see Yankee pinstripes. Beginning in 2020, their favorite players will wear a version of the jersey shown at the top of this article.

The Braves have had some version of tomahawk on their jerseys since 1945. This is what that will look like in 2020:

 

The Giants (both in New York and in San Francisco) had their name on at least one of their uniforms since 1947. Starting in 2020, they will look like this:

Baseball has been criticized in many circles for being anachronistic, being too tied to its past. There is consternation that basketball and football are better at appealing to a new generation of fans. That, no doubt, was the impetus for this deal. Being affiliated with Bryce Harper, Steph Curry, Cam Newton, and Jordan Spieth will help attract a younger audience. But, do they have to sully the Major League uniform?

Because what is depicted above are just a guess, I remain optimistic. I truly hope that Under Armour has the modesty and humility, and MLB has the integrity and humanity, to make it a raised logo that appears in the same colorway as the uniform. That would still give UA prominent real estate without adversely affecting (too much) the team logos that have been in place — unscathed — for generations.

PLAY BALL!!