Paying young players more may break the A’s model for success and that’s OK

For the Oakland A’s, the art of winning an unfair game — as the subtitle to Michael Lewis’ famous book goes — has relied on identifying undervalued assets. Buried in that approach, however, is one assumption most Americans would probably disagree with — not paying people what they are worth. While the game has long moved past the details presented in Moneyball, it remains true that a low-budget team needs to win by paying less for the same, or more, value on the field.

In the 20 years since the publishing of Moneyball, the knowledge gap that allows for identifying undervalued assets has largely disappeared. Many big-market clubs have now embraced analytics and combined that with piles of cash. This has left many low-budget clubs only able to exploit the contractually designed undervalued assets — players still under team control, particularly those that haven’t reached arbitration.

Now that the topic of paying these young players more is taking center stage in the latest labor negotiations, the natural question becomes: What happens to the A’s if they are forced to pay young players more? While I believe this is an admirable goal that is good for both the players and the game broadly, it has the potential to create a problem for the A’s competitive model.

Here, I will run through an example scenario using some of the MLBPA’s latest proposals for increasing the league minimum salary to $775K (from $575K), extending Super Two status to nearly everyone with two years of service time, and creating a fund for performance-based bonuses for pre-arbitration players. The potential impacts of those changes are noted in the table at the bottom of the article.

What is Super Two status? Normally players reach arbitration after three years of service time. But right now, out of all MLB players with two years of service, the 22% who are closest to reaching that third year are called Super Two. They get to begin arbitration a year early, which also means they get to go through the process four times instead of the normal three before hitting free agency. Basically, Super Two is an extra year of getting an arbitration raise tacked onto the player’s early career, replacing a minimum-salary pre-arb3 season.

The biggest impact would come from Sean Murphy, who would suddenly become Super Two this winter. Sean has developed into one of the best all-around catchers in the game. He accumulated approximately 3 WAR last year in only 448 plate appearances (curse you Yan Gomes!). However, that value doesn’t include his potentially elite pitch-framing skills, which could add up to about another win. If he were to be awarded arbitration right now, he’d likely see a large pay bump from the new league minimum of $775K to around $4M-$5M based on Fangraph’s estimates.

The next biggest changes could come from players such as Adam Kolarek and Paul Blackburn, who have now accumulated over 2 years of service time and would become Super Two. They could be in for a small arbitration raise into the $1.2M-$1.4M range.

After those newly arbitration-eligible players, the last changes would come from the ~12 players on league minimum contracts receiving a $200K raise. There’s also the A’s contribution to the new pre-arbitration bonus pool — which for now I will just estimate at $2M, giving a total pool value of $60M.

Cumulatively, these changes would bring the A’s projected payroll up to almost $89M for the upcoming season. This represents an increase of about $9M over current estimates. This may not sound like a lot, but $9M represents the typical budget the A’s have to bring in “undervalued,” roster-filling acquisitions every year. This is the Mike Fiers, Yusmeiro Petit, Mike Minor, Joakim Soria, Brett Anderson, Jed Lowrie budget.

But this may not be the only impact to expect from awarding Super Two status to almost every player. Super Two arbitration salaries tend to be very close to standard first-year arbitration salaries, so over time those players build up to what amounts to an arbitration-4 salary in their final team-controlled year — sometimes nearly double the arbitration-3 salary. This change might not have a heavy impact next year, but it would have ramifications down the line as more and more players hit arb-4 contracts.

One example to highlight how this early arbitration change might impact the A’s is Marcus Semien. In 2019, Semien’s arb-2 year, he made $5.9M, and in 2020 his arb-3 award was $13M. The A’s decided to keep him all the way through his team control years, which was very much justified given his level of performance.

However, what if that was accelerated a year? Semien would have been making $5.9M in 2018, got a raise to about $10M in 2019, and then after his breakout season he could have clocked in around $20M in arb-4 in 2020. What would the A’s have done to cover that additional few million in 2019, and the extra $7M in 2020? Would they have skipped some of the free agents, like $6M for Fiers in 2019 (worth 3.0 bWAR) or more than that for Soria? Or do they regrettably trade Marcus before his breakout? Under a new CBA, the A’s could be put in this situation in 2024-25 with Murphy.

The final deal — whenever it is reached — is likely to represent less change than the MLBPA proposal I’m using as an example here. In fact, while I was writing this the MLBPA has already drastically walked back their Super Two proposal from 75% of players to just 35%, and then they mostly dropped the issue entirely. This came after the owners adamantly objected to any increase from the current 22% and I believe the A’s situation tells us why: most players making arbitration salaries early, and eventually making it to Arb-4 contracts, would end up costing teams a TON of money and jeopardize their ability to compete.

We’re also hearing about the possibility of the A’s regaining revenue sharing money. This is a positive development because, again, any attempt to pay young players a salary more closely aligned with their value will also diminish the ability of low-payroll clubs to compete. Maintaining the competitive balance of the sport should not fall on the backs of young players forced to make less than they are worth. The game overall is hugely profitable. Those profits only need to be shared in a way to both fairly pay young players and maintain the competitive balance of the league.

Paying young players more will simply mean the A’s model will have to evolve into the art of winning a fair game, and that’s a good thing for all of us — especially for young players breaking into the show after dedicating their lives to the sport while subjecting themselves to poverty in the minor leagues.

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See the table below for how these theoretical CBA changes would affect the 2022 A’s payroll.

*New Contract Salary column assumes MLBPA proposal went into effect this year. Players effected by new Super Two rule are bolded across the entire row.

**Accelerated Salary column assumes MLBPA proposal went into effect years ago and gave players such as Olson earlier arbitration eligibility. Players effected are bolded and italicized only in that column.