HARD BALL OFF SEASON

When the Braves won the World Series, baseball has less than a month left on its existing Collective Bargaining Agreement (CBA). The existing CBA expires on December 1st. There have been no reported movement between the players union and the league.

But there are still deadlines to meet.

Before December 1st, teams need to submit their qualifying offers to free agents to accept a one-year ($18.5 million contract) or hit full free agency (with a possible penalty to the new club in lost draft choice). 

Before the contract expires, teams need to finalize their 40 man rosters and submit them to the league to hold players out of the December winter meetings Rule 5 draft.

Also, teams have to submit arbitration notices to eligible players or lose them to free agency.

Some teams may also be looking to their financials to get under the luxury cap as it affects their future draft and international money pools. 

But all of those items are under the backdrop of uncertainty. No one knows what the next CBA will look like. The owners floated the idea of lowering the luxury tax (which is a default salary cap) which will be rejected by the players. The owners floated the idea of revenue sharing percentage with players, but players reject that notion because it does not include "all" income sources from affiliated enterprises such as parking, etc. The players will want to raise the minimum player salaries and stop GMs from manipulating service time so players free agency is held off an extra year. The union may want to reduce the years to get to free agency,which some owners will reject since that would adversely effect their bottom line. 

Teams are using younger players which means those stars hit free agency faster. Teams have started to "buy out" arbitration years in sweetened rookie contracts, but those rising star players may hit free agency TWICE during their career which could be problematic down the road as MLB must see that overall revenues are at a plateau.

As the NFL gets greedier by making deals with streaming services for games, it is yet to be seen if fans will actually follow those kinds of broadcasts. Likewise, MLB has hinted that it wants to get out of its own broadcasting venture (MLB.com). Many teams, including the Cubs, have found running their own team channel/network not the huge profit center that cable provided with super-stations two decades ago. 

It is probable that most teams will not make any big moves until there is a new CBA. Why commit to large payrolls or long term contracts if free agency is going to change or the unlimited payroll budgets could be significantly reduced to a hard cap?

The hard financial outlook will be the center of the tug of war. It is clear baseball is not growing revenues like it used to. MLB owners still want total control of their product (and profits) as it did in taking over the minor leagues. But there is only so much blood you can squeeze out of a turnip.

THE NEW OLD SYSTEM

For the past week, team equipment trucks have been motoring to Arizona and Florida. Spring training begins in about a week.

But about half of the Top 50 free agents remain unsigned. And the prospects of mega-deal long term contracts are fading fast.

The new free agent dogma is actually the renewal of the old ownership system. Way back, teams used to be owned by individuals or families. The baseball club was their sole business. They operated it like a mom and pop store. If they could get by cutting corners (player salaries) to make a profit, they made a profit first.

Small market clubs still operate under that guide line. Low attendance, small fan base, and lower local television deals means these clubs are under financial pressure against signing a player to a large contract. But under the CBA and baseball rules, all the small market teams have enhanced revenue sharing from the league, and extra draft picks to acquire "cheap" young talent to remain "competitive."

General managers now covet draft picks because they can retain a player for six years (three in arbitration) at a relative small cost. The farm system is now the most important aspect of the operations. If you can draft and develop talent consistently, your team can be frugal, competitive and profitable.

In order to do so, teams now "tank" more often to obtain higher "can't miss" prospects. It is okay to tank if you have very little fans to complain (see, Marlins.)

You have now about one-third (1/3) of MLB clubs at the bottom in salary budgets, many whom have little desire but to tank to acquire top ten draft picks.

You have the top four spenders, big market clubs, who are at the luxury cap limit of $206 million. These previously annual big spenders do not want to go over the salary cap because of the financial and draft penalties. To take on a salary like Harper's $30 million/year $300 million total, it could cost a team over the cap as much as another $300 million in penalties over that ten year period. To avoid that, the team would have to off-set or cut $30 million a year for the duration of the contract (which some GMs would classify as three veteran players or four quality relief pitchers in value.)

The rest of the clubs position themselves to spend $100 to $150 million per year. If their division is weak, like the AL Central, they could be in contention most of the season (thus validating their "plan" to their fans). Fair weather fans might return so everybody is happy. But with an average starting pitcher making $10 million, a team could have almost one-third of their payroll in a rotation. That leaves an average salary of $4 million for every other player on the roster. That is why prospects being paid the league minimum ($555,000) are so important as they free up money to sign or retain veteran players (second tier).

