How CBA affects the Cubs

I've been away from my computer nearly all day and I'm desperately trying to catch up on the rules here, but here's a quick and dirty overview of the new rules and how the new CBA may affect the Cubs.  It's possible, and probably likely, that I'll have to update and/or amend some of this information as we learn more and things become more clear.

Here is an excellent general overview provided by Biz Ball Maury.

Although it's dressed up to look like it's helping small market teams, the new CBA is more beneficial to teams unwilling to invest in the draft and scouting and development.  Teams like the Chicago White Sox, for example.

Meanwhile teams are still allowed to vastly outspend small-market teams just as long as they do so on the major-league payroll.  That luxury tax will remain at $178M this year and then move up in subsequent years. Doesn't make much sense.

Here is a basic rundown of some of the new rules and how it affects the Cubs.  Though there's still much to process before we can be sure, it certainly appears that it won't help the Cubs and more importantly for baseball, teams like the Pirates, Rays and Royals.

Bleed Cubbie Blue had an interesting perspective:

Looking at the Cubs briefly, under this system, Jeff Samardzija and Matt Szczur would be in the NFL right now. Logan Watkins would be playing college football. Ben Wells, Dillon Maples and Shawon Dunston Jr. would be in college. Matt Garza would be playing baseball, but not for the Cubs because we would not have had Hak-Ju Lee to trade for him.

It will also affect the players coming in as their bonuses may be limited.  Some fear that it may cause some athletes to choose football or basketball over baseball.  It will also probably mean that high ceiling high school players will have less incentive to enter the draft and go to college instead.

Tyler Kepner of the New York Times has a more positive spin on several aspects of the new CBA, although he also doesn't believe that the changes in the draft will benefit teams like the Pirates.

Draft Pick Compensation

Rule: There will be no more Type A and Type B free agents

How it affects the Cubs:  It can possibly help, but it will certainly hurt the Cubs.  They had 2 possible type B free agents in Aramis Ramirez and Carlos Pena and if the rule does take effect this season, they will not receive the supplemental round pick they would have received under the last collective bargaining agreement.

Good news? It does open the door for the Cubs to sign a previously rated type A free agent like Kelly Johnson, if they're interested.

Amateur Draft

Rule: Players can only sign minor league contracts.

How it affects the Cubs:  Doesn't really affect the Cubs more than any other team.  It more affects players who are close to ML ready from getting the best deal possible.

Rule:  An aggregated signing bonus will be put in place prior to each draft. Teams that go over will receive a 75% tax on overage. Any team that goes over by 15% or more face the harshest penalty: 100% tax on overage and loss of first-round picks in next two drafts.

  • The range of the Signing Bonus Pool is from $4.5 million-$11.5 million.
  • The more picks a club has, the larger the pool becomes that the club will have to work with.
  • The size of the pools will standardize more from club to club after next year’s class of free agents.
  • The size of the pools will be dependent on the number of picks a club has in a given year and where those picks fall within each round. A club with the first pick of the Draft will have the largest pool.

This sounds awful, and it is -- but  it might not be as bad as you might think.  While it will curb bonuses and it's difficult to know how the pools will play out at this point,  Jim Callis of BA (via twitter) reports the following:

Until we know total of slot pool, it's premature to assume drastic #mlbdraft changes. If slots avg 8m/tm rather than 4.5m/tm ... extrapolating '11 spending vs slot (ht.ly/7CbaA) would have put only #Pirates, #Royals, #Nationals above 5% margin.

In other words, if the slots averaged 8M per team, the Cubs would not have been penalized last season.  Again, without knowing for sure what that slot pool is going to be it's difficult to say without any real certainty.  But it's possible it won't affect the Cubs as much as feared, although it certainly could have changed the approach to several of the Cubs past signees, as was pointed out earlier.

Arbitration Eligibility

Rule: The "Super-Two", players with two-years of service time who will be arbitration eligible, will expand from the top 17% to the top 22% in terms of service time.

How it affects the Cubs:  This rule may directly affect Starlin Castro, who may become arbitration eligible a year earlier than expected.  All the reason to lock him up long term as soon as possible.

Scheduling, Realignment, and Postseason Play

Rule: Postseason play will be expanded to two wild cards in each league by no later than 2013.

How it affects the Cubs:  Quite simply, it gives the Cubs an additional chance of making the playoffs.

Rule: The Houston Astros will move to AL West by no later than 2013.

How it affects the Cubs:  The Cubs have got to get their act together quickly since they won't have the Astros to rely on when it comes to avoiding last place.

The International Signings

There will be a pool for signings where the worst teams will have the highest amount of money to spend.  Any penalty over those amounts will be penalized with a tax.  Teams that don't want to spend this money can
"trade" up to 50% of their allotted pool to another team.

It's difficult to say without knowing the amounts teams will be allowed to spend, but this could have actually helped the Cubs this year as they were one of the worst teams, plus they would have had the freedom to trade for more pool money.

