Fixing the Free Agent Compensation System
Juan Cruz, Jason Varitek, and Orlando Cabrera all have something in common - they're free agents who aren't actually "free." All three players have seen their market value depressed by the Type A compensation status attached to their names, as other teams remain hesistant to give up a top draft pick to sign them. In essence, their prior employers are still enacting some control over them even in free agency.
The above example is one of many problems created by the current free agent compensation system:
- An archaic calculation method led by
STATS(edit) Elias which uses less-than-ideal data points to conclude that 40-year-old Russ Springer (Type A) is in the elite tier over Milton Bradley (B), while Juan Uribe (B) is in a class above Jason Giambi. - The awkward "will he or won't he?" arbitration chess match that teams play with their own departing free agents. Teams are forced to either offer arbitration to players they have no intention of signing, or receive no compensation for losing a good player.
- Penalizing teams for spending money to improve their rosters, by forcing them to give up a top draft pick to sign an elite free agent (Type A).
- The inconsistent compensation that teams receive for losing top tier free agents. In exchange for losing A.J. Burnett, the Blue Jays could've received the 17th overall pick in next year's draft (to go along with a sandwich pick at around #34 overall). Instead, they'll receive the sandwich and the Yankees third-rounder - right around pick #100 - all because of the team that signed him and the free agent machinations around him.
How to fix this?
You could pick better different stats to evaluate and rank the free agents each year. But no criteria will be perfect, and it would be difficult to find a set that pleased everyone in the game.
Another issue is that using stats from previous years to rank players serves to compensate teams for past production. Shouldn't teams instead be compensated for the production they are projected to lose in the coming years, by virtue of not having that player's services anymore, rather than what they've already done?
Here's my quick-and-dirty solution to the above problems, using figures that everyone can under$tand:
Let the free market dictate free agent compensation.
The larger the contract that a player signs, the better the compensation granted to his former team.
I'd propose creating a sandwich round that is an actual, true round - 30 picks, #31-60 - between the first and second rounds.
The total sum of free agent compensation - gaining comp picks in return for losing free agents - is comprised within those 30 picks.
The most valuable free agents - ones that sign nine-figure deals - are now worth 3 draft picks to their previous team, rather than two. But no team can lose its first round-pick in this scenario, so the best possible compensatory pick is #31 overall.
From picks #31-60, teams are compensated in order of the size of the contract that their free agent eventually signed.
Ignore for a moment that some players re-upped with their own teams, and lets look at how this hypothetical would roughly play out if it were in place for the current FA class:
- Teixeira - worth three picks to the Angels - #31 overall, 32, 33
- Sabathia - #34, 35, 36 to the Brewers
- Burnett - worth two picks #37, 38 to the Blue Jays
- Lowe - #39, 40 to the Dodgers
- Ramirez - #41, 42
- Dempster - #43, 44
- K-Rod - worth one pick (we've now dropped to deals worth $40MM or less) - #45
- Rafael Furcal #46
- Milton Bradley #47
- Raul Ibanez #48
- Adam Dunn #49
- Oliver Perez #50
- Picks #51-60: one pick apiece in compensation for free agents who earned contracts of $10-20M in total guaranteed value: Kerry Wood, Edgar Renteria, Jamie Moyer, Casey Blake, Brian Fuentes, Pat Burrell, Orlando Hudson, Ben Sheets, Bobby Abreu, Andy Pettitte, Orlando Cabrera.
There is a huge mass of free agents - everything from Casey Fossum to Jason Giambi - who do not garner compensatory picks for their team under this scenario. I think that's perfectly ok - if a player wasn't worth at least $10M on the open market, his team doesn't deserve any special compensation for losing him. The most well-run teams will be able to replace players like those internally or via trade, anyway.
I've made the two $100M free agents of this offseason worth 3 compensatory draft picks, and free agents who sign deals of $40-100M worth two. There's nothing scientific about how I came up with that, and it's certainly open to a more sabermetric critique - there's a better way to create a cutoff to distinguish between "three, two, and one draft pick players," but I'm proud of the end result:
- teams that lose elite FAs are guaranteed a consistent, more predictable compensation system that's dictated by the free market rather than bad data,
- middling free agents like Varitek and Cabrera aren't punished by the draft pick glass ceiling, and it
- avoids penalizing teams for investing in their product on the field by eliminating the cost of a first-rounder for signing elite talent.
5 recs |
130 comments
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Comments
I like it NSJ!
I’m pretty sure if Ben Sheets was not gonna cost the A’s a first rounder he would already be wearing a green and gold uniform. Not sure about Cabrera but I don’t really want him anyway.
by mrod on Jan 15, 2009 7:30 PM PST reply actions 0 recs
Ben Sheets is not going to cost the A's a first rounder...
Well, that was a nice theory.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 15, 2009 10:10 PM PST up reply actions 0 recs
Anyone hear anything new on Sheets?
I’ve searched just about everywhere for some kind of nugget of info….but to no avail yet.
by mrod on Jan 15, 2009 10:19 PM PST up reply actions 0 recs
Of course in that case
he would not be costing anyone else a draft pick, so it would not guarantee him to come to the A’s.
by RayJEdd on Jan 16, 2009 9:08 AM PST up reply actions 0 recs
So the Dodgers get a Draft Pick for resigning Laffy?
facepalm.jpg
by Zonis on Jan 15, 2009 7:49 PM PST reply actions 0 recs
No...
It says above that to please ignore that several of those players have or will re-sign with their own teams.
He’s in there for illustrative purposes – the size of the contract, and to help visualize the quality players available and the descending order of contract size and compensation.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 15, 2009 7:59 PM PST up reply actions 0 recs
Interesting idea
I definitely like it more than the current system, but I don’t think I would give 3 picks for the top contracts. I like the idea of a sandwich round for FA compensation picks being ranked by contract.
I would give comp picks for FA’s who get more than $10M guaranteed in descending order with the top 5 getting a second pick at the end of the sandwich round.
The one tricky part with ranking FA’s by contract would be whether to rank them by total contract or yearly average. Would a player who gets 3/$20M provide higher compensation than a player who gets 1/$15M?
by DiegoAsFan on Jan 15, 2009 7:59 PM PST reply actions 0 recs
Great Question
In that case I think stats and maybe injury history may be taken into account. Though, you hardly ever find a player sign a one year contract for 15 million unless it was won through arbitration.
by asyouwish33 on Jan 15, 2009 8:26 PM PST up reply actions 0 recs
I see no way the Players Association would want to penalize teams for signing FAs for more money.