Player agents may be late to recognize this new paradigm being the old system before steroid fueled free agency. Teams now have the MBAs, computer geeks and stat analysts crunching big data to find that players over 30 in the non-steroid era are not as valuable or productive going forward. So many teams have been burned by long term, dead money contracts to be gun-shy about signing another player demanding even more money.

It seems that Harper's foray (or folly) into free agent basically ended when he rejected the Nationals pre-free agency extension of $300 million/30 years. Machado has not formally rejected the White Sox $175 million offer, but it seems no one else has topped it. The Phils said they would spend "stupid money," and if that was the case Harper and/or Machado would have had last month a press conference in Philadelphia. Agents must be frustrated by the "take it or leave it" offers from teams (who are giving their best contract first without being pushed and pulled by other teams or the agent.) Free agency is no longer a live auction between teams. It is more like a Priceline value search.

WAIT TO NEXT YEAR

The hot stove league is colder than the outside temperature.

There have been many reasons and theories floated about on why several marquee free agents have not signed contracts a month or so before pitchers and catchers report to spring training.

Player agents think "collusion" by owners in trying to cut down player salaries.

Teams retort that they are being cautious about spending, especially the big market spenders like the Yankees and Dodgers who have been aggressively managing their rosters to get under the luxury tax threshold. The CBA's luxury tax is a soft salary cap - - - it does not stop a team from over spending that amount, but it comes with increasing severe penalties including loss of draft picks.

Under the current trend, baseball draft picks are more important than signing a old free agent. General managers believe in the mantra of "controllable" players - - - young stars that the team can hold onto for six seasons. A team with a core group of players in their mid-20s (like the 2016 Cubs) can win a championship at league minimum salaries. The league emphasis now is on drafting and developing home grown players, and pushing them through the minor league system faster.

Owners are getting leery of having large amounts of "dead money" on the books. A veteran free agent wants more years to their final contract than their performance. Teams used to view the extra two years on a long term deal a player "bonus." But with the tax ramifications and the looming prospect of broadcast revenue going down (as cable viewership and advertising rates to drop by 2020), owners do not want to be spending tens to hundreds of millions of dollars on players who are no longer on their roster.

Some teams are also gearing up for tax code changes. Two have been touched upon briefly in the media: new depreciation rules and entertainment deductions. Under the Bill Veeck Rule, baseball teams were allowed to depreciate player contracts (Veeck convinced the IRS that a player's performance level will drop over age like a piece of equipment) as well as deduct the actual salary paid to the player. This double deduction was a tax windfall to teams, especially with big money deals. But that is apparently going away under the recently passed tax bill. On the revenue side, limits on corporate entertainment expenses will adversely impact sky box sales and corporate season tickets given to clients or vendors. Teams cannot budget renewals of those big ticket items if corporations will not be able to deduct the cost.

And then there is future spending concept.

Next year's free agent market is much better than 2018: Bryce Harper, Manny Machado, Clayton Kershaw, Dallas Kuechel, Charlie Blackmon, Daniel Murphy, Adam Jones, Gio Gonzalez, Andrew Miller, Nelson Cruz, Elvis Andrus, Andrew McCutchen, and Craig Kimbrel could be available.

As Yahoo Sports reported, Cubs team chairman Tom Ricketts and president of baseball operations Theo Epstein talked about that dynamic during the Cubs Convention this past weekend. "It's a number of factors. Every team has to make decisions in their own best interest, and that's what's going on," Epstein said  when asked why this off-season has been so slow-moving. "But there's some macroeconomic trends in the game that probably after the last collective-bargaining agreement teams are just trying to position themselves the best way they can, probably in some cases with one eye on next season's free-agent market, trying to get their payroll where they want it to be. It's hard to say it's any one reason. It's probably a combination of factors. But I don't know that we've ever seen anything quite like this."

"Next year's free-agent class is different than this year's free-agent class," Ricketts said, putting it mildly. "I think what you're seeing with teams out there would rather have dry powder a year from now. … There's a lot of pieces and parts, but ultimately, I think teams are trying to keep their powder dry."

