[BA] New CBA Will Bring Sweeping Changes..
http://www.baseballamerica.com/today/draft/news/2012/2612723.html
New CBA Will Bring Sweeping Changes To Talent Acquisition
By J.J. Cooper and Jim Callis
December 20, 2011
Peace has been declared in major league baseball for another five years.
Now teams and players will see if it brings prosperity.
Baseball's new Collective Bargaining Agreement ensures the sport will have
more than 20 years without a single labor stoppage. That's great news for
anyone who remembers the disaster of the canceled World Series in 1994.
But in the initial hours after the new CBA was announced, scouting
directors and other front-office types weren't basking in the glow of a
new deal.
The new CBA will assure the most significant changes since the secondary
drafts were eliminated in 1987. And the initial reaction was quite
negative from many in the industry as scouts (and agents) feared that
restrictive luxury tax rules would make it more difficult to sign top
talent. But as more details have emerged, many teams seem to have come
around to at least some of the changes.
While baseball won't have a hard slotting system present in other
sports—in which every selection in a draft gets a designated, non-
negotiable bonus payment—teams will have specified budgets for drafts and
international signings.
Under the new system, each club will get an aggregate bonus pool for the
first 10 rounds of the draft, based on all of its picks—each of which
will be assigned a value. While clubs will not be required to stick to the
value of each pick, they will be expected to come in under the overall
budget number.
"I think it will make a difference; you're no longer going to be able to
sign players after top rounds," one National League crosschecker said via
text message. "Teams with the philosophy to spend and accept risks no
longer benefit, and it hurts small-market clubs who choose to develop
(their) organization through (the) draft.
"I'm not excited about this . . . More kids will end up in college,
similar to pre-2005. The bar has been set high on payout of high school
players. If a player slips to the third round, the chances of signing him
away from an SEC or ACC school will be very slim now. Hey, at least it
will be fun again to scout Team USA and the Cape (Cod League)."
Under the new rules, teams that exceed the signing budget by up to 5
percent will pay a 75 percent tax on the overage. Teams that go over by 5-
10 percent will pay the same tax and lose a first-round pick in the next
year's draft. Teams that go over by 10-15 percent will pay a 100 percent
tax and lose a first- and second-round pick. And finally, teams that go
over by more than 15 percent will pay the 100 percent tax and lose their
first-round picks in the next two drafts.
Notably, if you don't sign one of your picks in the first 10 rounds, you
can't spend that money on other picks. You lose that allotment from your
signing allowance. Also, any bonus for more than $100,000 for a pick after
the 10th round also counts as part of a team's signing allowance.
International signings will have a similar pool, with similar penalties.
Going over by up to 5 percent kicks in the 75 percent tax; 5-10 percent
includes the same tax and a loss of the right to sign more than one player
for a bonus of more than $500,000. Go over by 10-15 percent and a team
incurs the 100 percent tax and can't sign any player for more than
$500,000. Going over by more than 15 percent draws the 100 percent tax and
prohibition to sign any player for more than $250,000.
"This is an attempt to get back to the point where $500,000 is a lot of
money," an NL scouting director said. "We've pushed this so far that a
seven-figure bonus isn't that much money."
Many scouting directors believe the new rules will place more emphasis on
having good area scouts. While crosscheckers, scouting directors and
general managers have plenty of input into deciding who a team takes in
the early rounds, it's the area scout who has to figure out how much money
it will take to sign a prospective draftee.
Revamped Compensation
In addition to the signing bonus pool, the new CBA also changes free agent
compensation and seeks to award more picks to low-revenue teams.
Starting in 2012, the familiar Type A and Type B free agents, based on the
Elias ranking system, will be eliminated. Now the only free agents subject
to compensation will be those who are offered contracts equal to the
average salary of the 125 highest-paid players in the game as they enter
the free-agent process. Players also have to be with a team for an entire
season to be subject to compensation, so pending free agents who are
traded at midseason will not generate extra picks for the teams that
acquire them.
A team that signs one of those free agents will give up its first-round
pick. Unlike before, when the top 15 overall picks were protected, now
only the top 10 are protected. In those cases, the team will lose its
second-highest selection (not necessarily its second-round pick, as
before).