There is much more to go over and process.  In all honesty, it's difficult to tell how much this will affect the Cubs but at first glance, the team most affected seems to be Tampa, a successful yet low revenue team.  It's a shame that baseball would penalize one of the smartest, most innovative teams in the league to level out the playing field for less competently run teams.

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  • I apologize for my laziness. I posted this on another site. I am too lazy to write another version of this. Here goes:

    Reinsdorf is sitting somewhere and popping champagne corks over this. Why should it matter how a team decides their model for building a contending team?

    This hurts teams that depend on a model of drafting and developing players to compete. Just because the White Sox want to overpay for aging and ineffective veterans to compete, the teams use other models to compete shouldn’t be penalized. So if the Pirates want to spend $17 million on their draft class and Reisndorf wants to spend $17 million on Jake Peavy, that should be entirely up to each respective organization.

    John Heyman makes a great point when he said that an overrated draft pick can mean seven or eight million dollars burned, but an overrated free agent acquisition can waste upwards of $125 million. We’re dealing with one right now.

  • In reply to Alex:

    Well said, Alex. Thanks for re-posting here. I'm of the mind that this CBA rewards incompetence more than it aids low revenue teams.

  • In reply to John Arguello:

    I still find it hard to believe that the small market teams were on board with this. I don't even see the Yankees, Red Sox and Nationals buying into this.

    When you see that the White Sox were 30th in draft spending and are perennially at the bottom, it's not hard to see who was behind this.

    I think that scouting and player development has become extremely more important. The Cubs will adapt and succeed, but I'm so frustrated that Reinsdork gets his way here, when he is in the minority.

  • In reply to John Arguello:

    I just watched CTL and they had Kevin Goldstein on as a guest. He said that the union gave in on the draft because the undrafted players aren't union members yet. It was easier to give in on that and hold firm on other topics.

    NOW.. I want to scream.

    This should have NEVER even gotten to the CBA negotiations then. How did the owners (other than Reinsdork) let this happen? How does the union get a say so on players that aren't even members of their organization yet?

    This is even more puzzling now.

    How is Reisndork's interests good for the interests in baseball?

  • Really looks incompetent and lazily run teams with dismissive views toward the value of young talent and the resources to cover their own foolish mistakes are getting unduly rewarded here.

    ......

    /Dances jig

  • In reply to James Fegan:

    LOL! It's a CBA only a Sox fan could love ;)

  • In reply to James Fegan:

    *looks like

    /Continues jigging, albeit without a clear conscious

  • Thanks for the info, John. There is a lot that needs to be digested before a proper assessment can be given. I sure hope that Callis's analysis is correct, and that the slot pool will be high. Although I am not holding my breath.

    I am curious as to how this will affect the Cubs' efforts in the Dominican.and the academy there. It seems like stocking two teams in the Dominican Summer League would affect how the much money the Cubs have for other international signings.

  • In reply to CubsFanInNorway:

    Your welcome. It's a good point, Norway. I'm not sure how having to field DSL clubs will affect the Cubs approach.

    Will have to process this ton of info over the next few days. If you guys have insights or hear something that clarifies some of the rules, by all means post in the comments!

  • In reply to John Arguello:

    One of the things Kevin Goldstein mentioned on CTL is that some guy finds a kid in the DR, that "guy" has to "register" with MLB ... so any advantage of a team doing grunt work gets negated by all the other teams suddenly being aware of who the player is ... think Scottie Pippen (small college D3 player)

  • In reply to MoneyBoy:

    That's the part that irritates me. Teams that do the hard work and scouting get the shaft and teams like the White Sox can try to slip in once it's common knowledge. Hopefully they get a chance to establish a relationship so that buy the time KW makes an inquiry, the agent goes, "and you are???"

  • Lets hope that when the dust settles and Theo and Co. go over
    the CBA they will still have a great plan to work with.

  • In reply to emartinezjr:

    The best news of all is that we have quite a few smart people now in the front office that can find new ways to exploit this system. I'm sure Theo and co. are working on that right now.

  • In reply to John Arguello:

    John ... Goldstein mentioned that very thing ... said the word was out on Seligdorf's plans for the draft ... so teams spent like the last night at crap table.
    The smart guys will find a way !!!!

  • In reply to MoneyBoy:

    Great minds think alike ;) Ok, maybe not. But good to hear that Goldstein feels the same way.

  • How do you think the signing deadline affects the Cubs? It was moved up 1 month.

  • In reply to ChiRy:

    I don't think it affects the Cubs anymore than any other team. It probably would have been more difficult to sign all those tough-sign players, but realistically, teams don't really start talking to agents until close to the deadline. I think it's a positive as it will get players in a lot earlier.