Perhaps, but the Cubs' front office keeps stating its desire to add a starting pitcher before this off-season is over. Epstein opened the door to that acquisition perhaps not being of the bank-breaking variety, though, indicating over the weekend that it could be a move that simply provides depth for a starting staff realistically no deeper than five guys at the moment. Until then, Jake Arrieta, Yu Darvish and Alex Cobb are still the top free agent starters who have not generated much interest or a bidding war for their services.

The Cubs also have other looming financial commitments if you look further into the future. Kris Bryant (who just set an arbitration renewal record deal), Anthony Rizzo, Kyle Schwarber, Addison Russell and Javy Baez are all slated to become free agents after the 2021 season. The team's top four starting pitchers - Jon Lester, Kyle Hendricks, Jose Quintana and Tyler Chatwood - are all slated to become free agents after the 2020 season. 

Epstein has admitted in the past that he has had to be creative in structuring his payroll because he is working with a tight budget from the business side of the team. Saving money on this year's budget can be used next year. But Epstein is also very fond about "his guys" like Schwarber, Bryant and Russell to let them get away to free agency. He needs to start balancing long term extension offers to the key players. 

So this off-season will probably remain very quiet until the end of January as teams take a much longer term view of their operations and finances.

HARD SELL

Agent Scott Boras went to the GM meeting demanding that teams spend big money on his clients like J.D. Martinez and Jake Arrieta. He is looking for $200 million plus deals for his players.

But his rants only caught the attention of a few reporters.

The luxury tax threshold and penalties of the new CBA are starting to take effect. Simply put, the penalty for going over the threshold of $195 million payroll is a percentage of the overage. If you go over year after year, that percentage increases to 100%. And then, you start having your draft choices being downgraded 10 slots. So the payroll cap has now both financial and operational penalties.

Owners want to control unnecessary costs and scouting departments do not want to be handcuffed with their draft picks. It puts teams more in line with the spirit of the rule. It also lessens the big market teams from overspending on free agents who are demanding long term deals.

The longer the deal for a veteran, the more likely it is that there will be more dead money at the end.

So it will be a harder sell for agents to get top dollar for an above average, free agent player.

Some speculate that many teams, including the Cubs, are holding back overspending this year because next year's free agent class is better (with Bryce Harper the star who may blow past the $400 million contract line.)

Others speculate that a few teams would rather collect international signing bonus money to try to get 23 year old Japanese star Ontani. The Mariners just traded a young, 100 mph flame throwing reliever to the White Sox for $500,00 international cash. Seattle now has $1.55 million in international cash to attempt to sign Ontani.

The Cubs and a few other clubs previously went over the international pool cap. They are penalized by not being allowed to spend over $300,000 for any foreign player. This effectively puts them out of the Ontani sweepstakes (if he gets posted by his current club).

It has been reported that baseball revenues have increased while the CBA is effectively not allowing those new dollars to flow into player salaries. The Marlins talk about trading Stanton (who has a no trade clause) to drop their payroll is another item that irks player agents. If Stanton and few other higher cost players are traded, the Marlins (under new ownership) will field a low-cost,  AAAA team in 2018.

NEW DEAL

Selig's Folly is dead. In 2002, Commissioner Selig's All-Star blunder (of teams running out of players) of making the exhibition game "count" in the playoffs is no longer the case. Back to the basics of sports, the team with the best record will have earned the advantage in the World Series. This makes every game important.

The change of the All-Star game ramifications is part of the new collective bargaining agreement. The new five year deal tweaks various aspects of the old deal. MLB.com reviewed the new changes:

The most surprising twist is that home-field advantage in the World Series will no longer be tied to the All-Star Game, as first reported by The Associated Press. Instead, the pennant winner with the better regular-season record will get home-field advantage in the Fall Classic.

Free-agent compensation
Specifics on Draft-pick compensation are still being discussed. That said, qualifying offers -- which will still be calculated based on the average of the top 125 salaries -- can still be extended to free agents, but no more than once per player in his career. A player must still be on his club for the entire season to receive a qualifying offer.

Teams losing a free agent who received a qualifying offer will get a Draft pick only if the player signs a contract worth at least $50 million. After that, the pick depends on a team's market size, according to MLB Network Insider Ken Rosenthal.

