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New baseball labor agreement could hamper Tampa Bay Rays

Call them loopholes. Call them market inefficiencies.

Call them whatever you like, the Rays have forever been on the lookout for ways to keep up with baseball's heavyweights while producing a fraction of their revenues.

So they outspend the Yankees in the amateur draft. They start academies in Venezuela and Brazil hoping to strike gold. They stockpile draft picks through technicalities.

It's all legal. It's all rather shrewd. And it's all now in danger because of the new collective bargaining agreement announced Tuesday by Major League Baseball.

The headlines in this labor agreement may focus on expanded playoffs and testing for HGH, but the true impact could be the roadblocks erected in front of poorer teams.

And that does not even include the possibility of an unbalanced schedule even more tilted than the current one, a change that would be devastating to Tampa Bay in the AL East.

Now it's possible the new CBA will have some loopholes of its own that could be exploited over time. And it's possible some of those changes will not have the exact consequences widely predicted in the past 48 hours.

But it's also fair to say the Rays are going to have to rethink some of their strategies due to changes in the draft, free agent compensation and international scouting.

Here are some examples, in real world terms, of the changes ahead:

Draft cap

Teams are going to be limited to a specific dollar amount in the draft, depending on where they are selecting and how many picks they have. If they go over that cap, they will pay a heavy tax and potentially lose first- and second-round picks the following year.

This is potentially a doomsday scenario for teams such as the Rays if that draft cap is too restrictive. Since Tampa Bay cannot overspend for major-league free agents, the Rays have instead gambled by paying over recommended slots for hard-to-sign draft picks.

For instance, in 1999, the Rays drafted a highly touted prep quarterback in the second round and paid him about $400,000 over slot to leave football behind. Within years, Carl Crawford was one of the best leftfielders in baseball.

In 2005, the Rays drafted a prep pitcher in the fourth round and overpaid him around $250,000 to give up his scholarship at LSU. In 2011, Jeremy Hellickson was the American League rookie of the year.

Just a few months ago, the Rays took Taylor Guerrieri near the end of the first round even though he was committed to the University of South Carolina. They paid him more than six players chosen earlier and may have gotten a top-10 talent as a result.

By limiting how much teams can spend in the draft, MLB is taking away the most efficient method the Rays have for adding high-end talent.

Free agent compensation

The Rays lost a bundle of free agents last winter but took advantage by compiling the greatest war chest of draft picks in baseball history.

Acquiring 12 of the first 89 picks in the June draft took some of the sting out of losing so many players on the 40-man roster. Except, under proposed new rules, that type of haul will likely never happen again.

If you applied this system to last year's draft, the Rays probably would have had no more than six picks in the first 89.

For the past 30 years, baseball has used Type A and Type B rankings supplied by Elias to determine compensation for departing free agents. Type A players netted two draft picks, and Type B players brought one pick. Those Elias rankings no longer matter.

Now a free agent will bring compensation only if his former team offers him a one-year deal equal to what the top 125 highest-paid players make, which is currently around $12 million. In other words, midlevel free agents will no longer bring compensation.

That means the incentive to trade B.J. Upton may be greater today than it was a week ago.

You see, if the Rays were certain Upton was going to get a multiyear deal worth a ton of money on the free agent market, they could offer him the $12 million, one-year deal knowing he would turn it down. That would get the Rays two compensatory draft picks.

But if Upton has a subpar year, the Rays aren't going to offer him the $12 million out of fear he will accept it. And that means he could leave as a free agent, and the Rays would get nothing in return. Thus, trading him this winter might look more attractive.

MLB seemed to understand this was not good news for competitive balance, and so the new CBA calls for a lottery for six sandwich picks after both the first and second rounds of every draft to be distributed among baseball's smallest markets and lowest revenue teams.

International spending cap

The impact of this rule is not going to be immediately felt by fans, but it could be a major blow to Tampa Bay's future prospects.

The Rays have not yet been big players in the international free agent market, but they have slowly built their presence in Latin America in recent years. The idea was that once they had the infrastructure in place, they would have a leg up on other teams.

Now baseball is instituting a salary cap on amateur signings outside the United States — beginning this season at $2.9 million — so the Rays have potentially lost another avenue for high-end talent. To put that figure in perspective, the Rangers spent more than $17 million in international signings just in the past year.

Bottom line

This CBA is not good news for Tampa Bay. It may not be the disaster that some baseball officials are quietly predicting, but it does not help the cause of competitive balance.

At this point, the still-undisclosed schedule could be the make-or-break issue for the Rays. If MLB is truly interested in competitive balance, it will create a balanced schedule that gives every team the same opportunity to earn a wild card. An unbalanced schedule (i.e. more games against the Yankees and Red Sox) just puts the Rays in a deeper hole.

Labor peace is obviously important for baseball in the long haul, but its cost may have been higher than a low-revenue team such as the Rays can afford.

John Romano can be reached at jromano@tampabay.com.

New baseball labor agreement could hamper Tampa Bay Rays 11/23/11 [Last modified: Wednesday, November 23, 2011 10:51pm]

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