I also doubt they’d want to increase the penalty for signing the top FAs.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 12:46 AM PST up reply actions 0 recs
Well, it's actually more by way of rewarding teams for OTHER teams' spending
On the one hand, yes, they’re two sides of the same coin. But the incentive to a team to not sign a player is literally 1/30th of what it would otherwise be if that team was actually surrendering its own draft picks. It’s empirically true that in the current market, Type B free agents aren’t suffering adverse consequences from the fact that their old teams will earn a sandwich pick when they sign. It’s the LOSS of a team’s own pick for a Type A that is really affecting the ability of Type A players to find work.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 8:59 AM PST up reply actions 0 recs
Yes but now the compensation is the same no matter what you sign the FA for. If you penalize
the team more for signing a FA for a higher salary, that isn’t likely to be well received.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:12 AM PST up reply actions 0 recs
It's not greater punishment to a team that signs a higher priced free agent
I don’t know where you’re getting this at all. As NSJ has outlined it, it’s a greater REWARD for a team having a more expensive free agent signed out from under them. There are no punishments at all in his system, except for the very minor and indirect one that it might provide a competing team with some number of draft picks which it could use to compete with you. You, the signing team, do not lose any draft picks.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 10:56 AM PST up reply actions 0 recs
Right. I misunderstood. It's actually an excellent plan.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 4:52 PM PST up reply actions 0 recs
Honest Question:
Wasn’t/Isn’t the point of FA Compensation to help out smaller market teams (or teams with less payroll) to stay competitive by giving them picks when their top players leave? Thus, these low payroll teams aren’t likely to be signing top FA’s for big dollars, and will never get any compensation, and their current homegrown talent that leaves for greener pastures won’t return a high(er) level pick. Of course, if you institute the sandwhich round, the pick can’t fall too low. But I think that the compensation should still be decided by talent. I just don’t know what kind of talent metric one should use.
"I'm on hold for now"- Bobby Crosby
by DyeLongJustice on Jan 15, 2009 8:21 PM PST reply actions 0 recs
I think it should be about the loss
I think the point of compensation is that if a team can’t bring a player back due to financial reason’s they should get some value in return. That’s why I think the compensation should be based on the contract the leaving player receives.
by DiegoAsFan on Jan 15, 2009 9:21 PM PST up reply actions 0 recs
Right it has nothing to do with payroll size. It has to do with compensating a team for losing a player.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 12:47 AM PST up reply actions 0 recs
But that doesn't take into account the teams that refuse to spend money
and continue to take checks from the other teams that do. Tampa was the poster child for this before going to the big show this year. The Marlins always come to mind. They have completely blown up their team twice after winning the WS. Although, they have done that mostly their trading their talent away, as opposed to letting their talent walk.
by mrod on Jan 15, 2009 10:09 PM PST reply actions 0 recs
The Rays still don't spend money and take checks from other teams.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 12:48 AM PST up reply actions 0 recs
Definitely needs to be fixed, but I don't particularly like the notion of having a fixed pool of picks to divide up
Sandwich round is better as is— with the number of picks determined by the nature of the free agent class.
That said, the compensation system needs to be totally overhauled, and I think the idea of using market value to set the compensation for players is a good one. However, you need to be very careful about setting up rules for it so that teams can’t work around it with creative contract structures (like “vesting” options with absurdly low thresholds). The length of the contract, as DAF points out, also needs to be taken into account in some way.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 15, 2009 10:09 PM PST reply actions 0 recs
Interesting take on that. I feel for Toronto this year.
They got screwed with Burnett.
by mrod on Jan 15, 2009 10:21 PM PST reply actions 0 recs
I would be happy
If they just got some better people doing the “rankings” and gave out “Type-A” status to fewer people.
Aaron King is still my homeboy... iffy mechanics and all
by baetown415 on Jan 15, 2009 11:54 PM PST reply actions 0 recs
I'd be OK with just giving the Brewers, Jays and Angels picks in the Yankee 1st round slot
I’m not sure why they have to drop all the way to the next round. They could then just remove the Yankees 2nd and 3rd round picks completely.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 12:49 AM PST reply actions 0 recs
but then you'd be penalizing the teams in the first round who pick after the Yankees,
by bumping each of them down three slots.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 3:46 AM PST up reply actions 0 recs
Lesser evil
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 5:53 AM PST up reply actions 0 recs
How about making it so that if you sign more than 2 Type A players you give up your first round picks
and the team losing the player still gets sandwich round picks?
by A'sfaninNC on Jan 16, 2009 9:57 AM PST up reply actions 0 recs
Isn't that how it is now?
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 10:10 AM PST up reply actions 0 recs
Make it a footlong
What I was thinking was that the Jays could at least get a second sandwich pick instead of the Yankees 3rd rounder which NY would still forfeit.
by Larry E on Jan 16, 2009 3:19 PM PST up reply actions 0 recs
I'm thinking
maybe they can just take the yanks 1st round pick in the ’10 draft, and then the ’11 draft. still compensates the team that lost its type A player. Its is kinda what the NBA does with protected draft picks.
"Sports don't build character, they reveal it." -Damon Bruce
by tmt85 on Jan 17, 2009 2:06 AM PST up reply actions 0 recs
cept that would be a neverending cycle
the yankees might sign a type a every year
"True fact: In a global thermonuclear war, the only human who would survive would be David Eckstein" -PT
by travdog6 on Jan 17, 2009 2:17 AM PST up reply actions 0 recs
I agree with fewer Type A's
and a better system than Elias uses.
Maybe they could go to a 3-tier system where the elite players get Type-A status, where the team that signs them does lose a 1st-rounder. Type-B, they’d lose a 2nd-rounder, and type-C, they would not lose a pick. In all those, the team that loses the player gets a sandwich pick (A – first round sandwich, B and C, second-round sandwich).
"To me, boxing is like a ballet, except there's no music, no choreography, and the dancers hit each other." - Jack Handey
by JJ on Jan 16, 2009 5:58 AM PST reply actions 0 recs
I think that the A's should be the only team to get a draft pick for FA signings.
Also, the A’s should get a draft pick for every FA signed. So when the Dodgers signed Furcal (resigned) then the A’s get theirs. When the Yankees signed their 3 tops FAs the A’s get three top picks from the Yankees.
Or to be a bit more realistic how about if the teams get a sandwich pick for type A FA’s after the first round. Then they get a sandwich pick between the 2nd and 3rd rounds for a type B.