Beginning in the 2017-18 offseason, teams will not lose first-round Draft picks for signing a premier free agent. However, teams exceeding the luxury-tax threshold would lose a second-rounder, a fifth-rounder and $1 million in international pool money.
 
If a club hasn't exceeded the luxury-tax threshold, it will lose a third-round pick.

Luxury tax threshold
Incremental increases from the current $189 million of 2014-16 to:
2017: $195 million
2018: $197 million
2019: $206 million
2020: $209 million
2021: $210 million

Tax rates for teams exceeding the threshold will rise from 17.5 percent to 20 percent for first-time instances, remain at 30 percent for second instances and increase from 40 to 50 percent for third-time instances.

There's a new 12 percent surtax for teams $20 million to $40 million above the threshold, 40 percent for first instances more than $40 million above the threshold and 42.5 percent for teams $40 million above the threshold a second time, according to The Associated Press.

International Draft
Rather than an international Draft, which owners had sought, the two sides agreed to a bonus pool system, with a hard cap on how much each team can spend. That pool is expected to be $5 million to $6 million per team. Under the previous CBA, the bonus pools were scaled based on record the previous year, with the worst teams getting a little more than $5 million and the club with the best record getting a bonus pool in the $2 million range. It was also a "soft" cap, meaning teams could exceed it, but had to pay penalties for doing so.

Cuban-born players who are at least 25 years old, with six-plus years of experience in Serie Nacional, will maintain exemption from the international bonus pool, according to MLB.com's Jon Paul Morosi.

Roster size
No change. Teams will have 25-man rosters for the regular season, expanding to 40 in September. An expansion to 26-man rosters for April through August had been discussed in exchange for a smaller roster expansion in September, but that did not materialize.

Disabled list
The minimum time for a trip to the DL will be reduced from 15 days to 10, according to The Associated Press.

Other items of note
• Beginning in 2018, the regular season will begin in mid-week to create additional off-days during the schedule.

• According to the New York Post, incoming Major Leaguers will be banned from using smokeless tobacco, but current players will be "grandfathered in" and still be permitted.

THE KEYS TO THE DEAL

1. The All Star league winner for home field advantage in World Series has been a thorn on many teams sides for years.  The idea that the best team should have home field advantage during the playoffs makes the most sense and will have the biggest change in the new deal.

2. The shortening of the DL from 15 to 10 days will have operational consequences. First, it makes it easier to activate players with day to day soft tissue injuries. Second, it is a compromise between the concussion protocol and the old DL time frame. Third, it will add additional player travel cost moving players from minors to the majors. Fourth, it really gives starting pitchers a quicker avenue to get back to the big leagues (missing 2 starts instead of 3).

3. The free agent qualifying offer compensation is still a quagmire of exceptions. The new deal allows second tier free agents (normally players in their late thirties looking for a final 2-3 year deal) to reject a qualifying offer for a one year deal (for this year's amount of $17.2 million) in order to get a higher guaranteed sum in a 2 or 3 year deal below the $50 million threshold.

4. The owners lost out on an international draft, but gained additional funds for the large market teams to equalize with the small market clubs. The hard cap makes it harder for international free agents to big up their bonus demands. It also stops teams from spending Round 1 bonus dollars on foreign teenagers, which makes U.S. high school and college prospects more of a scouting priority.

QUALIFYING OFFERS

Qualifying offers in baseball have been the bane of agents and teams for a long time.

When Phllies starter Jeremy Hellickson  decided to accept the Phillies’ $17.2 million qualifying offer ahead of  the deadline, he said he was considering declining the QO but potential suitors told his agent, Scott Boras, that they were reluctant to give up a draft pick in order to sign the right-hander.

Some teams value their draft picks more than free agents. Other teams, like the Yankees, churn their veterans for compensation picks while losing other picks by signing other teams free agents.

Players with attached draft pick compensation have had a tough time finding a home in free agency since the QO system was adopted. Outfielders Ian Desmond and Dexter Fowler  did not  sign with their respective teams, the Rangers and Cubs, until late February prior to this past season, due to draft pick compensation being attached to them. Neither player got a multi-year deal and settled for salaries, $8 million and $13 million respectively, below last season’s QO value of $15.8 million.

