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Monday, February 11, 2019

Inside The Numbers: The Player Salary Battle Lines Between MLB And The MLBPA

It is here that the story of last season surfaces and shows that even if there is an uptick in 2019, as of now it is possible that it does not come back to levels seen as of 2017. From 2006-17, the percentage in player compensation across MLB, MiLB, and amateur signings was 56.5%. In 2018, the average was 54.8%. This occurred as the growth of league revenues increased at a faster pace than compensation back to the players grew:...

The percentage in player compensation has not moved smoothly. It has seen wild fluctuations at given points. And it’s here that the players have a concern. Note that even when money had not yet arrived into the owners’ pockets, such as the announcement ahead of the league’s new national TV deals taking effect, clubs increased spending on talent, as sign, they say, that clubs used to be interested in winning by investing:...

For the owners, they point to prior history and say, on average the percentage to all players has remained constant even with the deep drop in 2018. The trendline, while down, is nearly flat. But, for the players, what is concerning is if this new trend of owners investing in the front end (those 0-6 players), as opposed to the back end with free agents.


RoyalsRetro (AG#1F) Posted: February 11, 2019 at 10:04 AM | 12 comment(s) Login to Bookmark
  Tags: labor

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   1. JRVJ Posted: February 11, 2019 at 12:58 PM (#5814302)
Interesting work from Maury.

I've been following this, other articles and his tweets, and he genuinely seems to think that it's a pretty complicated matter (i.e., no "collusion" smoking gun). So in many ways, the way this off-season closes out (one would think there'll be a bunch of signings soon enough, but days go by and it doesn't happen) will determine how things will be interpreted by all.
   2. TDF, trained monkey Posted: February 11, 2019 at 03:48 PM (#5814401)
Per the article, the owners are getting smarter by investing more heavily in younger (better) players at the expense of older (declining) players. Isn't the answer for the players to seek (1) a higher minimum and/or (2) shorter time til FA?
   3. base ball chick Posted: February 11, 2019 at 05:20 PM (#5814428)
younger is cheaper. the better or not better is irrelevant

and the answers are exactly what you say - a MUCH higher minimum - getting rid of the days played game to screw the players out of a year of FA by automatically making an adjustment when they hit the time played no matter when it happens in the season. also making arb after year 2, not 3. the players are gonna make their best money in arb, not FA
   4. SoSH U at work Posted: February 11, 2019 at 05:26 PM (#5814430)

How would that work?

   5. RoyalsRetro (AG#1F) Posted: February 11, 2019 at 05:48 PM (#5814437)
Players become free agents as soon as they hit six years of service time! Even if its midseason!
   6. Jack Sommers Posted: February 11, 2019 at 07:28 PM (#5814467)
I've been advocating increasing the minimum to 1M, but by the time they get to new CBA, maybe even needs a higher starting point, like 1.2
   7. RoyalsRetro (AG#1F) Posted: February 11, 2019 at 07:53 PM (#5814476)
I'm okay with a lower minimum but give more avenues for actually good players to earn more money before FA. I don't see the point of making replacement level players millionaires. The problem is a legit star like Aaron Judge made half a million dollars last year. Give those players some sort of bonus incentive for actually being good, or some sort of leverage to get a lucrative long-term deal.
   8. Dr. Vaux Posted: February 11, 2019 at 08:33 PM (#5814479)
I don't see the point of making replacement level players millionaires.

But they've worked so hard!!!111
   9. Walt Davis Posted: February 11, 2019 at 08:55 PM (#5814483)

Not really. They've gamed the system (slotting, total draft $, total international $) to LIMIT the size of their investment in younger players. Add in service time games and that arb prices will flatten in the same way that FA prices have and they are most likely investing LESS (as a percentage of revenue almost certainly and maybe even in raw dollars) in young players. One reason behind the shift to young players is that they have a higher RoI AND that RoI is going up. Giving more PT to young players is NOT "investing" in them, it may even be "exploiting" them.

So yes, the union needs to limit the RoI on young players.

I kinda liked an idea I stumbled across the other day. Obviously play with the $ numbers to your taste ...

1. There is a minimum tied to service days -- let's say $2,000 per service day -- absolute minimum of $360,000 ... but wait for the rest of the steps.

2. That minimum goes up by year of service time -- say $2,500 per day in year 2; $3,000 in year 3 and $4,000 for any days beyond 3 years but pre-arb ("year" 4). So new absolute miniimums of $450,000 and $540,000.

