How to Fix Baseball - Part 7 - UPDATE

With the signing of Kyle Tucker by the Dodgers, what was a low rumbling among fans for changes in the game has now become a loud roar.

Caps, floors, deferrals, cheap owners, rich owners ruining baseball.  Conversation on all these topics has ramped up in the last few days. 

I wrote a 6-part series last month on how to fix baseball in the new CBA, an agreement will be negotiated after the 2026 season. 

This article summarizes those articles and, prompted by opinions and suggestions I have read on how to fix baseball, provides more details than my previous 6 articles did.  So let's dive in.

NOTE: I may be updating this document as more information and ideas become available.

SALARY CAP

I wanted to start here because this is the shortest discussion.  It is a non-starter with the MLBPA, IMO. While it wouldn't be hard to get 2/3 of the owners to vote for some version of a cap (say, $275 million), I think it is safe to say the players won't allow this to go through unless they get huge concessions in other areas that they won't get.  While certain provisions (e.g., being able to exceed the cap if you are extending your own players) might make a cap more palatable to the MLBPA, I just see a cap as a non-starter.  

So, if you can't stop overspending let's find ways to catastrophically penalize teams that do overspend.

• Set the luxury tax threshold at $275 million for the 2027 season (for 2026 it is set at $244 million). Teams exceeding the threshold will:
• be charged 100% of the excess in the first violation and $200% of the excess for exceeding the threshold 2 or more years in a 3 year period.
• lose their top draft pick for the next year if they exceed the threshold and their top 5 draft picks for the next year if they exceed the threshold 2 or more years in a 3 year period.
• not be able to sign a QO free agent for the next season after their last occurrence of exceeding the threshold.
• not be able to sign an international professional free agent for any more than a $5 million AAV for the year after they exceed the threshold.
• not be allowed to sign any FA for more than $10 million AAV in the next season if they exceed the threshold for 2 years in a 3 year period
• Draft pick penalties that come from exceeding this threshold will not be minimized due to other penalties for the same team related to draft picks (e.g., signing a QO player).  Rather, the penalties would be imposed in subsequent years so that the full weight of the penalty would be felt.  For example, a team losing their 2nd and 5th picks in the draft could not be changed to them losing their 3rd and 6th picks in that draft because they have another penalty.  One of the penalties would be assessed in the subsequent year so that the full weight of the penalties would be realized.

• AAV 
• AAV will be all inclusive without any deferrals or other mechanisms that have previously been allowed to lower (or not raise) AAV.  
• AAV for foreign professional free agents will include the posting fee to their foreign club

SALARY FLOOR

• A salary floor will be set at $120 million for the 2027 season and rise by $10 million a year for the life of the next CBA, [NOTE: The goal here is avoid teams not spending money on payroll. It is NOT to cause teams to overpay meh FAs or AAAA players just to reach the floor. The intent is for encourage them to sign their own players to extensions and sign quality free agents, if desired, to meet the floor]
• Other measures for amateur player acquisition will be put in place (see below) to ensure that teams spend on acquisition of the best prospects they can to help with competitive balance.  

NOTE: Some of this is in opposition to MLBPA's position which is to give more players more money, regardless of a player's limited ability or usefulness to make a franchise more competitive.  A cornerstone of my proposal if for teams to use some of their floor to extend their own players and bring in free agents who they feel would benefit their competitiveness.  At the same time, teams need to be allowed to fill their 26- and 40-man rosters with prospects who they feel can help them win now but, moreso, in the future instead of clogging rosters with meh FAs or AAAA players just to get over the salary floor. Under the PLAYERS GETTING MORE REVENUE section below I suggest that the minimum salary for players be raised to $2 million for first year players and $2.5 million for 2nd year players.  Those players would realize, on average, almost $2.5 million in increase earnings over their first two years in the majors compared to the present system.