Yahoo's Jeff Passan wrote that there is “increasing sentiment” coming out of collective bargaining agreement negotiations that the QO system will not be around for the next offseason. That’s great for free agents and teams that want to sign them, obviously, but bad for teams losing those free agents unless they’re allowed to recoup value in some other fashion.

The QO was designed to help small market teams that lost control of their star players to free agency to get something in return to developing talent for the large market teams. Some would say that revenue sharing and protected picks should be enough compensation for those clubs. Others felt that it was leverage for existing clubs to keep their star players. But the formula for setting the QO has gone through the roof, creating an artificially high floor in the free agent market. Some team owners gripe about $17.2 million to retain a player or negotiate with a free agent with that price tag already on similar assets.

In order for the program to change, the small market clubs will demand some other form of compensation. For example, if MLB does institute an international draft (with foreign players and representatives abhor), small market teams may be awarded extra sandwich compensation picks between rounds. Or, a team signing a "restricted" free agent (however that term will be re-defined) may have to pay some cash (development costs). Agents would not like that because a team could shave the payment off their contract offers to players. But in most CBA provisions, it comes down to money either going into the players' or owners' pockets.

THE BIG NUMBER

The biggest number revealed this off season: $17.2 million.

That is the estimated qualifying offer number.

It is a $1.4 million increase from last off-season.

Within five days of the World Series conclusion, teams must make a qualifying offer to their pending free agents in order to secure a potential first round pick if their players declines it.

Player agents hate the qualifying offer rules. It actually limits the market for free agents with that tag as most teams do not want to give up a first round pick to sign a high price veteran.

But this may be the last year for the qualifying offer as the current collective bargaining agreement expires on December 2, 2016.

But then again, no free agent actually accepted a qualifying offer until last season. It seems that the number has grow so high that it tends to be market value, even though it is for a one year deal, of a normal free agent.  But free agents are more concerned today with the years on the contract (the guaranteed money) as a hedge against injury. It is expected that the qualifying offer rules will be a sticking point in the next union contract.

The procedure was put in place to help small market teams who would develop star players only to have them leave after 6 years for free agency. The small market team got nothing in return for developing the games best players. So, the league decided to compensate any team for a loss of a free agent with a draft pick. But at the same time, it also penalized a team for taking the player by losing a draft pick. The idea was to forge some kind of competitive balance between the clubs.

But with the large national television deals and new revenue sources, most small market teams such as Kansas City have found ways to keep their home grown talent. The Royals have been competitive. The Royals have a championship. But just as KC has found a way to work within the system, there are other teams like the Brewers who continue to tread water.

ALWAYS UNDER A CLOUD

Jake Arrieta has transformed his career since the Cubs traded starter Scott Feldman, a rental player, to the Orioles, for their former prospect.

Arrieta not only got better - - - he has become the best in baseball. Two no-hitters in 11 starts is proof of a totally different pitcher than the one the Orioles decided was not in their future.

But now, the public whispers suspicions that Arrieta could not have gotten this good, this quick, without some artificial help. Baseball was in denial for most of the steroid era. It recaptured fans with the McGwire-Sosa juiced home run race. Light hitting utility infielders were suddenly hitting 25 home runs. Player contracts skyrocketed in value under new cable television deals. There was plenty of incentive for all sides to look the other way when the topic of PEDs came up in the game.

Arrieta denies he takes any banned substance.

He  responded to a USA Today story that highlighted suspicions PEDs helped his transformation from an inconsistent, uncertain pitcher with the Orioles into an absolutely dominant force on the mound.

“I know there has been situations where somebody took something maybe unknowingly,” Arrieta said. “Due process was taken and they found out maybe it wasn’t what they thought it was. But if it’s a blatant attempt to cheat the system with a serious steroid, then I think maybe (a zero-tolerance policy would work).

“If you’re going to put your career in jeopardy, then you’re willing to take that chance. There’s food and supplements that you can take legally that will better your body and help you stay healthy and perform throughout the course of the season.

“Shortcuts are something that’s always been around in all sports. But as a union, we’re trying to do everything we can to weed those guys out of this game,”  he said.
 
