How To Fix Baseball - Part 5 - Various Changes (excluding playing rule changes)

 OK, in parts 2-4 I have addressed, in detail, the major changes that I think will impact competitive balance:

• Salary floor without a salary cap
• Implementing an annual international amateur player draft (plus associated rule changes to give longer control of those players to give them proper development time). Embedded is the requirement that teams with limited resources have to spend more on these drafts. 
• Significant changes to the Rule 4 draft which focus on improving competitive balance and forcing teams with limited resources to spend on player development by increasing their bonus pool, which becomes the mandatory minimum for them to spend on any draft.

In addition to the above, I want to suggest miscellaneous changes that I think will further improve competitive balance. 

ELIMINATION OF THE RULE 5 DRAFT

A number of so-called experts agree with me. The Rule 5 draft should be eliminated for the following reasons:

• It doesn't do what it was designed to do: give prospects a path to the majors that they might not have if they languished in a farm system of the team that signed them. Very few prospects come out of the Rule 5 draft to become impact players in the majors.  Looking over the history of this draft, an argument can easily be made that almost every player who came through the Rule 5 draft and had ML success would have had that same success in their original organization or would have changed organizations via trade and get their ML opportunity that way.
• It creates undue stress on ML organizations trying to decide which players to protect each off-season by the November roster freeze deadline.
• It can needlessly start the option clock for players who are drafted  very young (e.g., international amateur FAs) when those players are not ready for the major leagues.  
• There is some real evidence that shows that being drafted in the Rule 5 can actually stunt a prospect's development, especially if they are kept by the drafting team. In addition, there is needless psychological impact on players who are not placed on the 40 man roster.
• Hoarding of prospects has already been addressed by limiting the number of prospects a team can have in their organization.  This limitation has already led to teams releasing more players from their rookie and low A teams faster than they have before the rule.
• Areas addressed in Parts 2-4 are designed to naturally lead to teams with limited resources having a greater number of quality prospects than they have had in the past.  This advantage would be somewhat negated if those prospects were exposed to the Rule 5 draft.  Bringing prospects to the major leagues is a game of attrition.  Teams with limited resources have to rely on their farm systems for players so the more prospects they have, the greater likelihood there is of having some of those prospects turning into impact players.

So, eliminating the Rule 5 draft with the associated November roster freeze would likely be a plus to most organizations without any loss or gain in competitive balance if the draft is eliminated.

CHANGING THE RULES ON TRADING DRAFT PICKS

In Part 4 I already suggested that trading of Competitive Balance picks should not be allowed as those picks are reserved for teams that are resource-limited.  Allowing small market teams to trade those picks is the opposite of what my changes are proposing, which center on making small market teams spend more money on development and retaining their young major league players.

In fact, as I mentioned in part 4, I am against teams trading ANY draft picks in the first 10 rounds of the draft where the picks are used to generate the draft bonus pool for each team.  History in other sports has 

What I would like to suggest here is that picks in rounds 11-20 become freely tradeable.  These picks likely would have greater value in trade than they have actual value as draft picks.   A possible change to the rule I am proposing would be to not allow competitive balance teams to trade draft picks at all as that would be a way for them not to spend money on player development.  However, they could get around this rule simply by drafting players in rounds 11-20 that have no intention of signing so I am not inclined to include this proviso in my proposal.  Competitive balance teams will quickly find out that they will have a harder time using up all their bonus money if they don't draft players in rounds 11-20 who require bonuses that count against their bonus pool.

INCREASNG THE NUMBER OF COMPETITIVE BALANCE TEAMS TO 15 (up from 10)

There are a lot of teams just outside the competitive balance group that need to be spending more money on their team.  If we increase the number to 15, providing teams 11-15 with 1/2 the revenue sharing dollars teams 1-10 get and tax the large market teams and teams exceeding payroll amounts by some fraction to cover the additional 5 teams, we could pump more money into the bottom teams in the league, as defined by revenue. Concommitant to getting more money, teams 11-15 would have to spend $2.5 million more on the draft and 1.5 million more on signing international amateure free agents.

FIND A BETTER WAY TO CALCULATE AVERAGE ANNUAL VALUE (AAV)

We need to simplify AAV so that the hit against the luxury tax does not improve with deferrals.  In each CBA negotiation there are sticking points that one side or another does not want to budge on.  In my opinion, closing this loophole would only be offensive to a few large money teams and a few players.   There is no way a contract with a real AAV of $70 million a year should present as a $46 million salary just because of deferrals.  

Also, I believe that posting fees should count against a team's payroll.

FInally, I believe that other loopholes that may exist should be closed.  For example, I am not sure if ALL bonuses paid by a team to a player are counted against the AAV of the player's contract.  If this, or other loopholes exist, they need to be closed so we get a true view of what the luxury tax should be.

FANS SHOULD GET TO SEE THE REVENUES VS RE-INVESTMENT NUMBERS

Probably the most controversial thing I am proposing and one with the least chance of success being included in the next CBA, there is so much talk among fans about how much an owner or owners group for a team is taking as profits and how much of their revenue they are reinvesting in their team.  

Therefore, I think an independent auditor should be assigned to generate an impartial accounting of the exact percentage of their revenue a team is reinvesting in their team.  While this has to be available for every team my suggestion is really targeted towards teams getting revenue sharing.  The perception still exists among most fans and the media that teams may be skimming profits instead of reinvesting in their team.  When someone buys a sports franchise, in my opinion, they are buying a toy to play with, not a business to make money.  Businesses cut corners to make profits and what I am suggesting is that baseball teams not be allowed to do that.  One of the most important things for fans is to know if they are investing their dollars going to games that revenue is being applied to make the product (their team) better.  

Note that I am suggesting publication of 4 numbers for each team: total revenues, dollars re-invested in team salaries and other forms of player acquistions (e.g., the draft(s)), amount of revenue going to other costs within the organization and the total of revenues that are not spent on the team (e.g., taken as profits or capital improvements).  Forensic acccountants know much more about this stuff than me but it just seems, without getting into the weeds, we should be able to publish these numbers for fans to see.  This, in turn, would pressure certain owners to spend more on their teams.  

INCREASE MINOR LEAGUE PLAYER LIMITS FOR CERTAIN TEAMS

Currently each major league team is limited to 165 players total in their minor league system.  I propose raising that limit by 10 players (to 175) for the 15 teams that are designated with the least resources in baseball, with a concomitant increase in roster sizes at AA and AAA by 5 each.  Teams do not have to raise their overall roster size but, if they choose to do that, it gives them extra space to add minor league free agents to provide more minor league depth options.  While this won't greatly impact competitive balance, it will give limited resource teams a leg up on depth guys at AAA to help in emergency situations.

RAISE ROSTER LIMITS FOR CERTAIN TEAMS

Allow the 15 most resource0limited teams to have a 42-man roster all year, giving them an advantage over other teams.  Obviously, this would raise the total payroll for these teams but it would also allow them to have more roster flexibility to strengthen their 26-man roster during the season. This would also help in the off-season when 60-day IL players had to be added back to the roster as fewer players would have to be DFA'd.  In addition, it would be obvious if teams did not take advantage of this that they were being cheap. Finally, this would likely not be used for prospects as that would start their option clocks so teams would likely use these spots for AAA depth options, at least in most cases.