INTERNATIONAL AMATEUR DRAFT

• An international draft would replace the January 15th signing period.  The goal of this draft would be to distribute the better, eligible talent to the clubs with bad records in the previous major league season (similar to the Rule 4 draft) AND eliminate teams reaching 'agreements' with players years before those players are eligible and eliminate the shadiness of interactions with local trainers, etc.
• The draft will consist of 5 rounds with the order being the inverse of standings for the previous year. NDFA can be signed after the 5 rounds for $10,000 or less.
• MLB will create a bonus pool for each club just like they do for the Rule 4 draft.
• MLB will have a combine similar to what they do for the Rule 4 draft for the top 250 players and will be involved in ranking those players before the draft for the benefit of fans and, to a lesser extent, teams.
• Owners of revenue receivers must spend >90% of their bonus pool the first year of the new CBA going up to 95% in subsequent years, not counting the money spent on NDFAs.  The trading of international free agent bonus pool money will no longer be allowed.

CHANGES TO THE RULE 4 DRAFT

• Maintain most of the current rules for draft pick compensation but weave in a few new rules and the luxury threshold penalties described above
• Change the construction of a draft order as follows.  
• 2 teams with the worst records flip a coin to see who drafts first and second in the first round
• The rest of the first round and all subsequent regular rounds will be ordered as follows:
• Non-playoff, teams that receive picks in the competitive balance round draft first in order of decreasing payroll
• Non-playoff teams who are not revenue payors or receivers draft next, again in order of decreasing payroll
• Non-playoff teams who are revenue payors draft next in order of dcreasing payroll
• Playoff teams that receive picks in the competitive balance round in order of decreasing payroll
• Playoff teams who are not revenue payors or receivers draft next, again in order of decreasing payroll
• Playoff teams who are revenue payors pick in the order of decreasing payroll.
• Competitive balance picks and draft compensation pick rules will continue as is.
• As indicated above under SALARY CAP, change rules on draft pick compensation where a team is already penalized in a particular year and a second (or more) penalty in the same year would result in a lesser penalty.  Instead, have the penalties spill over to the next year(s) so the force of the penalty would be the same for each offense, just in the next year(s).
• To spur owners of small market, limited resource franchises to spend money on development, give every revenue receiver and the worst 2 teams, record wise, in baseball the previous year an extra $5 million in their bonus pool.  These teams must spend between 99-104.99% of their bonus pool or suffer a $10 million penalty
• Eliminate the trading of draft choices before the 11th round but allow up to 3 draft choices (in rounds 11-20) per team per year to be traded.  

CHANGES TO THE RULE 5 DRAFT

• The major league rule 5 draft will be discontinued
• The minor league rule 5 draft will continue as before from the same pool of players as previous minor league rule 5 drafts
• See the CHANGES IN PLAYER CONTROL section below for specifics to address what the ML R5 was supposed to address, but failed and that international players can be signed when they are chronologically, the age and physical development of high school sophomores.

NOTE: The goal here is to allow teams time to develop their players without having to roster some of the best ones long before they are major league ready. My data says the ML R5 is a failure but the minor league R5 draft has some benefits in limiting the number of minor league players a team can hoard.  This also will allow teams to sign minor league free agents after the end of a season without having to worry about losing them in the subsequent R5 draft. Finally, it will free up 40-man roster spots for players who can actually help a team in the next competitive year instead of having a roster spot wasted for 2-3 years on a player who is not close to being major league-ready.

CHANGES TO PLAYER CONTROL

• Players acquired who were not previously in organized professional leagues (domestic or foreign) can be controlled by teams per the following, based on their age when signed, before they can become minor league free agents:
• Players 16 or 17 years old for 7 full seasons
• Players 18 or 19 years old for 6 full seasons
• Players 20 or 21 years old for 5 full seasons
• Players 22 or 23 years old for 4 full seasons
• Players 24 or older for 3 full seasons

PLAYERS GETTING MORE REVENUE

• Increase the minimum wage to $2 million for first year players and $2.5 million in their second year.
• Continue the arbitration system as is.
• Mandate that teams spend 90% of shared revenues on payroll + amateur player acquisition costs
• Allow forensic accounting to make sure that the split of shared revenues is actually going to player salaries and acquisition costs.  Don't let teams participate in revenue sharing unless they can show that they meet these reinvestment metrics.