The Nature of Baseball's Labour Movements
By Giant_Causeway

With the World Series over, we now turn our attention to the off season in preparation for the next. It may be a daunting task but part of handicapping baseball is knowing your prospects, players and their circumstances surrounding them. As with young players in all sports, their potential is what entrances fans, fantasy gamers, GMs, and bettors. Given the longevity of a baseball career, what appeals to fans is how enduring a top star can be. We can follow the rise and fall of a player. In some ways, like soap opera characters we develop favourites and as a consequence, we have “invested” our time and form some attachment to those players/soap characters. There is something enchanting about watching a young star blossom into a bona fide MLB star, graduating to an elite level and performing until he inevitably hit the decline phase. As a Mets fan I have had the pleasure of watching David Wright and Jose Reyes develop into elite players from their minor league days. Reyes had always been hyped up and didn’t disappoint whilst Wright was a high draft pick but quietly made progress until his promotion to the big leagues.

In June we saw the belated call-ups of David Price and Matt Wieters to the majors. Both experienced contrasting fortunes with Price unable to pitch deep into the game that saw the Rays blow a 10 run lead on his MLB season debut and Wieters enjoying a winning MLB debut against the Tigers with the Baltimore Orioles. As I noted in the pre-season article, MLB young players to watch, both have tall reputations and were top draft picks but were held back at Triple AAA level in a bid to preserve service times. Both were ranked no.1 and no.2 in most top prospect rankings and arguably should’ve started the season in the majors. Contrast their clubs’ handling of them with the Tigers who aggressively promoted top prospect, Rick Porcello to their opening day roster in a bid to win now despite writing off $14m in releasing Gary Sheffield who enjoyed an Indian summer with the Mets. What those clubs highlight is how different clubs manage their payroll, their differing organisational philosophy and how clubs balance the needs of the present to the needs of the young players.

Clubs must also balance the needs of the players’ union as agreed in the collective bargaining agreement set in 1995 during the strike season. In the States, labour movements are religiously monitored through the players union which has already held a strike in the 1995 season due to unfavourable conditions that suited the owners. They have already made noises regarding the availability of Barry Bonds alleging ownership collusion. Unlike football (soccer) in general, contracts must be honoured to the last details. Every penny must be paid with no deals or redundancy packages allowed. For example, Gary Sheffield and Andruw Jones were two high profile players in the last year of their contracts that were deemed surplus to requirements by the Tigers and Dodgers. But they could not trade them with their hefty contracts and both were released with both sides accepting the

Volunteered a lower salary to force a move to the Red Sox Alex Rodriguez

cost. In effect, they must still pay their wages despite both players now plying their trades with the Mets and Rangers respectively on the hook for just the major league minimum salary. Alex Rodriguez was another player who actually volunteered a lower salary to force a move to the Red Sox from the Rangers but the union refused to sign off on the deal fearing an unfavourable precedent and as they say, the rest is history!

Players are also under pressure from their unions to set the bar. Like in Law, players’ agents use precedents to justify their demands pointing to previous salaries awarded to other players as a benchmark. For example, when Johan Santana was traded to the Mets, he made it clear he wanted a record breaking contract that dwarfed Barry Zito’s $126m deal with the Giants. The Mets understood as he was far better then Zito and agreed a record-breaking deal (at the time before CC Sabathia’s contract with the Yankees). Manny Ramirez forced his way out of Boston last summer wanting another big contract rather then the “paltry” $20m option years the Red Sox had in ‘09 and ’10. But he hadn’t foreseen the economic troubles citing, “Gas is up and so am I!” Predictably he didn’t stay true to his word and did not want a lower salary despite the economic troubles gathering pace demanding $100m over 5 years even at 37 years of age. However, the Dodgers stood firm and refused to bid against themselves Yankees style opting for a compromise of $45m over 2 years which suited them to the ground given Manny’s age.

One thing that may surprise you is the sheer volume of baseball speculation in the off-season. The internet media has plenty of columns dedicated to speculations on free agent signings and trades dubbing the gossip industry, “The Hot Stove”. To follow those labour movements can be time consuming and to ensure better understanding, we break down the exact nature of baseball’s labour movements. Baseball’s labour movements come through 5 main routes: The amateur draft, free agencies, Rule V draft, waivers and trades.

