Proposition to make baseball better: 6 year contract max

[Lou]

8 minutes ago, Dtwncbad said:

The point is what I suggest has the same core feature as the luxury tax, except it caps contract length instead of dollars.

the problem here is that you're equating a tax with a cap. 

they are two completely different things. 

[Dtwncbad]

33 minutes ago, Lou said:

the problem here is that you're equating a tax with a cap. 

they are two completely different things. 

No I am not "equating" it.  I am saying they are things that attempt the same goal.

You are being argumentative for no reason.  Hey have you ever noticed that airbags and seatbelts are "two completely different things"?

[beatlesrule]

The better thing to do is just

If you do that, all of your wildest dreams will come true.

[Angel Oracle]

On ‎11‎/‎29‎/‎2018 at 10:09 AM, Second Base said:

Whispers around the MLBPA seem to suggest that they'll be insisting on a restructured service clock that would allow young players to become free agents sooner rather than later.  Currently the typical timeline is six years.  Three pre-arb years where they're right around the league minimum and three more arbitration years.  They'll be looking at cutting one year off the pre-arb years, and another away from arbitration which would cause players to reach free agency after four years rather than six.

This would likely result in a lot of money being thrown around in free agency.  Could you imagine the sort of contract Mike Trout may have received if he hit free agency at age 24.  16 year deal?

Which is why it makes sense to also limit the length of contracts going forward?    Six seems like a short limit.   I might look at something like 8 years, while also limiting option years.   The opt out figures to grow in use anyway, and this would ensure that.  

[Lou]

1 hour ago, Dtwncbad said:

No I am not "equating" it.  I am saying they are things that attempt the same goal.

You are being argumentative for no reason.  Hey have you ever noticed that airbags and seatbelts are "two completely different things"?

"The point is what I suggest has the same core feature as the luxury tax, except it caps contract length instead of dollars."

the luxury tax DOES NOT CAP DOLLARS.

i'm "arguing" because you are wrong and you're the only one who either doesn't see it or just refuses to admit it. 

[Lou]

2 hours ago, Lou said:

which "second tier" teams are prepared to pay Harper 6/$300M ? 

still waiting on this, btw 

[Dtwncbad]

2 minutes ago, Lou said:

"The point is what I suggest has the same core feature as the luxury tax, except it caps contract length instead of dollars."

the luxury tax DOES NOT CAP DOLLARS.

i'm "arguing" because you are wrong and you're the only one who either doesn't see it or just refuses to admit it. 

Lou you are being ridiculous.  My grandest, most humble apology for using the word "cap" when only 99% of the people who read it would understand the point rather than froth at the mouth over its literal meaning.

Let me be better at this to accommodate you without triggering you with the word cap.

The luxury tax "effectively limits" payroll.

For fun though, is there literally a hard cap on the number of arbitration years a player gets?  Yes.

Is there a literally a imit on International spending? Yes.

Is there literally a limit to the number of years you can control a minor league? Yes.

Can you find a way to not get hung up on a silly detail that has almost nothing to do with the simple IDEA that MLB entertain having a limit on the number of years onto the future you can control a major league player?

[Lou]

ok

[Stradling]

I don’t think we need to do this mainly because in the history of free agency I doubt there have been 20 contracts of longer than 6 years.  The longest contract ever was from what we would call a small market team in the Marlins.  

[Lou]

48 minutes ago, Stradling said:

I don’t think we need to do this mainly because in the history of free agency I doubt there have been 20 contracts of longer than 6 years.  The longest contract ever was from what we would call a small market team in the Marlins.  

Bingo.  it's a ridiculous idea that will never happen.

[Dtwncbad]

Well it may never happen but it is not a ridiculous idea.

 

 

[AngelsLakersFan]

So I originally dismissed this idea out of hand, but since we are still arguing about it I figured I'd give it some thought.

Let's start with the (most likely incorrect) assumption that this rule is enacted without any additional corresponding changes. The Albert Pujols contract is a pretty good example to use because everyone seemed to think that there was no way that the Angels thought Albert would be useful for 10 years. 6 years was a more reasonable length of expectation, but the team used the additional 4 years to spread out their actual financial commitment over a longer period of time, reducing the annual cost and the real value of the money being paid out over time.

If the 6 year limit was in effect the Angels would probably have valued Albert similarly but not at 100% of the value. I'd guess they would value him closer to $220m than $240m (he's old AF). Since we are dropping off the money from the last four years of the contract we have to compensate for that money being less valuable when we estimate his new AAV, so I'd estimate he'd go from $24m AAV over ten years to about $33 or $34m AAV over six (using a basic annuity calculation).

