Small-market owners finally got Bud to implement a salary-cap on amateurs
Much praise has been thrown the way of MLB & Bud Selig for the new 5-year Collective Bargaining Agreement. I suppose MLB & the Players Association do deserve a collective pat on the back for getting a deal done in a year when the NFL, NBA & NHL have all endured lockouts, strikes and other associated headaches that have hurt the fans of their leagues. However, this CBA has a lot of flaws and despite what many others have said, is not good for big market teams and especially the Yankees.
The union has always fought hard against a Salary Cap but this CBA basically institutes a hard Cap in the Amateur Draft and the International Signing period. It also raises penalties on teams who are over the the $178M payroll Luxury tax threshold for 4 straight years which effects only one team. I’m surprised they didn’t just name the Yankees in that section or call it the NY Yankees Tax. I have seen articles suggesting that this new deal is so great for the Yankees and penalizes small market teams. Dave Cameron of the respected Fangraphs site even went as far to title his article, “Did a Steinbrenner Write the New CBA? (see http://www.fangraphs.com/blogs/index.php/did-a-steinbrenner-write-the-new-cba/). Frankly, I can’t disagree with Cameron more and by reading the below, you be the judge.
Amateur Draft
For the Amateur Draft, each team will be assigned a Salary Pool based on the number of picks they have in Rounds 1-10. The teams with the higher picks will have a much higher Salary Pool to work with. In addition, the bottom 10 revenue teams will enter a lottery to be awarded 6 picks between Rounds 1 & 2 and 6 more between Rounds 2 & 3.
So not only will the low revenue teams get higher picks & higher salary pools, they will also be given FREE picks after the 1st and 2nd rounds! They will also get to sign Major League Free Agents without losing a 1st rounder (the top 10 picks are protected).
Since the Yankees always pick at the bottom of the draft and often lose their 1st & 2nd picks due to signing FA’s, they don’t have access to the elite talent. The only way they can get access to good talent is to draft high risk/high reward, signability guys in later rounds. However, with the new Slotting System and the severe penalties for going over, the Yanks can never do this anymore.
Since 2007, the Yankees have only signed 2 First Round Picks (Brackman #30 & Heathcott #29) yet they are 11th in total Draft spending during that time @ $33.7 Million. How do they spend so much if they never have top picks? They do it by giving Mason Williams $1.45M in Round 4, 5th round pick Greg Bird $1.1M, 14th rd Rookie Davis $500,000, Carmen Angelini $1M in Rd 10 and big overslot bonuses to guys like Betances, Austin Jackson, etc., etc. Now those days are over. Take a look at the penalties for going over your Salary Pool based on the Slotting System:
| Excess of Pool |
Penalty |
| 0-5% |
75% Tax |
| 5-10% |
75% Tax & loss of 1st Rd. Pick |
| 10-15% |
100% tax & loss of 1st + 2nd Rd. Picks |
| 15%+ |
100% tax & loss of 1st Rd Picks for 2 years |
No team in their right mind would ever go more than 5% over their Salary Pool. And does anyone actually think an extra 5% will be enough to coerce a High School athlete to forgo a Full-Ride scholarship to play QB at LSU or Point Guard at North Carolina? Baseball is going to lose more athletes to NCAA Football & Basketball. No one was thinking of the rights of amateur players in this CBA.
International Signing Period
Well, since the Draft is now shot as a way to add young talent for the Yanks, at least they have the Latin America markets still, right? Nope, not anymore. The Yanks are consistently among the top spenders on the International market. Last yr they were 2nd to only Seattle spending $5.27 Million on bonuses. Well let’s look how MLB has blocked the Yankees now.
In 2012/13, each club has a maximum Salary Pool of $2.9M to spend meaning the Yanks have to cut their spending nearly in half. Then, starting in 2013 the clubs Signing pool will be based on Winning % with the bottom teams getting the most money to spend and the top teams like the Yanks having the least. So basically, in 2013 the Yanks will have less than almost every team to spend on International Players. And the penalties for exceeding are virtual death sentences the following year. So, no more Gary Sanchez for $3M and likely no Jesus Montero’s for $1.6M , etc. Here are the ridiculous penalties for exceeding the International Salary Pool:
| Excess of Pool |
Penalty |
| 0-5% |
75% Tax |
| 5-10% |
75% Tax & can only sign 1 player over $500,000 |
| 10-15% |
100% tax & No player can sign for over $500,000 |
| 15%+ |
100% tax & No player can sign for over $250,000 |
Luxury Tax
Some argue that since big market teams can’t spend in the Draft or International Market, they will then spend more on the MLB level. Well that might be true for most teams. The Luxury Tax threshold increases from $178M to $189M in 2014 and the tax for 1st time offenders drops to 17.5% with the rates remaining unchanged for 2nd & 3rd time offenders. The only Tax rate that was raised was for 4th time offenders who now have to pay a full 50% tax on every dollar spent over $178M. That applies to no one but the Yanks who have been over $200M for 4 yrs.
So, I really don’t understand how these new provisions are supposed to give the Yankees an edge. They now will have less money to spend than almost any teams in the Draft or IFA Market plus the small market teams will get bonus picks just for being in a small market. Then to top it off, the Yanks will see a 10% raise on their Luxury Tax bill. If the Yanks are smart they will take the excess money that they can no longer spend acquiring amateurs and spend it on more scouting. That will be the only way for the Yanks to find hidden gems since they can’t out-spend or take the huge signabilty risks.
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