by Michael Jimenez

The new collective bargaining agreement signed last winter drastically changed the landscape of Major League Baseball.  Over the last few days we have witnessed firsthand what many feared regarding the amateur draft changes that Bud Selig forced in the new CBA (not familiar with the new rules? I have a quick description at the bottom of the page). Over the upcoming weeks we will see how the changes to free agency also affect one of the most exciting times of the year – the July 31st trade deadline.

The new draft rules struck quickly as the Houston Astros shocked the baseball world by choosing Carlos Correa instead of highly touted pitcher Mark Appel, who slid all the way down to the 8th selection.  Rumors floated that Appel, a Scott Boras advisee, rejected a 6 million dollar proposal before the draft (official offers to undrafted players are technically against the rules but finding a way to question what range of money they will and will not sign for is not).  Correa is rumored to be signing around 5 million in the next day or two, so the Astros took the player who would be the easier sign, even though they were rumored to be locked in on Appel for months heading into the draft.  Another issue with the new draft rules is the way teams manipulated their budget by drafting players who would sign for very little in rounds 4-10 to free up some money to spend tough signability guys. This pushed many players who would have signed in previous years to the later round where they almost certainly will not sign for only 100K.  Pushing talent away from the MLB is simply not a smart idea. It is also important to note, these picks can be cut next Spring with no punishment to the team so many of these kids are being used to manipulate draft budgets. 

As for the Cubs picks, the posturing has already begun with their first round selection Albert Almora, when he declared he’s preparing for his college baseball career at the University of Miami.  The Cubs will see some difficulty with signing Almora as he is another Boras client. In past years this dance was just to squeeze every penny out of a team but now there’s consequences. The Cubs cannot exceed slot recommendations without risking further penalty which could cause the team to lose a potential top 3 pick in next year’s draft. 

Looking at the Cubs other picks in the first 10 rounds for the most part they were pretty safe.  The only two players the Cubs drafted that I’ve heard could be difficult signs are Almora and a right-handed pitcher out of high school, Paul Blackburn, who was taken with the Cubs second supplemental pick. So I feel pretty confident we will sign nearly everyone we drafted in the first 10 rounds including Almora, as I doubt the new regime allows their first pick with the organization to slip away. Although, if Almora does not sign, barring some miraculous turn around, the Cubs would end up with 2 of the top 7 picks in a stronger draft next year.  Not a terrible consolation prize; just ask the D’Backs when they snagged (3) Trevor Bauer and (7) Archie Bradley in last year’s draft immediately catapulting their farm system to the upper echelons of baseball.

The Cubs could also be effected by the changes to free agency in the upcoming weeks.  The compensation system has been completely overhauled.  There are no more Type B free agents, and Type A designations are much more selective.  Furthermore, only players who are with their team for the full year before they hit free agency can gain compensation for their old team.  This means teams who trade for a half season rental will not receive compensation if that player leaves after the season.

This could have both positive and negative effects on potential trades for the Cubs.  Ryan Dempster’s impending free agency could hamper what potential trade partners are willing to give up, now that they cannot receive any form of compensation if he leaves via free agency.  Plus, if Dempster, who is pitching outstanding this year, projects to be a Type A free agent, the Cubs may choose to offer him arbitration in hopes that he declines and they receive  two compensation picks.  This might be a more attractive package than what teams are offering as they may be unwilling to part with a package of prospects of similar or better worth than the two high draft picks.  There is risk offering arbitration to a guy like Dempster, as he is on the record of saying he loves Chicago and would like to end his career here; however, lately it seems he is willing to decline his no-trade clause to go to a contender.   There’s a good chance Dempster would decline arbitration to sign a multiyear deal elsewhere.  That’s a risk the Cubs will have to weigh in the upcoming weeks. 

On the other hand, players still under team control should see an increase in value.  For teams, who do not wish to surrender prospects for only  a rental player, they may be more willing to give up those prospects for players who will still be on their team after this season.  This could make a guy like Matt Garza, who still has another season on his contract after this year, more valuable at the deadline than a guy like Zack Greinke who will become a free agent after the season, if Milwaukee makes him available.

It’s going to take some time for teams to get a feel for the new collective bargaining agreement but we are already seeing how the changes are influencing the team.  Now that the draft is over, what did you guys think of the new CBA rules? 

Quick explanation of the new draft rules:

  • Teams cannot offer draft picks major league contracts any more – the Cubs signed previous draft picks Jeff Samardzija and Matt Szczur with major league contracts to lure them away from playing football.
  • The date to sign draft picks has moved up from mid-August to mid-July.  This means we should see the picks playing in the minors this year.
  • Teams have a budget to spend on their picks from rounds 1-10, this budget is determined by MLB’s recommended slot value.  For instance, the Cubs’ #7 pick is slotted at 3.25 million and they have a total budget of 7.94 million for their 12 picks (2 extra compensation picks for losing free agents Carlos Pena and Aramis Ramirez).  If the team does not sign the player from that slot, you lose that money from your budget.  So if the Cubs don’t sign Almora, they would lose 3.25M from their budget and would only have 4.69M to sign their 11 other picks.
  • Picks made in round 11 or later are slotted at 100K, if a pick after round 11 is signed over 100K, it counts against your round 1-10 budget.
  • Penalties for exceeding the Signing Bonus Pool are:
    Excess of Pool Penalty – (Tax on Overage/Draft Picks)
     0-5% – 75% tax on overage
     5-10% – 75% tax on overage and loss of 1st round pick
     10-15% – 100% tax on overage and loss of 1st and 2nd round picks
     15%+ – 100% tax on overage and loss of 1st round picks in next two drafts

The forfeited picks will be given to other teams via a lottery based on teams’ previous seasons’ winning percentage and revenue. These are the only picks in the MLB draft that are allowed to be traded.

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