  • Does Bud Reinsdorf have damaging photographs on all people in the state of Illinois and in MLB leadership positions? How does this guy get away with all this crap? Cubs want to borrow money from tax on their parking for renovations while paying other half out of pocket and denied. Jerry Selig has stadium and restuarant built with all public money and yet gets to keep all money coming in from the ballpark and restuarant with the state collecting nothing. And this draft system only benefits teams like the yankees and red sox with $200M payrolls or like the sox who want to steal from their prospects instead of paying them. This cripples small market teams who can spend heavy in draft and international markets and can afford to miss on some picks, whereas if they pay for FA and they bust out they're in a bigger hole. Sorry for the long post, had to vent. Bud and Jerry need to go.

  • fb_avatar
    In reply to Teddy KGB:

    John, I hate to drag politics onto this board, but Teddy's question deserves an answer.

    Teddy, it's called "crony capitalism," but really isn't capitalism at all. "Corporate welfare" is what it really is. Public financing of ballparks is total BS, and that goes for the Cubs as well.

    The numbers show it doesn't pan out for the taxpayers, but the politicians don't want the loss of prestige or the loss of jobs, and then of course you have the PAC's associated with both the owners' and players' associations.

    Remodeling Wrigley, however, is particularly difficult without involving the city and the state because of the historical landmark designation. In fact, it might be next to impossible, but then it was meant to be that way so the politicians and bureaucrats could wet their beaks.

    I'd be particularly proud of the Ricketts' if they said screw the political games and went on their own, even if it meant moving the team. I'll love the Cubs no matter where they are, and I bet I'm not the only one who feels that way.

    Now I'll get off my soap box, and I will digress to the spirit of this thread. This new system sucks, but it is what it is. The reality is the teams who spend the money to do a good job of scouting will still have a built in advantage over those who don't, but it just won't be as big of an advantage as it was before because of the monetary restrictions. It's just a shame that the Cubs came late to the game under the old system. Had they had people in place and the willingness to take advantage of it, this organization wouldn't be in near as bad a shape as it is right now.

  • In reply to Teddy KGB:

    No worries on the long post! Don't blame you for wanting to vent. If Bud left I'd be happy with that. Then at least Reinsdorf doesn't have his hapless little toadie in charge.

  • Thanks for the reply. Didn't really mean to make it a political discussion either, just venting. I wish Ricketts would just move the team to the suburbs or Indiana if that would help them become a consistent winner. The people who put in the time and resources to the draft will still have an advantage, but it really hurts a small market team. The smarter small market teams knew to pay over slot for amatuer talent and you have a chance with a lot less money and risk to land enough difference makers to compete rather than use the "patchwork" players.Plus they would have 6 years of player control before trading an impact player to restock system. Pirates finally stopped paying for fringe players and investing the smart way and are slowly getting better. Why not have the luxury tax on draft just money and luxury tax on major league payroll money and draft picks? Seems like better way to try to get more parity.

  • fb_avatar
    In reply to Teddy KGB:

    Teddy, friend me on Facebook, and you'll find out what I really think of politicians, but yes, this deal is going to make it even harder for small market teams to compete.

    Pro sports works under a unique set of economic principles because, even though they're competitors on the field of play, they're business partners off of it. It does the Yankees, Red Sox, Mets, Dodgers, Angels, White Sox and Cubs little good if all they have is each other to play. The NFL learned this a long time ago, MLB was starting to go in that direction, but this new CBA just blew all that up. 10 years from now, this CBA will be viewed as a monumental mistake.

  • In reply to Michael Caldwell:

    Michael, whatever you want to call it, what bothers me most here is that incompetence, laziness, and short-sightedness is being rewarded more than small markets are being helped.

    We can moan and groan all we want as Cubs fans but it's worse for a team like Tampa who work hard and found a way to beat the system is having those things taken away from them because some teams (like the White Sox, for example), haven't been smart enough to follow suit. They want to keep doing business the same ineffective way yet get rewarded for it. It's frustrating to say the least. When you can' win, change the rules.

  • In reply to Michael Caldwell:

    Michael ... http://articles.chicagotribune.com/2011-11-19/news/ct-met-isfa-emanuel-changes-20111119_1_emanuel-opponent-gery-chico-norman-bobins-mayor-rahm-emanuel

    I don't know if Emanuel is as pro-Cub as Daley was pro-Sox ... but he was clearly outraged at the publicly funded restaurant and shop.

    The NFL revenue shares because the TV market is national and controlled by the league ... except for pre-season. None of the other sports have that clout.

    I fully expect this CBA to be challenged in court ... "restraint of trade" or whatever lawyer-speak is ... same sort of thing as the NBA keeping HS kids out of the league.

  • Are the changes in the new CBA going to change the Cubs trading
    philosophy during the new month. Should they trade for more young
    prospects ASP

  • In reply to emartinezjr:

    The only thing i saw changing is that you can't acquire a player midseason and get compensation for him. So if the Cubs were looking to acquire someone as a stopgap then collect picks when they leave, they have to make that trade before the season starts.

  • As you know there are so many updates on the CBA out there.
    Once its said and done I hope you will do another article
    going into greater detail on how this affects the Cubs during the
    in the near future. Will it greatly affect their drafting/international
    prospects philosophy

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