"Whether you think you can, or you think you can't, either way, YOU'RE RIGHT !"
by Eastbayjim on Jan 16, 2009 6:09 AM PST reply actions 0 recs
{gorillas in ill-fitting suits knock on NSJ's door}
We needs to talk wit youse about extending da brand.
my internet search says i have nothing to worry about unless i have problems breathing, or bleed when i use the toilet @('.')@
by monkeyball on Jan 16, 2009 10:27 AM PST reply actions 0 recs
I like the idea of the market dictating the compensation
There’s some tweaking to do, but I think this is a really solid plan. I particularly like the way it allows the compensation to be set based on the relative strength of a FA class. If the class isn’t very strong there won’t be very many large contracts and hence fewer compensation picks whereas a strong class will have more large contracts and more picks. I think this is a lot better than the current system where the relative strength of a FA class is basically irrelevant.
A couple of thoughts:
- Leave the compensation round a variable length as it is currently. The new method of distributing picks will still work with a variable length round, just keep adding picks to it until all qualified free agent deals are compensated.
- To address the issue of different length contracts, rank the players first based upon average annual value and in cases where multiple contracts are within, say, $3 million dollars of each other, do a secondary ranking based upon total contract value. In this case, Teixeira would still be ranked ahead of Sabathia because although his average annual value is slightly less($22.5 mil to $23 mil), it falls within that $3 million range so those two contracts get grouped together and then ranked again by total value which ranks Teixeira higher. The $3 million range is completely arbitrary and can be decided upon some better way, maybe by using the standard deviation (or half a standard deviation) of all free agent contracts for that year.
- One possible way to build in protection against teams trying to get around the system with easy-to-accomplish vesting option years would be to include the value of the option years in the total value of the contract (for purposes of the secondary ranking), but not in the average annual value (for purposes of the primary ranking).
- The bottom of the compensation round could be set based upon the value of a second round pick. I’m sure somebody somewhere has figured out what a second round pick is worth and the compensation round could be set so that every FA deal with an average annual value greater than the value of a second round pick grants compensation to the team losing the player.
by JLeverenz on Jan 16, 2009 11:06 AM PST reply actions 0 recs
I want teams to be punished for signing FA's
Allowing a team like the Yankees to dominate the FA market AND have unlimited access to international FA’s AND be able to have a full draft creates the potential for them to overwhelm the majority of teams through sheer financial willpower. Signing the next Sabs or Tex on the FA market should cost a team a draft pick.
I like the idea of multiple pick compensation and from that suggest that when a team signs more than one premier FA it loses the corresponding draft picks and to avoid anyone getting Toronto’d having a tiered system of assigning supplemental picks. If a team receives a 1st round pick as compensation for losing a FA they get 1 sup pick, much like the current system. If a team is forced to accept a 2nd round pick they get 2 sup picks; 3rd round pick leads to 3 sup picks and so on as necessary. I’d also make it so only the Top 10 picks in the 1st round are protected.
What I’m not clear on is what you propose to do about teams having to offer arbitration prior to receiving compensation. Care to explain?
The monster at the end of this blog.
by grover on Jan 16, 2009 11:39 AM PST reply actions 0 recs
The problem there is twofold
First: the punishment isn’t nearly large enough to act as an actual deterrent, and
Second: the system actually favors signing multiple free agents, as you can only lose your first-round pick once. The teams that get hurt the worst are the ones who are making one big-ticket (or even worse, a Loaiza-like medium-ticket) investment.
If you really want to punish teams for signing excessive numbers of free agents, the way to do that is through a salary cap or a pay-through-the-nose luxury tax. Taking away draft picks is not a viable strategy for deterring large-market teams from signing free agents. It IS a viable strategy for deterring small-market teams, which is a real problem.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 12:51 PM PST up reply actions 1 recs
I'm not looking for a deterrent
I want teams looking to buy a top end FA to make a choice between investing heavy in the vet and going after the top amateur talent.
As to your second point, that’s partially why I want to protect the Top 10 picks.
The monster at the end of this blog.
by grover on Jan 16, 2009 1:05 PM PST up reply actions 0 recs
Only half in jest
If a team signs a second type A free agent then everyone else in their division gets a sandwich pick!
by Larry E on Jan 16, 2009 3:26 PM PST up reply actions 0 recs
Small-market teams in the top 10 picks will never be able to sign any reputable free agents
Protecting the first N picks actually differentially benefits large-market teams (it’s regressive). The Cubs can sign 6 free agents, overpay to get them to come to a bad team, and buy their way out of the doldrums in one offseason. The Pirates? Not so much.
Players prefer to play for contenders. The combined handicaps of being small-market and being in the bottom 10 already pretty much rule those teams out as competitive free-agent bidders.
Personally, I’d rather see extensive revenue sharing and free agent compensation eliminated completely, but I’m aware that a cap is pretty much a political non-starter. Given that, I’d at least like to move to a system where the small-market teams aren’t made WORSE off by it (as they arguably are under the present system).
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 3:38 PM PST up reply actions 0 recs
I hadn't thought about this. I like your idea.
I’d rather see four teams in the NY market before increasing revenue sharing though. I’m not sure I like that a team like Seattle has to pay revenue sharing for getting high revenues in a mid sized market, while Oakland or Miami receives revenues for getting small revenues in a market of at least the same size. You’re penalizing teams for being good at providing a strong fan experience and rewarding the Lorias and inelastics. I’d be much more in favor of revenue sharing based on marke size than on revenues.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 4:58 PM PST up reply actions 0 recs
I think there are ways of tailoring revenue sharing to get around the problem of deadbeat owners
In particular, I’m thinking that in a system where every team essentially has similar amounts to spend on player personnel, the overage is necessarily profitability. If you make $500 million a season and can only spend 100 of it, well, it’s a nice bottom line.
There still might be a need to tax the profits of the teams in the best locations so that the payroll range can give players an appropriate slice of the pie, but I don’t think the tax would need to be any more extensive than it is now, and it might be less so.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 5:53 PM PST up reply actions 0 recs
Derek Zumsteg has written something about this for BP
I believe it’s actually titled, “The Zumsteg Plan”. Good reading.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 7:05 PM PST up reply actions 0 recs
I can't see the MLBPA liking a plan that limits spending. Sounds like a salary cap.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:25 PM PST up reply actions 0 recs
I'm sure they wouldn't LIKE it... but there has to be some other kind of concession they could get in return
Raised minimum salaries, guaranteed percentage of income going to the players, or something like that.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 9:27 PM PST up reply actions 0 recs
A salary cap has just been put on the agenda
for next owners meeting, IIRC. So it’s at least in everyone’s minds; whether or not it becomes a real talking point in the next CBA negotiations, I don’t know.