With the collective bargaining agreement set to expire after this season, labor negotiations between MLB and the players’ union have already begun. Arrieta isn’t sure if the answer is adding to the list of banned substances.

“The list is ridiculously long,” Arrieta said. “I eat plants and I eat lean protein and that’s my gig. That’s what I do. I watch what I eat and I train properly. That’s no secret. My mom’s 6-1 and my dad’s 6-4, so I’m going to be big. I do Pilates – and I strength-train with heavy weights occasionally – and this is the result.”

The biggest change in Arrieta's pitching was that he came to Chicago and asked his coaches if he could go back to his original pitching mechanics. Those mechanics of throwing across his body usually causes extreme torque on a pitcher's shoulder and elbow. That motion has ruined the careers of many pitchers, including Kerry Wood and Mark Prior, whose former straight line motion scouts called the perfect release and throw. But under the pressure and work load of a major league starter, the arm starts to weaken and drop across the chest. Arrieta's unconventional delivery is what makes hitting against him very difficult. The ball to a right handed hitter appears to be coming directly at him - - - then breaks over the plate. That moment freezes a hitter, which messes up the hitter's timing, and makes Arrieta a dominating pitcher.

Arrieta's work out routine is famous. He stretches constantly which keeps his muscles and ligaments loose (just as lanky pitchers from past eras could pitch complete games without pitch counts). He keeps himself in shape. He has the mental toughness to be a professional at his craft. He takes at least 10 tests a year. There is no report that he has failed any one.

But the rumors will always surround baseball. Fans had been lied to for a long time to be cynical about the purity of the game.

SHOW DOWN

There is a sense of baseball reaching a new golden age with the rise of many exciting new players and teams like the Cubs with championship expectations.

But this new age may have a real problem. The golden goose may get strangled in the players union and owners contract negotiations.

The MLB players union is going to take a hard line tact in the new CBA negotiations.
The current collective bargaining agreement expires 12-1-2016.

The players and agents are ticked off by the current CBA "service time" requirements
for free agency. The Cubs sat Bryant in the minors for 12 days which gave them an
extra year of control. The union wants to drastically change those rules, retroactively.

This CBA is going to get hot under the collar because the owners are starting to realize
that the Dodger billion dollar cable deals are not going to happen in the future.
The owners will press for economic concessions from the players to off-set cable TV
viewer and contract declines.

This could get drawn out and nasty.

The owners have established a series of spending caps for June draft and international signings. This was done to level the playing field for small market teams. The idea that a competitive balance through restricted spending will create a better baseball product throughout the league.

Draftees still get their million dollar bonus money for being first round selections, and teams have found ways to pay second and third rounders more money than slot values. So this part of the agreement may not get tweaked at all. It is the control aspect of the player development years that is at issue. A team can control a high schooler for 6 years and college players for 5 years. If they get to the major league roster, their base salary is $507,000. Not bad for a 20-something young man, but since many of them start their careers with break out seasons, their agents believe that teams are getting bargain basement value from non-arbitration eligible players.

More teams are filling roster spots with young, controllable players because they are cost effective with more upside than veteran free agents. And fans like to gravitate toward home grown rookie talent.

The union could demand that service time concept be eliminated all together. Teams would have a set amount of years to develop and promote a player to the major league roster or the player automatically becomes a free agent. Since most teams have a minor league system of a) rookie ball, b) low Class A, c) high Class A, d) Class AA, and Class AAA, the union could say that 5 years is the maximum amount of control time for any player. Ownership could counter saying that the 5 years would not give the team any return on development investment in a player even if they are promoted each step every year. A team would like 5 years of major league control of a player. But the union would not agree to 10 years of team exclusivity. 

Opt-outs are becoming popular with player and player agents. Perhaps the minor league player could "opt-out" of team control if he is not being promoted or developed by a team, or he is blocked at the major league service after a certain amount of years. The union wants to get its members to the majors as fast as possible in order to earn major league pay (and pay dues). Owners and general managers do not want to "rush" players to the majors. And some veterans may not like the idea of forced promotion of minor league talent because that could affect their standing on a roster or in the free agent market.

The new CBA will be a show down between two factions at the economic cross road of the game.

SERVICE TIME

Service time earned towards free agency was collectively bargained between the players union and MLB. A contract is a contract; a deal is a deal.