3. There are then substantial bonuses for every 100 PA, every GS, every relief appearance (and, yes, we may have to do something about openers ... or, maybe better, not do anything then they will disappear rather than make Ryan Stanek the highest paid young pitcher). These too would go up with service time.

For position players, let's start at something like $100,000 per 100 PA so that a first-year full-time player would make about $1 M while a first-year bench player might only make about $560,000. (We can easily pro-rate that at $1,000 per PA if you want.)

Then let's play with numbers. Make it $150,000 per 100 in year 2 and $200,000 in year 3 and $300,000 in year 4. A second-year full-time then makes about $1.3-1.4 M and a 3rd-year makes about $1.8 and a guy who missed the super-2 deadline makes about $2.2 M in that final pre-arb season.

That doesn't bring performance into it in a direct fashion so, yes, some AAAA guy starting for the 2019 O's would make as much as Vlad Jr ... but that's the O's "fault" for not having a better player.

Note also that thresholds based on service time trigger mid-season, at least up until arbitration. Arb rules stay the same (or to whatever changes the MLBPA might be able to negotiate) so we still have super-2 but service time games are at least less rewarding -- Bryant still gets to FA a year later than he deserves but at least his base pay would have gone up 10 days into season 2 then again 10 days into season 3. Guys brought up just after the super-2 deadline would at least start making 2nd, 3rd and 4th year money for about 2/3 of the season before getting to arb.

You then try to set pitcher playing time rewards at a level that makes them comparable to position players, with a full-time reliever probably earning less than full-time SP or position player (but maybe not). You could do that simply by batters faced I guess which avoids starter/reliever/opener issues -- and would make full-time healthy SPs the top paid young players which may or may not be fair (you could cap it I suppose).

A main hurdle is how are players earnings set while on the DL.

I also like service time starting when you go on the 40-man but I don't think MLB will quite agree to that. What maybe you could get is something like "the first year of service ends with either 540 days on the 40-man roster or 180 days of ML service time, whichever comes first. And then every 180 days on the 40-man from there. 40-man guys in AAA running out of options wouldn't get the playing time pay but would get the service time pay after 40-man service time year 2.

Anyway the basic idea is to tie pre-arb pay to both service time and playing time. Nobody is going to hold a player on the 25-man all year and never play him so the $360,000 minimum will never come into play. Maybe the union will want to increase the service time pay rate while decreasing the PT pay rate so as to avoid any possibility of a 1st-year full-year player making less than under the old system (e.g. a rookie back-up C who gets 120 PAs would get only $480,000 with my numbers) but those details can be worked out. We can add something to deal with PR and defensive replacement and "pulling the PH when they change pitchers" appearances that don't result in a PA. You could also add some bonuses/"penalties" for optioning a player back to the minors.
   10. bbmck Posted: February 11, 2019 at 10:48 PM (#5814504)
Born in the 1980s, 321 players have 100+ PA in their first season, 163 with 200+, 93 with 300+, 52 with 400+, 25 with 500+, 8 with 600+, probably only Rocco Baldelli, Dan Uggla, Albert Pujols and Austin Jackson get a full season. Jose Fernandez 123 and Francisco Arcia 106 is in 2018.
Born in the 1980s, 468 players have 100+ PA in their second season, 326 with 200+, 228 with 300+, 161 with 400+, 104 with 500+ and 51 with 600+. David Freitas 106 is in 2018.
Born in the 1980s, 478 players have 100+ PA in their third season, 358 with 200+, 273 with 300+, 202 with 400+, 145 with 500+ and 79 with 600+. Whit Merrifield 707, Jose Martinez 590, Yuli Gurriel 573 and Kevan Smith is in 2018.
Born in the 1980s, 428 players have 100+ PA in their fourth season, 349 with 200+, 279 with 300+, 216 with 400+, 158 with 500+ and 83 with 600+.

