Saturday, January 17, 2009

A Modest Proposal

I've been ruminating over the salary cap debate and the MLB labor wars in general as I'm reading Brad Snyder's excellent book on Curt Flood's fight to end the (in my view unfair and exploitative) reserve system in baseball, "A Well-Paid Slave," and I think I've figured out what I think would be the fairest way to compensate players.

First, players would be paid by the league, not their team. A fair share of the league's overall income (something on the order of 55% would be typical for pro sports leagues, although personally I would argue that the players are entitled to at least two-thirds of the value of their labors) would be automatically dedicated to player salaries. If league revenues rise, then the overall pool for player salaries would rise too; similar, if the league struggles, players overall take a pay cut. You have an independent accounting firm crunch the numbers and there's never any negotiating to do at all. This would ensure both that the players are getting a fair share of the league revenue (and not more) while also eliminating the competitive imbalances once and for all.

Then, players would be paid annually based on their performance. There would be some base salary that every player would get (currently it's a little under $400k, which seems probably in the ballpark), and then players would get assigned a "value rating" based on their performance. You play better, you get a bigger check at the end of the year. It's that simple.

In today's era of statistical analysis, there are very good metrics that would provide accurate, fair, reliable measure of player value. For hitters you could simply do wOBA x PA. For pitchers you could do tRA* or FIP x innings, and maybe add a leverage value. Or WPA for relievers. Or you could just use VORP for everyone. Fielding is probably the one area where the stats still are pretty hit-or-miss, but you could negotiate a system based on Dewan's plus-minus, Rate2, UZR, and/or PMR that would be reasonably fair to all. You could build in some additional bonuses for team record as well.

Let's not debate which stats are best or even the validity of statistical analysis in general--the union and management would just have to agree on something. It doesn't really matter, as long as everyone's reasonably satisfied that an objective system for player valuation exists. And if these people are satisfied with Elias's free agent types, then their expectations for reliable player valuation ain't so hard to meet.

Once you have your value rating set, paying salaries is just a matter of doing the math and divvying up the earnings at season's end. No one's ever underpaid or overpaid. If you are a rookie and play great, you get a big paycheck. If you're an aging vet and crater, you don't. All the inefficiencies in the system are wiped out in one fell swoop, and the perverse incentive to drive profits by fielding cheap and inexperienced teams is done away with.

All that's left for GMs is to evaluate players well, and all that players have to do is play well.

This might seem totally foreign, but it's actually pretty similar to golf or tennis, where if you win the tournament you get a big cash prize. Only team sports have this system where you determine a player's salary up front, which is really a relic of the days when players had virtually no say in their salaries at all.

So that's my proposal. Tell me why it's dumb.


JayB said...

The problem is that Baseball is a team game, not like golf or tennis where you play for yourself. The any Stat you suggest does not take into account the value of a player in a team setting well enough. If you get paid for your stats and not all the intangibles of baseball then the game suffers. This is a constant point of contention between your approach to baseball and mine. Reading your stuff as been great for me to open my thinking but in the is not about stats only....and your desire to make it a game that can be played in Excel is just not doing it justice.

sid bluntley said...

Then how would free agency work? Or would it exist?

I am starting to think a combination of higher luxury tax with a salary floor would be the best way to go.

Anonymous said...

It's an interesting idea. I don't really like it. I think baseball players are fairly compensated. Some could argue that the arbitration system causes players with tenure to be over-compensated. This system would completely devalue tenure and punish role-players. It's actually worse for the players. For the owners, it's basically sanctioned collusion, so they'd love it. The idea is just too complex. I'd support a NFL-style hard cap, but that's never going to fly with the MLBPA or the top clubs. I like the idea of letting a team exceed the cap to sign their own vets, too. None of it will ever happen, though.

Keep in mind, the luxury tax and shared TV revenues keep small and poorly run clubs in the black. There are effectively two-tiers of clubs. The top tier have the resources to be competitive every season and there success feeds the rest of the league. The second tier build modestly and can make a run every few years. (Or they can suck eternally and pocket the money like ours.)

e poc said...

Maybe I'm misunderstanding, but how would players be assigned to teams? Would you just have to be on the team that drafted you unless they traded you? Isn't that less freedom than exists now, and the same amount as under the reserve clause? You'd just be making players more well-paid prisoners (I find the use of the word "slave" in this context a little objectionable). Unless I'm missing something.

Steven said...