I like Cindi. A. She never pretends to know more than she does. B. She has unbridled enthusiasm for her "Hotties," and isn't afraid to show it. -IM4Oakgal
by Nico on Jan 16, 2009 9:29 PM PST up reply actions 0 recs
Them's strikin' words.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:31 PM PST up reply actions 0 recs
I doubt the owners would go for guaranteed minimum percentage of income
going to players, unless it only included current income sources, and not future ones like overseas revenues. They could also create new sources of revenues like PSLs or something to screw the MLBPA. Opens a can of worms.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:31 PM PST up reply actions 0 recs
So each side has something it wants and the other side won't go for?
The negotiation analyst in me sees that as an opportunity, not a problem.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 9:32 PM PST up reply actions 0 recs
The trouble is that both sides seem pretty profitable under the status quo.
It’s only a few stingy owners that see the economic troubles as an opportunity to capitalize on the “players are greedy” mantra.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:44 PM PST up reply actions 0 recs
I think comparing Seattle, Oakland, and Florida in this case is really, really flawed
Because of the circumstances that surround each team, the demographics of the market, etc. Even if Seattle and Miami had the exact same number of people who liked baseball, to expect the Marlins to make the same amount of money as Seattle would be silly.
And Oakland might play in a large market but they ARE NOT A LARGE MARKET TEAM. The Giants are. The A’s are the second team. People don’t just routinely switch the team they root for, so the A’s really aren’t trying to get all the baseball-liking folks from the Bay Area. they’re trying to get the baseball-liking folks who also happen to not like the Giants. That’s not a terribly large market.
by thejd44 on Jan 18, 2009 10:28 AM PST up reply actions 0 recs
Hmmmm. I dunno.
I think you’re giving the A’s a pass on something that they shouldn’t be given so much slack on.
The team is situated in a perfectly large market, and if they’re competing with the Giants for market share then… they need to compete more effectively and win more of the market share, in my opinion. And I think plenty of us that are fans of the team believe the A’s are capable of doing so, and can recall times in the past when the A’s were the most watched and talked-about team in the Bay Area at large… it’s pretty much a combination of having a winning team and marketing it properly, wouldn’t you say?
And having a new stadium wouldn’t hurt, which last I checked the team is working on… so they obviously believe there’s more of a market for them to tap in the Bay Area or they wouldn’t be trying to do that here because the “inelastic demand” wouldn’t be sufficiently increased with a new stadium to justify the expenditure, would it?
by still bills kingdom on Jan 18, 2009 10:59 AM PST up reply actions 0 recs
Why is it silly to expect the Marlins to be as successful as the Mariners if their market
is roughly the same size — GMP is population times per capita income — and they play in a market where amateur baseball is wildly popular? What makes the Florida demographic worse for baseball than the Washington demographic if the income levels are almost the same?
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 18, 2009 4:13 PM PST up reply actions 0 recs
Demographics and population are only part of the equasion...
…popularity of a particular sport are important factors as well. St Louis bears this out, IMHO. Certainly not the largest or well-to-do city/area, but they are very devoted and supportive of their team. Much more so than some larger and wealthier cities.
"If I've got baggage, he's got a whole set of Louis Vuitton." ~ Milton Bradley on Barry Bonds
by UncleLeo on Jan 19, 2009 9:57 AM PST up reply actions 0 recs
I rec'd that Paul
Excellent, clear and concise explanation.
I failed to mention this in my piece, but just as you said, the deterrent on FA splurges is the lux tax. Plain and simple. If you want to make it stronger tax – a dollar-for-dollar one, like the NBAs, rather than the 40% the Yankees are currently paying – that’s how you curb their spending.
The Yankees’ spending couldn’t possibly be curbed through draft pick compensation rules.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 2:00 PM PST up reply actions 0 recs
Of course then Selig just gets a bigger slush fund.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 4:59 PM PST up reply actions 0 recs
response to grover, re offering arbitration prior to receiving compensation
It’s not necessary to even have free agent arbitration in the proposed system.
Let’s take Varitek as a hypothetical. The Red Sox, Varitek, and Boras enter the off-season not exactly knowing what his market value will be.
If he gets a two-year, 12 million dollar contract from the Orioles, the Red Sox end up with the #59 or #60 overall pick in the ’09 draft as compensation.
If the market is bad and he’s forced to take a one year, $5.5MM deal from the Tigers, the Sox don’t get any compensation. It isn’t an expensive enough contract for him to be in the elite group of players who will garner compensation for their previous teams.
If the Red Sox re-sign him, no picks are exchanged.
The beauty of it is that it doesn’t require an accurate prediction of the market or of the player’s market value. And it doesn’t require any FA arbitration to even be offered.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 2:09 PM PST up reply actions 0 recs
This is pretty good.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 5:00 PM PST up reply actions 0 recs
I agree with this assessment
The current system is nice in the fact that it dictates a philosophical mantra for an oraganization. Is the money spent on veteran FA’s or drafting young talent more important? The idea of a dollar for dollar luxury cap penalty is a slippery slope away from becoming a salary cap. I don’t like the luxury tax to begin with, it penalizes owners for being willing to invest in their own product. We would be singing a different tune if we were Mets fans, and not A’s fans. What is stopping Lew Wolff from spending more money?
by deathby9 on Jan 16, 2009 2:49 PM PST up reply actions 0 recs
Um, the fact that spending it wouldn't be profitable?
Most people who have made large amounts of money have it because they like having large amounts of money, which in turn means that they don’t like doing things that cause them to have LESS money. (As far as I can tell, most fortune-squanderers are the products of inherited wealth. Or else poker players.)
I’m somewhat mystified by arguments that go along the lines of “Wolff/Pohlad/Loria/whoever has lots of money, he should spend it!” These guys enjoy the process of gaining (I’m not going to say “earning,” since they basically aren’t doing that) money. Owning a sports team is a game to many owners, and they play to win (ie turn a profit) even though they don’t exactly HAVE to.
I’m not sure why you don’t consider losing draft picks as “punishing owners from being willing to invest in their own product,” but regardless, you’re wrong. That’s exactly what it’s doing. The only difference is that the team’s fans pay the tax, instead of the ownership.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 3:46 PM PST up reply actions 0 recs
CNOTM
fortune-squanderers
my internet search says i have nothing to worry about unless i have problems breathing, or bleed when i use the toilet @('.')@
by monkeyball on Jan 16, 2009 4:03 PM PST up reply actions 0 recs
CN?