Ignoring 700+, 662 increments of 100 PA in first season, 1338 in second, 1535 in third and 1513 in fourth so around 505 increments per season or ~$50mil which would go down if the system was in place and teams had motivation to bench a player at x99 PA or avoid that with $1k per PA. Give similar money to pitchers and it's $3-4mil for an average team per season but with bare bones teams like the 2019 Marlins and Orioles paying way above average.
   11. Walt Davis Posted: February 12, 2019 at 12:34 AM (#5814517)
A fair question ... a team of all 1st-year players then would cost

25 x 360 plus DL players = $9 M +
6300 PA X $1000 = $6.3 M
6300 BF x $1000 = $6.3 M

So that's $21.6 M

Assume something like a 3/2/1 PA/IP and service time split among 3/2/1 service time players ... 25 slots by 180 service days each is 4500 service days so

750 X $2,000 = $1.5
1500 X $2,500 = $3.75
2250 X $3,000 = $6.75

2100 X $1,000 = $2.1
4200 X $1,500 = $6.3
6300 X $2,000 = $12.6

That's $33 M. Not radical but a lot higher than the theoretical $13.5 M that such a team would cost today.

Using Tampa as an example, they have 5 arb guys plus Morton on a 2/$30 plus Kiermaier's buyout which pays him $8 this year -- $41 M total for those 7 players. Those 7 guys would probably eat up about 1/3 of the total PA/BF (more if fully healthy, less if not). So if they kept all those guys that would be $41 replacing $11 and total cost would be about $63 M which is $9 M more than their current payroll. Alternatively, they could not have signed Morton or they could have non-tendered Zunino and Pham to keep the cost the same.

Certainly in my "I've given this an hour of thought, MLBPA should pay me a $3 M consulting fee" system, it's still the little guy who gets screwed -- it's either the vet utility IF that a TB is no longer willing to sign or the kid who loses his spot because he's no longer cheaper than the vet or the arb player who gets squeezed out -- he becomes an FA (hooray) but will be a much less costly option for some team than a full-priced FA. Young players obviously remain a massive bargain -- even if TB pays the full $9 M extra, that's the price of a good FA reliever, doesn't do a lot to the FA market.

There would be some follow-on effects to the arb system -- if a 3rd year starter is already making $2 M then the min arb award for the next year you'd think would be $4-5 ... so a stud like Correa will do much better.
   12. Walt Davis Posted: February 12, 2019 at 01:19 AM (#5814519)
And Kris Bryant:

Year 1: $342,000 in service time, $650,000 in PA = $992,000
Year 2: $18,000 + $427,500 in service time, roughly $70,000 + $996,000 in PA = 1,511,500
Year 3: $22,500 + $513,000 in service time, roughly $49,500 + $1,264,000 in PA = 1,849,000

So about $4.3 M compared with a minimum of $1.62 although the Cubs were nice enough to pay about $2.2. That extra $2.1 M isn't going to matter a lot to the Cubs, Bryant, Machado/Harper or the ML average payroll but it helps. The Cubs also would have paid $1-2 M more each to Russell, Baez, Contreras, Schwarber, Almora, Happ, Hendricks, Edwards and Montgomery. That might have cost Duensing his job! :-)

Let's take LaStella for the other end of the spectrum. I'm WAGging he had about 120 service days with Atlanta and 480 with the Cubs prior to being arb-eligible prior to last year. So his pay would have broken out something like this (no idea really how service time vs PAs breaks down)

Atl: 120 days, 360 PA = $600,000 (relative to about $340-360,000)
2015: 170 days, 75 PAs = $120,000 + $275,000 + $103,500 = $498,500 (relative to about $500-510,000) ... lots of time on the DL
2016: 150 days, 169 PAs = $105,000 + $160,000 + $118,500 + $180,000 = $563,500 (vs about $450,000)
2017: 160 days, 151 PAs = $300,000 + $240,000 + $188,000 + $165,000 = $893,000 (vs about $480,000)

Now the Cubs probably don't give him those extra ~60 days of service in year 4 for a few PA appearances ... but then they might have had to pay him more for the DL time. Still, he'd have had about $2.5 M in career earnings through 2017 rather than about $1.8 ... and he'd have made about as much in 2017 as in his first arb year of 2018. So that's sort of the extreme of the guy who gets a lot of service time without really playing much. Presumably young back-up Cs would earn along those lines as well.

Edwards could be the young reliever -- he just squeaked over the super-2 line. With 2.134 service years that's $360 + $450 + $260 = 1.070 in service time plus about $250 + $375 + $280 = $905 in BF so about $2 M as a super-2 compared with about $1.5 in actual earnings. He has some DL time too.

So a sticking point is that year where LaStella made a bit less than he would under the current system and whether players get paid anything besides service time while on the DL (potentially leading to lots of LaStellas if they don't).

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