Amateur Draft

In June, baseball holds their amateur draft with the country’s top college and high school players available to all MLB clubs by way of selection process. To ensure parity in MLB, the team with the worst record in the previous season are anointed the number one pick and so on. However unlike the NFL, clubs are not allowed to trade their draft picks or trade their prospects immediately. For a team to have multiple picks in the first round, it is likely they will have not have signed a “Type A” free agent and they, themselves have lost a “Type A” free agent after offering salary arbitration. (Type A and B free agents are defined by the Elias Sports Bureau as the top performing players in their position by percentage though there is recent discontent in MLB over how they formulate Type A and B status) Put simply, for a team to ensure draft picks if they lose their free agent, they must offer salary arbitration. For example, the Diamondbacks had traded for Dunn in 2008. Given his numbers, Dunn is easily a Type A free agent. However, in October 2008 with the economy struggling, the Diamondbacks declined to offer Dunn salary arbitration for fear he would actually accept therefore forfeiting a likely extra first round draft pick and a sandwich pick (between the first and second rounds).

Though baseball’s amateur draft does not have the hype and fanfare their NFL counterpart enjoys, it is equally as fascinating. Part of baseball’s problem in trying to match the hype and lucrative advertising their NFL counterpart enjoys is the time it takes a young prospect to reach the majors. Whilst NFL prospects could possibly play in

Capable of a triple digit fastball Stephen Strasburg

the NFL in that very same year or the next, baseball’s prospects can generally take 4-5 years before they reach the majors. In that time, fans will have forgotten them and moved on to the “next big thing”.

This year, the Washington Nationals held the top pick and as expected they went for Stephen Strasburg, the much-hyped San Diego alumni with the triple digit fastball. But in the grand scheme of things, there is one giant sub plot in the shape of uber-agent Scott Boras who represents superstar Alex Rodriguez, Manny Ramirez, Mark Teixeira and Daisuke Matzusaka among others. He has already caused controversy in the free agency market with his outlandish demands and “one dumb owner” theory. But he had outdone his previous controversies when he announced Alex Rodriguez would not be resigning with the New York Yankees in the middle of the 2007 World Series enraging MLB. He also called the Red Sox’s bluff over Mark Teixeira in the off-season by simply going to the Yankees and getting the contract his client wanted. Reports had Strasburg looking for a contract in excess of $40m whilst Boras has already “leaked” demands of $50m. Is he a sure thing? Not all top draft picks are future MLB players. There’s been some spectacular drafts in recent years and some busts. The Mark Prior/Joe Mauer draft was memorable as both players were regarded as sure things and blossomed into major leaguers relatively quickly as college players. The 2005 draft featuring Justin Verlander was spectacular in that plenty of draftees in that year have blossomed into major leaguers. In the end, the Nationals managed to work out a deal of $17m which may be far removed from talks of $40-50m but is still the highest signing bonus in history.

It’s a time of the year when ballclub’s’ scouting and development department take centre stage. In this era of bloated contracts, clubs will be under pressure to ensure their first round draft pick are not only worth the money, but also they are of a standard befitting a top draft pick. For example, in 2008 the Yankees picked Gerrit Cole as their first round draft pick only to discover he had already signed up to UCLA and was never going to sign preferring to go to college. Previously, Wade Townsend and Jered Weaver spurned their clubs’ offers in favour of holding out for more. Jered Weaver’s agent? Yes, the hard-balling “avenging” agent, Scott Boras! Townsend has experienced the down side in rejecting the offer whilst Weaver has gone on to become a solid starter for the Angels.

Next year, it would not be surprising if Boras holds the key to the entire first round managing no less then 5 projected first round picks including the phenom, Bryce Harper. With many clubs refusing to deal with Boras and many clubs fearful of Boras’ demands, he also holds the destinies of other first-rounders in his hands. But clubs like the Nationals, Orioles and the Astros, where ownership needs credibility to restore faith in their fans could only serve to play into Boras’ hands and it will be interesting to see what the next collective bargaining agreement between the owners and the union can bring for amateur players.

Free Agencies

Baseball teams can sign undrafted free agents, normally young teenagers from the baseball breeding hotspots of Venezuela, Dominican Republic and Puerto Rico to bolster their farm systems. Examples of such signings are Felix Hernandez, Jose Reyes, Jose Tabatha, Michael Inoa, etc. In some ways they are cheaper then signing players via the amateur draft with the added mystery as to how they will blossom. However there have been recent controversies regarding players from the aforementioned countries who sign on faked birth certificates rendering them much older then they declared themselves to be. They can also sign free agents from the independent leagues and from foreign leagues like Japan and South Korea. Examples are Scott Richmond of the Bluejays and Kenshin Kawakami of the Braves. They may also jump on a Cuban player who has defected to the US. Examples include Jose Contreras, Caciedo, Alexis Ramirez who all play for the Chicago White Sox. This off-season’s biggest attraction figures to be Cuban defector Aroldis Chapman the fireballing lefthander who impressed at the WBC and reputedly throws 102mph consistently. But for the most part, the free agency market for prime talent occurs in MLB.