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 5:54 PM PST up reply actions 0 recs
compound noun
my internet search says i have nothing to worry about unless i have problems breathing, or bleed when i use the toilet @('.')@
by monkeyball on Jan 16, 2009 6:02 PM PST up reply actions 0 recs
Your overall point is good, but I think Wolff would make more money if he invested in the
product more and better. So would Loria. Pohlad is dead, but the Twins would be a more valuable franchise if they boosted their regional network the way the Cardinals do.
These owners perceive short-term P/L as the same as long-term profit maximization, which the Yankees, Red Sox, Mariners, Braves, Rangers, Astros, Cardinals, Giants, Angels, and Indians have proven to be wrong. The Rays have recently learned how to run an organization since Sternberg and Friedman took over.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 5:04 PM PST up reply actions 0 recs
I doubt that, actually
I suspect the Marlins of the Loria era are one of the 2-3 most profitable franchises in baseball. They’re turning $70 million a year or so— how many teams can say that?
It’s a loophole, sure, but it’s a pretty damn profitable loophole.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 5:58 PM PST up reply actions 0 recs
That is pretty good. What's the source for that number?
How does it compare to Seattle or Atlanta?
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:26 PM PST up reply actions 0 recs
The source for that number is Paul's Intuitions Press
Assuming they get maybe $20M from actual ticket sales, they still have a huge pile of MLB.com and revenue sharing money which they don’t ever spend. I’m comfortable estimating that at at least $70M a season. Since their payroll is only ever around $20M… I mean, all that extra money has to go somewhere.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 9:31 PM PST up reply actions 0 recs
OK, but I've got an idea that's lower than for other teams in similar sized markets.
Here are the franchise values for Seattle, Atlanta and Florida from Cot’s:
Marlins : $256M
Mariners : $466M
Braves : $497M
Assuming Forbes uses a stabilized earnings stream and an earnings multiple to derive these values, I’m inferring that the Marlin profits are much less than the Mariner and Brave profits.
Part of the Mariner and Brave values may be in the stadia, but we’ll see just how much after the Marlins build their stadium and the teams are appraised again.
You’d think Florida is a prime market for a regional sports network like the Braves have too. I can’t believe that Loria’s maximizing his broadcast and merchandising revenues with his tactics.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:41 PM PST up reply actions 0 recs
The franchise value is not going to include all the money that Loria's already socked away from it though
Maybe there’s no efficient way he could have spent the $400M or so that he appears to have pocketed, but if that’s the case it’s just more grist for the mill.
Assuming you actually credit the Marlins with the income they’ve received, suddenly they’re the more valuable franchise. Not even including the stadiums, which have a great deal of value.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 10:08 PM PST up reply actions 0 recs
Marlins' operating income was $35.6M in 2007, 2nd in MLB behind Nats
But their franchise value still lagged way behind other mid-sized markets, and was 30th in MLB behind even the small market Pirates, Royals, Cardinals and Brewers. If the Marlins are just taking the money and keeping it in their bank account then it should be accretive to their value. If Loria’s putting it in his own bank account, e.g. by paying himself a massive salary, then I doubt the other owners would go for that very long.
As you can see from this table, short term operating income has very little to do with franchise value….and franchise value is where the big bucks are. Baseball teams are a growth stock, not a utility.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 10:39 PM PST up reply actions 0 recs
If Loria’s putting it in his own bank account, e.g. by paying himself a massive salary, then I doubt the other owners would go for that very long.
I believe this is what he’s doing.
As for why he’s allowed to get away with it, I think the other 29 owners (especially the rich, revenue-sharing ones) don’t mind subsidizing an independent farm team, given their front office’s player development track record.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 11:16 PM PST up reply actions 0 recs
I have a very hard time buying this. Owners are too money minded
to want to pay Loria $50M per year to sit on his ass.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 1:03 AM PST up reply actions 0 recs
It's illuminating to compare the Mariners and Marlin individual stats:
Sport — $147M
Market — 65M
Stadium — 26M
Brand Management — 18M
Total — $256M
Sport — $93M
Market — 193
Stadium — 124
Brand Management — 56
Total — $466M
Sport is defined as “Portion of franchise’s value attributable to revenue shared among all teams.” So Revenue Sharing gives the Marlins a $50M headstart on the Mariners.
The Mariner stadium is worth $100M more.
Forbes thinks the Marlins are in a market 1/3 the size of Seattle, but I don’t agree. They appear to be only counting the Miami Metro area and not all of South Florida. Florida as a state is a much larger economy than Washington State. As a St Louisan I know that a team can draw from a far wider area than just its Metro Area.
Note the Brand Management number which says that Loria’s stingy ways are costing the Marlins about $40M relative to the Mariners….less than I thought, but not nothing.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 10:55 PM PST up reply actions 0 recs
This is a bit old -- 2001 -- but if you add up Miami, Ft Lauderdale and
West Palm Beach, you get $162B as the GMP of the minimum area from which the Marlins can draw, compared to $145B for Seattle.
Seattle’s done a lot better since 2001 than Florida, and has the better corporate presence, but it’s not three times as big of a market.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 11:02 PM PST up reply actions 0 recs
Upon further reading, it looks like they include the value of the team's
broadcast contract in “Market”, since St Louis and Philadelphia and Seattle all have similar numbers there. Also the Cubs have a $100M larger “Market” than do the White Sox.
I bet the Marlins number goes up if/when they get a better broadcasting contract. I’d have put that under Brand Management personally.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 12:31 AM PST up reply actions 0 recs
I'm confused as to why you just assume implicitly that they can get a better broadcast contract if they want to
Conventional theory would suggest that they have the contract that the stations are willing to give them. Charge what the market will bear, etc etc etc.
Maybe their broadcast contract really is acknowledged as an albatross that they can’t wait to get out of, but I’m not ready to make that judgment without any evidence on the issue.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 17, 2009 12:39 AM PST up reply actions 0 recs
I though the thesis was
that the Marlins could do a better (aka less suicidal) job of brand promotion that could/would increase the broadcast market value.
The things that strike me about the Mariners and Braves are Japan and TBS respectively, and those seem to be the kinds of angles that Loria isn’t willing or able to play.