I would just leave the rules about free agency and team control the same as they are now, except salary isn't a factor. So if you draft or sign an amateur, you control him for 6 years. This I think is fair because the team has a right to recoup the value of their player development investment. Then after 6 years, the player becomes a free agent and can sign with anyone they like. Money just isn't part of that. So a guy like Tex might decide to play for the O's to be close to home. A guy like Sabathia or Sheets might just stay where they are because their kids are in school or whatever. A guy like Tim Redding might leave DC because he thinks he's going to get bumped from the rotation by Zimmermann anyway. Nick Johnson maybe would sign with an AL club that promises to DH him. Some people might choose NY or Chicago for the endorsement value. Or they might avoid NY like the clap because of the media criticism.

@epoc--the "well-paid slave" like was Curt Flood's, and it was very controversial at the time too.

@max--I don't believe players are overpaid. I think they are if anything underpaid, espectially players in their first 3 years. Cole Hamels leads his team to the WS, earning tens if not hundreds of millions for the Phils, and he gets 400k? Why is that fair? Baseball is a huge moneymaker, and I think the players should get most of that money because it's their talent generating the value. Do you think Bruce Springsteen is overpaid? Thomas Kinkead? John Grisham? If you say they are, then maybe you're just kind of a pinko. But if not, what's the difference between a ballplayer and one of these artists/writers? They produce a product people want to consume so a lot of money comes in. Why begrudge them? Do you think Ted Lerner deserves that money more? Or Bud Selig? Cuz every dime that's not in Ryan Zimmerman's pocket just goes in Uncle Ted's, and he certainly didn't do anything ot deserve that money except be lucky enough and politically connected enough to be awarded the franchise.

An Briosca Mor said...
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Steven said...

Who would have thought, after all these years, JayB and AMB are united in anti-SABR-ism.

Of course baseball is ultimately all about stats--runs and wins are the stats that ultimately matter.

The goal would be to create some way of paying players based on performance. If you don't think players should be paid based on performance, then we disagree.

If you're a big believer in intangibles you could allocate X% of the revenue to be distributed by managers to reward leadership. This is what happens in most workplaces--leadership bonuses for intangible contributions. Or as I proposed in my original post you could have some amount set aside to reward teams that win divisions, etc.

But the measurables undeniably capture at least a substantial portion of player value. It's silly to argue otherwise. I would argue that it captures 98-99% of player value, but I'm an extreme skeptic of the importance of "leadership" and "chemistry" in baseball. Those are more important in games like basketball, hockey, and football. But baseball is more a series of individual match-ups than a true 'team' sport.

Hendo said...

Not paying for performance is why the players and owners are taking turns getting screwed (news flash: thanks to the economic downturn, it's the players' turn).

Incentive plans have historically been troublesome, because in addition to incenting players they also incent management to depress players' statistics through underutilization. What is proposed here would probably avoid that problem.

Intangibles is just another rubric under which a player (that doesn't have them, whatever they are) can be screwed. Leadership? Where you lead is on the field, tangibly helping your team to win. (Problem children can and should be dealt with through league discipline.)

If we must throw a sop to the Murray Chass / Joe Morgan types, I suppose we could pay for hit-and-run plays, sacrifice bunts, and other "productive outs"; as Steven says, it's all in the math. Then again, we probably shouldn't: any sensible compensation redesign needs to retain something to satisfy the "purists," conspiracy theorists, etc.

An Briosca Mor said...
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Steven said...

@ABM--Charmed as always. See you back here tomorrow!

Wil Nieves said...

Doesn't your proposed system give teams (a lot) less of an incentive to treat their players well, in terms of health and development because there's less of a contract system? When a team signs a long term contract with a player, they don't usually want him to pitch on three days rest, a la CC, or things similar to this. In addition to creating incentives for ownership to get the most value out of a player, it creates additional incentives for situations like Willy Mo, who played through pain without telling anyone when it probably would have been better for everyone involved to treat the problem a lot sooner (because under your system, it would likely have a direct impact on his paycheck to sit out games).

Also, what would baseball enthusiasts do in the offseason? All the free agency creates opportunities for excitement year round.

Steven said...

No, I don't think there'd be any disincentive to treat players well. If anything, there would be more of an incentive because you need to make your franchise attractive to players through other means than salary. Also, I tend to think there'd be less player movement overall, because I think all things equal players would be more likely to stay where they are now. So teams would have no less incentive to try to keep people happy and healthy.

The offseason would be the same. Salaries just wouldn't be at issue. FAs would decide where to play based on other factors--geography, PT oppys, friends, family, managers they respect, etc.

Rob B said...

My main problem with this is that it would rob me of the satisfaction of watching the Yankees throw billions of dollars at big-name players so they can win a WS as often as the Marlins.
I like the current system because it rewards teams for hiring the right scouts/coaches/ front-office personnel and making smart business decisions on how to use capital. (Of course, as a Nats fan, I can only say that I have heard that somewhere these mythical qualities DO exist.)