When a player’s contract expires, the club has the option of offering salary arbitration. If the player accepts, he will be guaranteed a contract that is worth no less then 12.5% of what he had earned in the previous season. If a player decline, the club is compensated with draft picks from the team that player eventually signs with. To gauge what level of draft picks the club is compensated with, players are categorised into two types. Type A denotes a player who is in the top performing 30% at his position. Type B denotes a player who is in the top 60% at his position.

However this economic climate has left clubs fearful of offering salary arbitration to their free agents with players like Bobby Abreu, Adam Dunn, Pat Burrell and Jason Giambi all not offered salary arbitration for fear they will actually accept. Thus clubs are even willing forgo potential draft picks for some measure of cost reduction in their budgets.

But last off-season, the Milwaukee Brewers endured a nightmare with Ben Sheets suffering an injury after declining salary arbitration and as a consequence, the Brewers will not receive compensation as he has not signed with anyone. Then CC Sabathia signed with the New York Yankees who also signed 2 other Type A free agents. However, the Brewers will not receive a first round draft pick from the Yankees as the Los Angeles Angels’ Mark Teixeira ranked higher in the Elias ranking then CC Sabathia. To lose two Type A free agents and not receive any 1st round draft pick is tough and even more so for a small market team.

Rule V Draft

This draft is for players not protected on the 40 man roster and for whom they have run out of options. This generally takes place in December at the annual General Managers Winter Meetings. Every club have a pick but the player they pick must be on their 25 man roster for the duration of the entire season if they are to retain him or that player must be offered back to his original team. Rule V draft picks include the likes of Johan Santana and Royals closer, Joakim Soria.

Waivers

If a player is out of minor league options and the club wishes to designate him for assignment, the club must place him on waivers with no claim for that player to head to the minors. There are also several reasons a club may use the waiver wire. They may look to gauge interest in their player or attempt to dump salary in effect, a “fishing” expedition to gauge potential trading partners. MLB.com offers a more comprehensive definition of waivers.

"When a player is put on waivers, he must be offered to the other teams in reverse order of the standings, and if he is claimed by one of the teams, he cannot be traded. However, the team that placed the player on waivers can either withdraw the request in order to keep the player, or let the player go to the claiming team. The claiming team would then have the rights to the player and would absorb the player's contract.
A waiver is a permission granted for certain assignments of player contracts. If more than one club in the same league makes a claim on a player's contract, then the club lower in the standings at the time gets the player. If clubs in both leagues claim the player, preference goes to the club in the same league as the club requesting waivers".  MLB.com

A player can generally be placed on waivers at any time of the year but they generally become well known as part of the conditions of the second trading deadline in August.

Trades

This route provides the most fascinating of player movement. As with plenty of fantasy games, trades are an integral part in moulding a ballclub. Like betting, there has to be two parties who obviously disagree on their opinions for a trade/bet to take place. As different teams have differing needs, they may attempt to trade one of their players with the right team who have the right parts required. Example includes the three way trade

At the centre of a three way trade JJ Putz

involving the Mets, Indians, and the Mariners. The centrepiece of that trade was JJ Putz who the Mets wanted as setup man. To acquire him, they had to give up 5 players. However, Seattle did not want all the 5 players the Mets were willing to give up and involved the Indians who had Gutierrez and coincidentally, they wanted a player from both the Mets and the Mariners.

One example of a team wanting to dump salary but rebuild for the future was the Cliff Lee trade in which they “saved” a reported $8m option for next year plus this season’s remaining salary whilst wanting premium young prospects in return. They received young pitcher Carlos Carrasco who has endured a turbulent MLB debut, Lou Marson, Jason Donald and Jason Knapp which represents a fair return but leaves a suspicion that there is no elite prospect in that deal. Still a much better return then the Santana to the Mets trade which bordered on daylight robbery.

Generally there are only two trading deadlines. The non-waiver trading deadline is in July when all teams are free to trade their players. The waiver trading deadline is at the end of August with restrictions on player movements. If two teams agree to a trade, all players involved must pass through the waiver for the trade to occur.

There it is! It’s not complicated but for fantasy gamers, they religiously follow labour movements in the hope of finding that one bargain to elevate their team to the upper echelons of their leagues. Betting wise, it helps to keep track of all players as there is that one player that could impact the team. One such player to look out for is the Indians’ Andy Marte who was a top prospect with the Braves and a centrepiece in a trade with the Red Sox who subsequently shipped him to Cleveland in the Coco Crisp trade.

Good Luck and happy hunting for all fantasy gamers and baseball GMs!

Giant_Causeway