Also, since the franchise pool is a classic SSS, I’m guessing it’s hard to generalize owners’ strategies and constraints.
by green star oakland on Jan 17, 2009 12:49 AM PST up reply actions 0 recs
Yes, I submit that Loria's anti-marketing efforts reduce
interest in the team, and that affects the broadcast contract. I don’t see why a market with a similar GMP as Seattle and a longer history of interest in baseball, especially at the amateur levels, should be necessarily doomed to a broadcast contract a fraction the size of the Mariners.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 12:52 AM PST up reply actions 0 recs
I don’t consider losing a draft pick punishment because the team that is losing the pick generally is compensated by the fact that they got a surer bet, with more immediate value . If you want to look at it this way, the Yankees drafted “Tex” with the compensatory pick given to the Angels. I would rather have “Tex” (A proven commodity) than a draft pick with a smaller chance at success. Doesn’t the current system reward both the have and have not in this way?
by deathby9 on Jan 16, 2009 5:44 PM PST up reply actions 0 recs
You could also
Remove draft pick compensation based on the team that lost the free agent’s payroll, or if the player they lost has been “judged” to have been replaced via free agency (of course this would create a highly unstable judging situation that everyone would bitch about). Say if Giambi was a Type A this offseason. The Yankees sign Teixeira, someone else’s Type A, giving up their first round pick. Giambi signs with the A’s. The Yankees get the A’s first round pick. In this scenario, the Yankees have essentially nullified the draft pick compensation they were supposed to have paid (they lose one to the Angels and get one from the A’s) and get the better player to boot.
To me, a team that’s able to sign a $160m replacement shouldn’t be getting compensation for losing their guy. Especially when the designation system is so weird – a system where anyone can sign Adam Dunn and pay no compensation but no one will touch Juan Cruz isn’t working as it should.
For a look back at weird old systems, once upon a time in the NHL if you signed a free agent the league would award the other team a player of “equivalent” value from your organization. Free agent signings essentially became trades mandated by the front office where neither side knew what they were going to give/get in return. It lead to all sorts of weirdness that had major ramifications down the road, like the Scott Stevens – Brendan Shanahan swap. But in 2009 it’s not wildly dissimilar where a guy like Juan Cruz is getting completely screwed (in that nobody will sign him whereas they otherwise would) because he comes with a compensation cost. He’s essentially tied to the DBacks because they’re the only team that doesn’t have to give up a pick to sign him. In the endgame, they could even end up offering him a cut-rate contract well below his market value and he more or less has to take it because otherwise he’s not getting an ML contract in 2009.
by jdr on Jan 16, 2009 12:40 PM PST reply actions 0 recs
How about...
…actual free agency? Contract is up, player is free to sign with any other team, including their present team, at any mutually negotiated price. No restrictions, no offering arbitration games. None of that crap. Contract’s up —→ player’s a free agent.
"If I've got baggage, he's got a whole set of Louis Vuitton." ~ Milton Bradley on Barry Bonds
by UncleLeo on Jan 16, 2009 12:54 PM PST reply actions 0 recs
Yep
I didn’t really articulate that, but my plan doesn’t require a team to offer arbitration in order to get compensation.
There is no free agent arbitration whatsover in my plan. If a team’s free agent ends up being in high demand, and garners an appropriate salary (10MM or more), they’ll be compensated.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 2:03 PM PST up reply actions 0 recs
I think I like
The response option on the poll more than anything else.
“They can have any color they want, as long as it is black.”
http://sonicliving.com
by whaxed on Jan 16, 2009 1:57 PM PST reply actions 0 recs
Right now it's unanimous
218 to 0, in favor.
I rest my case.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 3:27 PM PST up reply actions 0 recs
On another board I used to do the same thing...
…Are cats evil?
LOL
"If I've got baggage, he's got a whole set of Louis Vuitton." ~ Milton Bradley on Barry Bonds
by UncleLeo on Jan 16, 2009 5:19 PM PST up reply actions 0 recs
Not sure. But they're delicious!
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:27 PM PST up reply actions 0 recs
Am I understanding this right?
In your system Brewers are going to get three picks in a row from 34 to 36? That seems weird to me.
Admittedly, I can’t come up with any good reason why a team shouldn’t get three consecutive picks, but it just seems wrong for draft picks not to alternate between teams.
"Dispatch knuckleheadedness with Bond-like aplomb." –74mk
by iglew on Jan 16, 2009 2:10 PM PST reply actions 0 recs
Yes, that is the way it's written, but I agree that your idea is better.
Tango suggested that a better approach would be, for example, to give the Brewers the #31, #41, and #51 overall to compensate for Sabathia.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 16, 2009 3:26 PM PST up reply actions 0 recs
I didn't realize I had offered up any idea,
but I’m glad you like “my idea”!
"Dispatch knuckleheadedness with Bond-like aplomb." –74mk
by iglew on Jan 17, 2009 3:44 AM PST up reply actions 0 recs
Possibility: use a proportional system (like voting)
1. Take the total value (TV) of the yearly average of all the free agent contracts, then divide by the number of compensation picks (30 in nsj’s scheme, so that would be TV/30).
2. Teams get a pick if the free agent they lost signed a contract with a yearly average greater than TV/30. The picks are in order of size of yearly average of contract.
3. Subtract TV/30 from the yearly average of the free agent contracts.
4. If there are still free agents with contracts with yearly average greater than TV/30, the teams that lost those free agents get additional picks. If there are still picks left after this, repeat step 3.
5. If there are picks remaining but no contract greater than TV/30, teams whose lost free agents have the highest remainder get the remaining picks.
There are variations you could introduce (e.g. substitute present value of multiyear contracts), but this would calibrate the number of picks and the order of picks to something semi-objective.
by Deep Puddle on Jan 17, 2009 9:14 AM PST up reply actions 0 recs
A better solution
would be to allow teams to trade draft picks while simultaneously eliminating draft pick compensation. The compensation system is pretty silly, as is the rule preventing teams from trading picks.
by jsullivan on Jan 16, 2009 4:52 PM PST reply actions 0 recs
Ok
Why?
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 16, 2009 5:59 PM PST up reply actions 0 recs
i actually like the idea of being able to trade draft picks
that way the #1 overall pick wouldnt be a curse for some teams who don’t have the cash to sign their first rounder
"True fact: In a global thermonuclear war, the only human who would survive would be David Eckstein" -PT
by travdog6 on Jan 16, 2009 6:22 PM PST up reply actions 0 recs
How do you not have the cash if you get revenue sharing?