So what are the effects of this? First and most obvious, it costs Pujols about $20 million real dollars. The second and third effects are a big deal though, and they are going to affect the league as a whole.

Primarily the Angels hit to the luxury tax amount goes up by about $10m annually. This takes them out of the running for an additional $10m player each of the six following years due to their proximity to the luxury tax threshold. 

Next you have to question the market for Albert as a $33m annual player. The Angels are a cash flow centric organization who are apparently already pushing up against their annual financial capabilities despite the recent increases to the luxury tax limit which we had previously thought was the organizational spending limit. At a higher annual payout I don't think the Angels have as much interest in Pujols from a financial perspective. This could have the effect of driving Pujols value in the market down further, maybe to, say, $30m per year.

Lastly you mention how smaller market teams are more likely to jump in here, but moving from $24m annually to $34m (or even $30m) seems like it would make less financially capable teams less likely to jump in. The main reason being, you are still offering what you value Albert's contributions at, and the rest of the teams are doing the same, we are just paying more money up front in exchange for limiting the long run risk.

So what are the real effects? Clearly a reduction in player salary among the top players for sure. Normally I would expect this money to 'trickle down' to lesser players, but the market is moving away from second and third tier free agents for very good reason and this likely exacerbates this by taking top teams out of the market for these players as well. Owners likely pocket this money. Ultimately, some teams will be limited by this, while others will be positioned to step in and sign top players in their place. That said I don't think you can predict which groups of teams will be which one. As is currently the situation free agents will be signed by teams with good cash flow and limited current obligations.

[Dtwncbad]

28 minutes ago, AngelsLakersFan said:

So I originally dismissed this idea out of hand, but since we are still arguing about it I figured I'd give it some thought.

Let's start with the (most likely incorrect) assumption that this rule is enacted without any additional corresponding changes. The Albert Pujols contract is a pretty good example to use because everyone seemed to think that there was no way that the Angels thought Albert would be useful for 10 years. 6 years was a more reasonable length of expectation, but the team used the additional 4 years to spread out their actual financial commitment over a longer period of time, reducing the annual cost and the real value of the money being paid out over time.

If the 6 year limit was in effect the Angels would probably have valued Albert similarly but not at 100% of the value. I'd guess they would value him closer to $220m than $240m (he's old AF). Since we are dropping off the money from the last four years of the contract we have to compensate for that money being less valuable when we estimate his new AAV, so I'd estimate he'd go from $24m AAV over ten years to about $33 or $34m AAV over six (using a basic annuity calculation).

So what are the effects of this? First and most obvious, it costs Pujols about $20 million real dollars. The second and third effects are a big deal though, and they are going to affect the league as a whole.

Primarily the Angels hit to the luxury tax amount goes up by about $10m annually. This takes them out of the running for an additional $10m player each of the six following years due to their proximity to the luxury tax threshold. 

Next you have to question the market for Albert as a $33m annual player. The Angels are a cash flow centric organization who are apparently already pushing up against their annual financial capabilities despite the recent increases to the luxury tax limit which we had previously thought was the organizational spending limit. At a higher annual payout I don't think the Angels have as much interest in Pujols from a financial perspective. This could have the effect of driving Pujols value in the market down further, maybe to, say, $30m per year.

Lastly you mention how smaller market teams are more likely to jump in here, but moving from $24m annually to $34m (or even $30m) seems like it would make less financially capable teams less likely to jump in. The main reason being, you are still offering what you value Albert's contributions at, and the rest of the teams are doing the same, we are just paying more money up front in exchange for limiting the long run risk.

So what are the real effects? Clearly a reduction in player salary among the top players for sure. Normally I would expect this money to 'trickle down' to lesser players, but the market is moving away from second and third tier free agents for very good reason and this likely exacerbates this by taking top teams out of the market for these players as well. Owners likely pocket this money. Ultimately, some teams will be limited by this, while others will be positioned to step in and sign top players in their place. That said I don't think you can predict which groups of teams will be which one. As is currently the situation free agents will be signed by teams with good cash flow and limited current obligations.

Thanks for the feedback with fair consideration.

The whole discussion is tough because so many other details would likely change like the lux tax threshold.  If part of the presentation to the league is that 6 yrs makes more sense than 10, you can reasonably assume the annual salary over 6 would be higher.  Naturally they would have to accommodate that with an adjustment to the lux tax.

Just speculating.

[IheartLA]

Why are you so focused on just one side of the coin. The billionaire owners and the teams are getting more and more of the leverage year by year. Teams that want to tank aren't spending anything because the minor league system and the service time is so heavily in their favor. Look at any MLBtraderumors payroll projection for a given team where they have the payroll year by year and almost every team is spending less in the current year than almost 10-15 years ago. This doesn't account for inflation or revenue increases where theory would be that teams should be spending way more now than in 2008.

