Fans of the KC Royals shouldn’t get excited about MLB’s latest proposal to the players. Made Monday, it’s certain to be rejected.
Major League Baseball made another offer to its players Monday. It’s a step nowhere, a proposal as destined for rejection as those that came before it. Nothing in it provides much hope for fans of the KC Royals.
The clubs’ reported offer includes, for example, and for this winter only, elimination of Qualifying Offers (QOs)and loss of draft picks from the game’s cumbersome free agency process. Under the game’s current collective bargaining agreement, accepting a club’s optional QO binds a player to their team for another year while rejection frees them to negotiate with all clubs for a better deal.
Teams lose a draft pick if they sign a player who rejects a QO and teams losing such players get a compensatory pick. The weakening of recent free agent markets has led players to view QOs and draft pick concerns as impediments to better deals. The purpose of the clubs’ newest offer to drop these pieces of the free agency puzzle for a year isn’t complex: eliminating QO’s eliminates the financial risk of acceptance and doing away with the draft pick penalty component seemingly tempts clubs to sign players.
But the fact of the matter is probably this: hit already with serious pandemic-related revenue losses and sure to suffer more, clubs will probably make fewer QOs this winter and won’t spend much at all on free agents. That makes the new proposal all but meaningless.
Specifically, players are bound to consider QOs more seriously than they have in the past–some will take sure money before risking being stranded unsigned in a weak, or non-existent, free agent market, a familiar recent fate for others. Remember the KC Royals’ Mike Moustakas, who returned to the club after finding an unfavorable market? That puts clubs at more risk–players might accept their QOs and cost teams more cash. So owners may not want to make any QOs, which renders an offer to eliminate them pretty shallow.
But, some might say, why offer to do away with QOs when nothing requires teams to make them? Because QO’s can’t be eliminated unless the union agrees to eliminate them. The union will scream collusion if too many clubs don’t give QOs, but a bargained-for suspension of those QOs is a perfect and complete defense to a collusion charge.
But, some others might ask, aren’t the compensatory draft picks teams get if their players reject QOs and sign with other clubs incentive enough to risk making QOs? The answer depends on the player’s value to the club, what it will cost to replace him, and how long it might take to turn a comp pick into a major league player…if that happens at all.
But, still others might suggest, won’t it ultimately cost teams more to sign their own free agents? Under normal circumstances, certainly. Take Eric Hosmer, for example, who rejected the KC Royals’ $17.4 million QO, then signed a far more extravagant deal with San Diego. But that was then, when many clubs had the cash to attract and sign top free agents; this is now, when their coffers aren’t as full and no revenue-generating games have been played, and might not be. Current conditions may lead players to stay and sign for less than they otherwise would.
Of course, none of this will matter when it comes to the best free agents and a few select, rich teams. Someone will pay huge money for Mookie Betts and George Springer under any circumstance. The small market KC Royals won’t, but the Dodgers or Yankees will.
The rest of the free agents, however, will find the market far less lucrative and friendly. Clubs who successfully pursued a drastically reduced amateur draft, those who released dozens of minor leaguers and refused to pay those they didn’t release, did so for one reason–to save a lot of money. That most probably won’t pursue free agents with the money saved (they’ve long been itching to restrict free agency and compensation) is almost certain to generate collusion charges.
MLB, then, is probably looking for the legal cover it can get if the union agrees to the proposed free agency modifications; revenue losses will likely provide additional cover for substantially reduced free agency activity. It’s a sad state of affairs and will only increase the ever-deepening distrust between labor and management.
That leaves, of course, the other major component of MLB’s Monday offer–games and how to pay players to play them. The clubs proposed 76 regular season contests and a 16-team postseason (with a World Series). Seventy-six games look better than the 50 the clubs last offered–and the 48 they’re rumored to be ready and willing to order Commissioner Rob Manfred to impose, but it’s less than the 114 the players offered and the 82 MLB recently proposed.
Offering 76 now signals owners will pare down any subsequent offers (if they don’t first direct Manfred to unilaterally declare and open a 48-gamer) and claim they have to because each day passed without a deal imperils their desires for a season ending in September and a postseason concluding in October.
Initially, 76 games might appeal to the players, but in number of contests only. How the clubs propose to pay the players will be the deal-breaker: basically 75% of full pro-rata compensation (a reduction from the full pro-rata deal the parties made in March, but one MLB says is open to further discussion if games are to be played without live spectators)with part of that 75% coming from postseason revenues, some of which the clubs surprisingly say they’re willing to share with the players.
If that sounds like revenue sharing, it is, something players detest almost as much as they do a hard salary cap. The postseason share depends on a postseason even occurring, an uncertainty given speculation about a fall COVID-19 resurgence. And the offer represents a further reduction in compensation.
I won’t bore you with the number crunching, but even my rudimentary computations suggest players may make 30-35% of full-season salaries under this newest proposal, an estimate consistent with the 33% CBS Sports’ Mike Axisa suggests via Twitter matches the clubs’ two previous offers.
These aren’t all the components of the clubs’ Monday offer, but they’re enough to portend its quick demise. The union will never accept it.
But because the players want to play and get paid, they’ll make a counteroffer, perhaps sometime Tuesday but definitely by end of business Wednesday (as MLB requested). When it comes, we’ll have a far better idea whether 2020 will feature almost half a KC Royals season, a less-satisfying 48-game campaign, or no season at all.
The players are certain to reject MLB’s latest offer. Will they counteroffer with a deal moving us closer to a KC Royals season? A short time will tell.