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:27 PM PST up reply actions 0 recs
ill rephrase
some teams might not want to sign a first pick guy for that much money. i dont think teams should be required to spend the money and have no way out
"True fact: In a global thermonuclear war, the only human who would survive would be David Eckstein" -PT
by travdog6 on Jan 17, 2009 12:07 AM PST up reply actions 0 recs
I guess it's better than Daniel Moskos.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 12:28 AM PST up reply actions 0 recs
I agree wholeheartedly
I think that if slotting of draft picks (NBA style) is ever bargained in to the CBA, that trading of draft picks (first-round picks at least) should come in to play also.
I don’t like forcing a team to give a player a $10MM signing bonus if they think they can get better value later on in the draft. Especially in baseball, where the bust rate of a top-5 pick is probably higher than that of the NBA.
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 17, 2009 1:02 PM PST up reply actions 0 recs
Wow, "yes" is winning in the poll
Interesting.
I like Cindi. A. She never pretends to know more than she does. B. She has unbridled enthusiasm for her "Hotties," and isn't afraid to show it. -IM4Oakgal
by Nico on Jan 16, 2009 4:57 PM PST reply actions 0 recs
I'm of the opinion that...
Let the free market dictate free agent compensation.
…FA compensation is anything but free market. The idea of a team offering a lowball contract to a player whose contract just ended, knowing full well that he’ll reject it, simply to get compesatory draft picks from that player’s next team is an obstacle to a truly free market.
In a truly free market [that is, post player-control, post arbitration eligible years] if the previous team does not make a competitive offer for the player’s services, the previous team get jack. The only thing they get is a freed up roster spot for not ponying up the money to retain the player.
If the larger market teams would benefit from this [this: the absence of FA comp picks] then perhaps the questions that should be asked are why those teams are big market teams to begin with and why the owners have a bigger purses. Life isn’t equitable and niether are some businesses in relation to others…but fairness does exist; it’s just that many do not like the outcomes when the rules aren’t rigged to favor those with less resources.
by LowcountryJoe on Jan 16, 2009 7:21 PM PST reply actions 0 recs
Not to mention
that the big market owners had to pay $500 million to buy their team, while the small market owner only had to pony up $150 million. I completely agree with all free market senarios. Any owner that wants can make an offer that the steinbrenner’s cannot refuse and then they can own a big market team.
Of course the real problem is that the entire industry is a monopoly. In a true free market, if there are excess profits then new companies (teams) enter the market. If there are insufficient profits, then teams close up and leave the market. Likewise labor (players) would be free to flow to any team or even other industries (go play soccer), if there are better opportunities.
However, in the case of major league sports, a decent case can be made that a monopoly is the preferable way to go. I don’t buy it, but at least a case can be made for it.
by RayJEdd on Jan 17, 2009 9:41 AM PST up reply actions 0 recs
I don't buy that at all. Baseball fans in New York have to choose between the Yankees and the
Mets — battling 18 million others for the privilege to watch either, not to mention publicly subsidizing their stadia. Many Yankee season ticket holders have now been priced out of the new stadium — which they’ve supported through their allegiance over the years and their tax dollars — by corporates. All-Star Game tickets are over $700 each for mid-tier seats — for season ticket holders.
By limiting the number of entrants into the New York market MLB has kicked some of its best customers in the teeth. New York should have at least four, if not five teams, not just so that the Yankees and Mets don’t have an unfair advantage over mid-market teams, but also so that the fans of New York are actually served like they deserve to be. I can easily see new teams in Brooklyn, Newark, and possibly at a 10th Ave or Upper Manhattan location.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 9:59 AM PST up reply actions 0 recs
are you disagreeing with me?
Because I agree completely. In a free market a new team will open where ever there are excess profits. So would I open a new team in Vegas where there are 1 million people and 0 teams or in NYC where there are 18 million people and 2 teams. I think I would take my 1/3 of NYC any day.
by RayJEdd on Jan 17, 2009 10:06 AM PST up reply actions 0 recs
No. I'm disagreeing with the thesis that a monopoly is the preferable way to go.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 10:14 AM PST up reply actions 0 recs
Ahh, Ray knows his Economics!
That in the long-term, and ignoring short-term moves to the equilibrium, economic profits are always zero: other market entrants come and go depending on market conditions.
Hope that didn’t sound condescending because it wasn’t meant to. It’s refeshing read this.
by LowcountryJoe on Jan 17, 2009 5:03 PM PST up reply actions 0 recs
Uh, that axiom only applies in certain market conditions
that essentially never exist in the real world.
It’s certainly NOT true of monopolies.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 18, 2009 3:16 AM PST up reply actions 0 recs
Uh...
Uh, that axiom only applies in certain market conditions that essentially never exist in the real world.
Never? In the real world? So, all individuals, seeing that there are economic profits to be made somewhere in an economy say, “ah, no thanks.”? And as market conditions cause an industry in an economy to have decreases on the demand side, market all particpants in that industry say “I think I’ll hold on and lose my pants, too, now that I’ve already lost my shirt.”? No one in that position ever says, “Gee, maybe I should find something else to do”?
It’s certainly NOT true of monopolies.
I realized that when I responded to this:
Of course the real problem is that the entire industry is a monopoly. In a true free market, if there are excess profits then new companies (teams) enter the market. If there are insufficient profits, then teams close up and leave the market. Likewise labor (players) would be free to flow to any team or even other industries (go play soccer), if there are better opportunities.
But, of course, monopolies will cease to be monopolies if they cannot maintain economic profits (i.e. the decrease in the demand for their products or services cause economic losses). And, if the barriers to entry in a monopolistic industry were to lower enough to allow for new entrant(s) to make an economic profit, that industry would cease to be a monopoly. Barriers can be financial hurdles with significant/prohibitively costly infrastructure needed to start-up (natural monopoly) or a government imposed monolpoly in which the central-planning types keep a monopoly in place for various reasons that may or may not make sense.
by LowcountryJoe on Jan 18, 2009 9:11 AM PST up reply actions 0 recs
In modern America,
virtually all important product markets are oligopolies or monopolies. About the only purchases I can think of that I routinely make from non-oligopolistic businesses are restaurant meals (and even there, you have enormous conglomerates controlling large parts of the market, eg McDonalds).
I actually believe that the vast majority of industries are natural monopolies, especially in this day and age, or at least can potentially become natural monopolies in an environment of minimal regulation. I will cheerfully admit that this is a radical viewpoint.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 18, 2009 4:09 PM PST up reply actions 0 recs
It's an interesting perspective, and sort of valid in the short run, say five years,
until a competing business based on a superior model can be built from scratch. I’m not sure how valid that makes it overall though.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 18, 2009 4:17 PM PST up reply actions 0 recs
The whole point of a natural monopoly is that it prevents competing businesses from arising
by virtue of overwhelming market position. The opposition is, by definition, producing their goods at higher cost.
