New MLB CBA Could Hurt Rays

Major League Baseball's newly signed Collective Bargaining Agreement will make some drastic changes in the game. Inside I analyze how the new CBA will effect the Tampa Bay Rays organization in the long run, and how it could potentially hurt the team and force the franchise to develop new strategies for acquiring talent

With the new MLB collective bargaining agreement, the way the Tampa Bay Rays do business could potentially change. Well known in the league for their track record of successful scouting and drafting of young amateur players, the new agreement between Major League Baseball and the Players Association puts a major roadblock in the Rays strategy.

Although the addition of an extra Wild Card team in each league will presumably help the Rays make the postseason each season in a division that includes perennial contenders like the Yankees and Red Sox, most of the agreement doesn't seem to favor small market teams such as Tampa.

The new CBA will limit the amount of money that teams will be allowed to spend on draft pick bonuses in the first ten rounds. Often high school draftees are convinced to sign with a Major league team over going to a college because of the allure of big money. The Rays have focused a significant portion of their spending on bonuses over the years, allocating large dollar amounts to 18 and 19 year olds to convince them to sign contracts. With the new agreement, the Rays won't be able to invest as heavily into signing bonuses, as teams that go over the set amount will be heavily taxed and/or lose future draft picks.

According to the new CBA, team's will be assigned pools of cash to spend on signing bonuses according to the slot value of their first ten round selections. Each pick is assigned a value, and all picks are then added up to make up the team's signing pool. If a team goes over that pool amount by 5 percent or less they will be charged a 75 percent tax. An overage of 5 to 10 percent will also be subject to a 75 percent tax and also the loss of a first round pick. Going over a pool amount by 10 to 15 percent will subject a team a 100 percent tax with the loss of a first and second round draft pick. If a team goes over the pool amount by 15 percent or more, they will have a 100 percent tax levied while losing first round picks in the subsequent two drafts.

In 2011, the Rays would have had a pool of $9,620,300 through the first five rounds (No slots available past that), according to the new Collective Bargaining Agreement. The signing bonuses of those 15 players added up to $10,504,400 or 109 percent of their pool. For a team that already has limited finances and has to be careful of their expenses, the Rays spent more than the slots suggested. This would have cost the team a 75 percent tax and the forfeit of their 2012 first round selection.

As the Rays can't afford to sign expensive free agents, losing future draft picks can hurt them more than other teams in the long run. Tampa Bay relies on the drafting and development of prospects and don't have the ability to miss the opportunity to sign drafted players. Money is also an issue, as it will be hard to afford the tax that the MLB now charges. This could cause the Rays to intentionally not sign some of the players they draft in future years. The Rays are known to pay over-slot to players, and this new system only makes it harder to establish a deep farm system. The only thing that could help this situation is a drastic increase in the slot value that the MLB will assign, which could give teams more wiggle room.

Another part of the new part of the agreement is a cap on the signing of international players. The Rays have invested big money in scouting international free agents in South America and other continents, and with the new cap their ability to dominate the foreign market will be limited. Organizations such as Tampa Bay have to gamble on international players to develop and become a cheaper option for populating their farm system. With the new agreement the Rays won't be able to look at the international market first without having to pay heavy taxes if more than the cap is spent. Not only does this hurt teams that invest heavily into foreign players, but it also limits the amount of money that those players will make as the money involved in contracts is going to be significantly lower.

According to Jeff Passan of Yahoo! Sports, the cap will be $2.9 million for all teams in 2012. Afterwards, they will be adjusted by the team's winning percentage, which if the current trend continues, will lower the amount of money the Rays have to spend. Tampa Bay only spent $1.73 million on international free agents in 2010, seventeenth most in Major League Baseball. The Mariners led the way at $6.47 million, which is below next year's slot.

If a team goes 0-5 percent over the pool, they will be charged a 75 percent tax. 5- to 10 percent will cost a team a 75 percent tax as well as the right to sign a player for more than $500,000 the following signing period. 10 to 15 percent will bump the tax to 100 percent with the same penalty as 5 to 10 percent. If a team goes 15 percent over their signing pool, they will be charged a 100 percent tax while losing the right to sign a player for more than $250,000 the following year.

Although the Rays haven't spent much money abroad, this could hinder such transactions in the future. As international free agency continues to grow, MLB has put a big limit on bringing foreign players to the United States. This will help get more US players into baseball, which ultimately is Major League Baseball's goal.

The new collective bargaining agreement seems to be taking a lot of heat from the national media. Rays president Matthew Silverman announced last week that the team will take time to evaluate the new restrictions and discuss new strategies going forward. Certainly the way the Rays have handled business over the past few years brings optimism to the table as they continue to work on new methods to remain competitive.


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