OC Register: Hoornstra: Tying MLB player salaries to performance an idea worth revisiting

[AngelsWin.com]

Besides paying taxes and various acts of war, playing baseball might be the most well-chronicled activity in human history. If something took place in a professional baseball contest since 1900, there is a better than average chance it has been recorded for perpetuity. The maintenance of these records has continued unabated. The bigger question is what to do with them.

Soon, a player’s statistics might form the basis for determining his future salary, if major league owners can convince the players’ union to accept a proposal recently floated in collective bargaining. It reportedly calls for a version of Wins Above Replacement, weighted for recency, to replace the salary arbitration process for players who have attained more than three but fewer than six years of service time.

The idea sounds bold on the surface: eliminate the time-honored, sometimes contentious arbitration process by punching a number into a computer. Dig a bit deeper, and it resembles an upcycled version of an idea the owners floated during labor talks in 1990. It also speaks directly to a bullet point found in the 36-page lockout guide recently distributed to players and agents by the union.

“For decades, our reserve system has been separated into three main groups: pre-arbitration players who make near the minimum salary, players eligible for salary arbitration, and free agents,” the guide reads. “Recent industry trends show that more and more on-field value is being created by younger players whose salaries are artificially suppressed by the reserve system. The system needs to be modernized so that players can be compensated for the value they create, WHEN THEY CREATE IT.”

I did not add the capital letters; they’re right there in the text. This underscores the importance the union places on modernizing a system that allows some of the game’s best players to languish near major-league minimum compensation. The owners seem open to the idea of letting statistics – not merely service time – form the basis for determining a player’s salary. But the players are said to consider any system that replaces salary arbitration as a “non-starter.”

What’s intriguing here is the room for compromise to make an unfree market for young major league players a little more fair.

Take the example of Wander Franco, who this week reportedly agreed to a 12-year contract that guarantees him around $185 million. The consensus top prospect in baseball had a .313 batting average and a .955 on-base plus slugging percentage when the Tampa Bay Rays promoted him from Triple-A on June 22. He played well enough in 70 games with the Rays to finish third in American League Rookie of the Year voting. Because Franco, 20, is eligible only to make a prorated portion of the major-league minimum salary, he likely earned somewhere between $200,000 and $300,000 in salary (excluding postseason shares) this year. Some players will have earned 100 times that amount in 2021.

Would any “pay-for-performance” system that would help the Wander Francos of the world pass muster with both sides?

The most hope emerges when we consider how far statistical evaluations have come in the last 31 years. Based on contemporaneous writing, here’s what we know about how the 1990 pay-for-performance proposal would have worked. It’s possible some of these stipulations were added or removed during the bargaining process, but all were reportedly on the table at one time:

All players not yet eligible for free agency (i.e., those with less than six years’ service time) would be subject to having their salary determined by a two-year statistical table that combined seniority with batting stats (for hitters) or pitching stats (for pitchers)Each team would pay 1/26th of the player’s total salary, and multiyear contracts were not allowed. Effectively, only free-agent signees would be paid entirely by their employing team.

Pooled revenues from radio and television broadcasts would be used to pay players’ salaries before they reached free agency. Perhaps as a result, player contracts were not guaranteed.

A player’s value depended on his position. The pay-for-performance formula divided them into four categories for statistical purposes: starting pitchers; relief pitchers; outfielders, third basemen, first basemen and designated hitters; and catchers, second basemen and shortstops. Ostensibly, these divisions were designed to account for the defensive skill required to play the various positions in the field, and the demands of starting pitching vs. relieving.

The precise pay-for-pay formula was apparently never reported, and perhaps never fleshed in full even privately. According to one report, however, the formula was “weighted heavily toward games played.”

The owners’ pay-for-performance proposal was never seriously considered by the union, a mere stumbling block en route to a 32-day lockout that interrupted spring training. If defensive evaluations weren’t even a component of the best statistical evaluations of the time – early versions of WAR were still a few years away from public debate – it’s no surprise the players were quick to reject them.

The commentary at the time focused less on the statistical shortcomings of the formula, and more on the mere existence of a statistical formula to evaluate players and their salaries. “The device violates virtually every unselfish instinct instilled in an athlete, as evidenced by reaction from general managers and managers, the next of whom to endorse such a plan will be the first,” wrote one columnist. “Why didn’t the owners try a strategy by which any player who strikes out with the bases loaded must walk home from the ballpark? That wouldn’t have been any more absurd than pay-for-performance, and that’s what has to vex the fan looking from the outside in at the Stalemate of ’90.”

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Now that the various incarnations of WAR are part of the vernacular, the idea of tying it to player salary is less vexing. There is no consensus around which version of WAR is the best, or that any version accurately captures a player’s worth. There ought to be consensus that the quantitative tools we have today are far better than what we had in 1990. The question is, are they good enough to help Wander Franco get paid what he deserves – or close to it?

As the clock ticks on another Collective Bargaining Agreement, shoehorning WAR into a palatable mechanism for determining salary requires compromise from both sides. Players would have to concede that even if no perfect metric for evaluation exists, the metrics we have today are a worthwhile starting point for negotiation. Owners must accept that, if the system of salary arbitration is non-negotiable, using one or more versions of WAR as a basis for paying pre-arbitration eligible players is worth revisiting again today, 31 years after it was last proposed by MLB.

At least one person on the owners’ side should be familiar with how far baseball statistics have come since 1990. According to the book “Inside the Strike Zone” by Randal Hendricks, the 1990 pay-for-performance formula had three co-authors: Milwaukee Brewers executive Harry Dalton, New York Mets executive Frank Cashen, and a lawyer for MLB named Rob Manfred.

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