Your 2008 Athletics: It's Nothing Personal.
by PaulThomas on Jan 19, 2009 2:06 PM PST up reply actions 0 recs
Arrogance
yes, it is a good idea. but you’re arrogant to not put an open poll up
argument is always a healthy thing
by DubElXero on Jan 16, 2009 8:49 PM PST reply actions 0 recs
Is not.
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 16, 2009 9:28 PM PST up reply actions 0 recs
worst poll ever.
/comicbookguy
still Swish Fan #1.
by ChrisCEIT on Jan 16, 2009 11:20 PM PST reply actions 0 recs
north pole never
/“admiral” peary
by green star oakland on Jan 17, 2009 12:22 AM PST up reply actions 0 recs
adds up to a bald guy in a cheesy sweater?
I like Cindi. A. She never pretends to know more than she does. B. She has unbridled enthusiasm for her "Hotties," and isn't afraid to show it. -IM4Oakgal
by Nico on Jan 17, 2009 11:04 AM PST up reply actions 0 recs
(looks around sheepishly)
It's not the results, it's how you look going about those results -- Tim McCarver
by WaddellCanseco on Jan 17, 2009 5:52 PM PST up reply actions 0 recs
(quickly hides the sheep before Nico comes back)
by JLeverenz on Jan 18, 2009 7:21 AM PST up reply actions 0 recs
Hey, everyo--
Dang.
I like Cindi. A. She never pretends to know more than she does. B. She has unbridled enthusiasm for her "Hotties," and isn't afraid to show it. -IM4Oakgal
by Nico on Jan 18, 2009 8:00 AM PST up reply actions 0 recs
How to game this proposal...
Unfortunately, this one would be easy to game…. we’d see a lot of contracts like this:
1 year, minimum salary guaranteed
Huge bonus for playing 100 games
Multi-year extension kicks in after first 100 games are played…
So basically none of the money would be guaranteed until after the draft.
Perhaps this isn’t allowed today, but this is what people would try to push through based on this approach.
So, I think it has to be based on a better Type-A/B/C system than is there today. That said, I do like the sandwich round idea a lot.
by dylan on Jan 17, 2009 11:51 AM PST reply actions 0 recs
why would a player sign this deal?
If he can sign for $60MM plus or more guaranteed over several years, why would he accept a deal for one year guaranteed with incentives?
One of the great appeals of being an elite FA is earning security.
More to the point, why would teams care about “gaming” the amount of draft picks that he garnered to his previous team? Those picks aren’t coming out of anyone else’s pocket in the proposed plan. The amount of picks a player is worth (1, 2, or 3) doesn’t even affect anyone’s second round pick, because it’s always a set number for the entire free agent class – 30 (the sandwich round).
Batting 4th for the 2014 San Jose A's: 26-year-old RF Justin Upton, in the 1st season of a nine year, $250M deal.
by notsellingjeans on Jan 17, 2009 1:06 PM PST up reply actions 0 recs
I could see the situation where the signing team wouldn't want to give their division rival any help.
Especially if their division rival looks to be the main one they’ll be competing with in the coming years.
by LoneStranger on Jan 19, 2009 8:51 AM PST up reply actions 0 recs
I think this is a good starting point for a new system, especially with the
clarifications you provided in the comments and some of the other ideas that were presented for fine-tuning the allocation of the picks in the sandwich round and draft order for those compensation picks (cascading by value in a draft order, not bunched.)
A couple things for sure- the arbitration process for free agents is a joke and needs to be abolished or seriously reconsidered, and the draft pick compensation system for loss of valuable free agent players due to economic viability is not working.
I like the ideas of eliminating the “penalty” part of the compensation system and of simply awarding compensation picks in a sandwich or supplementary round… I wouldn’t make the supplementary round a specific number of slots, but would make it dependent on the size of the free agent class and all that like others have already suggested here.
I wonder if the “contract value” approach for determining number of compensation picks for a player and draft order in the supplementary round is a viable mechanism… I can see where it would get pretty complicated pretty quickly, and as others have mentioned in the comments here (like dylan, above) it might lead to a wave of bizarre contract structures or something. Plus, values shift over time and it would have to be adjusted to reflect current economics and contract values, sometimes on an annual basis. Maybe some incarnation of Deep Puddle’s formulation earlier in the thread here would work…
But personally I think it would be easier to just recalibrate the Elias rankings for Type A, B, and C players so as to make Type A players a more truly elite grouping, Type B the “average to decent” and largest grouping, and Type C could perhaps be eliminated completely. From there, I would allocate 2 picks for Type A free agents, and 1 pick for Type B free agents… or, if it makes more sense (since there would be few Type A free agents any given year now) to allocate 3 picks for a Type A and 2 picks for a Type B.
The biggest things would be eliminating the useless dance involved with free agent arbitration, and eliminating the uncertainty of draft-pick compensation for clubs losing players while also eliminating the draft-pick penalty for clubs investing in those same players. You do those two things, and fine-tune the Elias system, and I think you’ve done enough without having to completely reinvent the free agent valuation mechanism.
by still bills kingdom on Jan 17, 2009 1:02 PM PST reply actions 0 recs
I like this idea
the libertarian i am gets warm and fuzzy with the “let the open market dictate compensation” part…
"Sometimes Joe (morgan) doesn't like facts to get in the way of his opinions."- billy beane
"That was a great pick...if this was 2002" Me, to guy who selected Barry Zito in a fantasy draft
by harendaman365 on Jan 17, 2009 8:40 PM PST reply actions 0 recs
That's what she said!
She was a celibate economics major. I probably should have mentioned that first.
I like Cindi. A. She never pretends to know more than she does. B. She has unbridled enthusiasm for her "Hotties," and isn't afraid to show it. -IM4Oakgal
by Nico on Jan 17, 2009 8:50 PM PST up reply actions 0 recs
Hmm
never heard that one before
is this how you will plague all my posts from now on? ill try to tailor them so they make more sense then
"Sometimes Joe (morgan) doesn't like facts to get in the way of his opinions."- billy beane
"That was a great pick...if this was 2002" Me, to guy who selected Barry Zito in a fantasy draft
by harendaman365 on Jan 17, 2009 10:21 PM PST up reply actions 0 recs

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