Baseball will also add a lottery for six extra picks following both the
first and second rounds, which will not take effect until the 2013 draft.
Teams that are in the bottom 10 in revenue and/or market size go into a
pool for six picks after the first round, with odds of winning based on
the prior season's winning percentage. Teams that don't get one of those
picks—and any other team that receives money from revenue sharing—then
goes into another lottery for six picks after the second round. The odds
of winning are based on prior season winning percentage.
Many More Changes
There are plenty of other changes in store for the draft, including:
‧ The signing deadline will move from Aug. 15 to somewhere between July
12-18, depending on the timing of the All-Star Game. This move was a no-
brainer that both sides wanted. So many players waited until the deadline
to sign under the current system—101 came to terms on the final day in
2011—that several of the draft's top talents signed too late to play in
the minors until the following season.
‧ Picks won in the competitive balance lottery can be traded, though no
other picks can be. On the international side, teams can also trade some
of their signing allowance.
‧ Any draft tax collected will be redistributed to teams under MLB's
revenue-sharing plan, and any draft picks surrendered will be awarded in a
lottery weighted by a club's winning percentage and revenues the previous
year. The catch is that any team that goes over its draft cap is
ineligible to receive draft-tax cash or a forfeited draft pick—another
stick to discourage teams from going over the limit.
‧ Draftees are no longer eligible to sign big league deals, as five of
them did in 2011. The main effect of this change is that clubs won't be
able to skirt the draft cap by reducing a player's bonus and making it up
to him with guaranteed major league salaries.
‧ The CBA summary also states: "Top 200 prospects will be subject to a
predraft drug test and will participate in a predraft medical program."
The top 200 prospects already are drug tested, but the medical program is
new.
While it's unclear exactly what form it will take or if and how players
will be compelled to attend, it's a step in the right direction that could
avoid the snafus that led to 2010 first-round picks Barret Loux and Dylan
Covey not signing.
‧ Speaking of Loux, there is now a provision that if a player fails a
physical and the team fails to offer him 40 percent of the assigned value
of his pick, he becomes a free agent. In that case, the club's draft cap
would be reduced by the value of his selection. Loux was declared a free
agent after a similar situation in 2010.
‧ The draft has been reduced from 50 to 40 rounds.
‧ Any attempt to circumvent the draft cap, such as an under-the-table
agreement, is expressly prohibited.
‧ Teams get an extra year of protection for compensation picks for
failure to sign draftees from the first three rounds. For example, the
Blue Jays get the 22nd pick in 2012 after not signing No. 21 overall
choice Tyler Beede in 2011. If Toronto can't come to terms with the
compensation selection, it would get another one in 2013.
Much Still To Do
As significant as these changes are, the union and the owners were still
working to finalize the details. Executives at the Winter Meetings
attended working groups where provisions of the CBA were explained, but
the actual final language of the CBA had yet to be finalized.
While the CBA gives the parameters of the draft changes, the two sides
have to agree to the details, then get lawyers to put them on paper for
the official rules. When it comes to the draft, many of those details have
been hammered out. But on the international side much is still to be done.
The two sides have appointed an international talent committee (members
include union chief Michael Weiner and MLB executive vice president Rob
Manfred as well as three other people from each side) to hammer out
details on a potential international draft, the best age to set as a
signing minimum for international players and many other details. The two
sides will also look at either forming another league or adding MLB-run
clubs to the Dominican Summer League to help unsigned players develop.
The new agreement does not commit baseball to an international draft, but
the language makes it clear that baseball is headed in that direction. The
international talent committee will also look at whether an international
draft should be separate from the June draft and whether Puerto Rico
should be part of an international draft.
The new CBA will require players be registered with MLB to sign out of
Latin American. That has raised complaints from some scouts who fear it
will make it too easy for hidden talent to be discovered by other scouts.
MLB's reasoning for the registration is simple. After seeing numerous
Latin American signees dinged for false identities and birthdates, it is
looking for ways to ensure that the players identities are verified.
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