I think something has to be done with the service time with the minor leagues. It has to count towards it in some capacity, it would make the game younger and more exciting also. Teams would call up their top prospects faster and the players would get paid more relative to their contributions. Adell and Canning would already be up and two older fringe veterans like Young/Mcguire would have been pushed out sooner. Ditto every team's top prospects. We won't get rid of a good veteran for any old minor leaguer, but the top 1-2 prospects in every organization would be up faster and it would be good for the game. This will also prevent situations like Kris Bryant or Vlad Guerrero happening, fans would get to the see the young exciting talent earlier. 

Teams also should have to spend a salary floor based on a number such as revenue from the prior year. Like 80% or 2017's revenue is your 2018 salary floor. No reason a team should sit on their earnings to tank and get rewarded for it. When do fans in 2018 bring up how low the payroll was in 2013 and say all those savings are now going to be utilized in the current year? Never, when we as fans calculate 2019's payroll and who we can sign, we always just use the current numbers, we never say we were under payroll by X amount in 2016/2017 and those savings will mean we will spend more. 

[Lou]

7 hours ago, IheartLA said:

 almost every team is spending less in the current year than almost 10-15 years ago

I find this hard to believe. 

average annual team payroll has increased by $30M over the last 8 years alone 

[Rico]

I've always liked how the NBA has done it.  4 year rookie contracts, restricted free agency (4-5 years), then unrestricted free-agency 5 years if you sign with your current team or 4 years with new team.

Max contracts are capped by both years and money, but players get an opportunity to earn more earlier in their careers.  Restricted free agency essentially replacing the arbitration process.  All while the home teams are given a small advantage to keep their best players by being able to offer one extra year.

[Dtwncbad]

4 hours ago, Lou said:

I find this hard to believe. 

average annual team payroll has increased by $30M over the last 8 years alone 

I would have to look it up but I think when they say teams are spending less, they mean salaries as a percentage of overall revenue. 

[Lou]

2 minutes ago, Dtwncbad said:

I would have to look it up but I think when they say teams are spending less, they mean salaries as a percentage of overall revenue. 

he never mentioned revenue 

[Jeff Fletcher]

On 11/29/2018 at 10:19 AM, floplag said:

i think its a very one sided idea that in no way benefits the players thus the union would surely prevent it 

^^^^

In order for this to be a real discussion, you need to figure what you’re giving the players in exchange for this. 

Earlier free agency? Higher minimum salary? Etc.

 

Edited December 1, 2018 by Jeff Fletcher

[Stradling]

Early free agency, DH in NL, and 28 man rosters.   Then they’d simply say, not enough. 

[Angelsfan1984]

23 minutes ago, Jeff Fletcher said:

^^^^

In order for this to be a real discussion, you need to figure what you’re giving the players in exchange for this. 

Earlier free agency? Higher minimum salary? Etc.

 

156 games?

[IheartLA]

12 hours ago, Lou said:

I find this hard to believe. 

average annual team payroll has increased by $30M over the last 8 years alone 

 

 

The fact that half the league won't spend even 50% of revenue on salary needs to be addressed in the next CBA. Also when fans/media discuss payroll salaries they need to adjust contract values for inflation. A $1 in 2000 is not the same as $1 in 2018.

https://www.fangraphs.com/blogs/jose-altuve-signs-updated-joey-votto-deal/

Time Value of Money and Present Value need to be taken into consideration. The agents and front offices are certainly doing so. $252M in 2000 when ARod signed his deal would be $370M in 2018 to be equal value.

[IheartLA]

4 hours ago, Stradling said:

Early free agency, DH in NL, and 28 man rosters.   Then they’d simply say, not enough. 

28 man rosters means a pitching change every batter in the late innings. I'm on board with earlier free agency or minor league years counting towards service time. Something like the half season you were drafted + 1 year right after not counting towards the clock. But anything after that will start accumulating towards FA.

[Lou]

36 minutes ago, IheartLA said:

The fact that half the league won't spend even 50% of revenue on salary needs to be addressed in the next CBA. Also when fans/media discuss payroll salaries they need to adjust contract values for inflation. A $1 in 2000 is not the same as $1 in 2018.

https://www.fangraphs.com/blogs/jose-altuve-signs-updated-joey-votto-deal/

Time Value of Money and Present Value need to be taken into consideration. The agents and front offices are certainly doing so. $252M in 2000 when ARod signed his deal would be $370M in 2018 to be equal value.

did your original post mention payroll in relation to total revenues?

[Lou]

oh, and I completely understand the concept of Time Value of Money and Presnt Value.