Back in May, Kris Bryant's agent groused about the Cubs "holding back" his star player from the major leagues. But it standard procedure of front offices to balance promoting rookies to the major league roster vs. how many "years of control" do they have with the player. Control means cost control.

But Bryant's agent, the boisterous Scott Boras, comes to the annual Winter Meetings with a chip on his shoulder. He again cries foul on how the Cubs treated his star client.

Cubs general manager Jed Hoyer said the club has been aware of the Major League Baseball Players Association action since May. “Nothing’s really changed since then,” Hoyer said. “The fact that the news came out today doesn’t really change anything about where we are. Obviously, we feel like we were in the right, but I’m not going to comment on the case or open this back up.”

“It was filed in May – and to the best of my knowledge – it sits in the same place it has been,” Hoyer said. “It’s something we’ve known about for a long time. And it certainly doesn’t change our impression of the player or his representation at all. We’ve got a great relationship with Kris. We’ve got a great relationship with Scott.”

The Yahoo! Sports report also identified Philadelphia Phillies third baseman Maikel Franco as involved in the grievance process. Franco (170) and Bryant (171) finished just short of the 172 days needed for a full year of service, closing their free-agent windows until after the 2021 season.

Setting service-time clocks for elite young players is essentially viewed as standard operating procedure within front offices and Bryant became a billboard for the issue in spring training.
Bryant – the second overall pick in the 2013 draft – began this year as Baseball America’s No. 1 prospect after hitting .325 with 43 homers and 110 RBI in 2014.

“I think Kris proved his point that he didn’t need any further minor-league (experience),” Boras said during last month’s GM meetings in South Florida. “Unless you can argue the seven games of Triple-A baseball dramatically allowed him to improve, I think he proved his point that he’s an All-Star player and a huge part of a franchise. Our point was that in the ethic of the game, I think it’s good for Kris – and for the fans and everyone (else) – that they understand that the rules of the game often allow teams to do things that are unrelated to the best interests of the team or the true talent evaluation of the player," Boras said.

He added, “It’s perfectly appropriate under the rules for clubs to say that they can do that. I just think you (should) have (better rules), a better ethic to it. Because in the end, we want to make sure our fans know the best players are always playing in the big leagues all the time.”

But it is part of the rules and the teams have a right to use the rules to their benefit.  It is not that Bryant will be starving or not have his own free agency payday down the road. It is not an ethical issue but a contractual one.

And with the current CBA expiring after next season, this topic will be brought up by the players' agents as something that needs to be changed. The owners will fight back, knowing that the "sports bubble" of cable and network television money may soon burst by all the young cable-cutters who are finding entertainment on other technology platforms.

THE BONDS THAT BREAK

Jon Heyman of CBS Sports reports that Barry Bonds will file a grievance against baseball owners for allegedly blacklisting him from baseball.

Bonds claims collusion by teams that prevented him from obtaining a playing job following the 2007 season. He has long contended that a collusion of MLB owners effectively ended his career after the 2007 season when he set the career home run record with 762 homers.

However, Bonds was 42 years old during the 2007 season. He was well beyond the normal age for a productive baseball player. And he was under extreme scrutiny both inside and outside of baseball for allegations of PED use.

In 2003, Bonds' name came up during the BALCO scandal when his personal trainer, Greg Anderson was indicted by the U.S. and charged with supplying illegal anabolic steroids to athletes, including baseball players. This led to speculation that Bonds had used performance-enhancing drugs during a time when there was no mandatory testing in Major League Baseball. Bonds declared his innocence, attributing his changed physique and increased power to a strict regimen of bodybuilding, diet and legitimate supplements.

During grand jury testimony on December 4, 2003, Bonds said that he used a clear substance and a cream that he received from his personal strength trainer, Greg Anderson, who told him they were the nutritional supplement flaxseed oil and a rubbing balm for arthritis. Later reports on Bonds’ leaked grand-jury testimony contend that he admitted to unknowingly using "the clear" which was reportedly a form of the designer steroid THG and "the cream"  which was reportedly a concoction designed to mask certain hormone ratios helping the user to beat drug tests.

In August 2005, all four defendants in the BALCO steroid scandal trial, including Anderson, struck deals with federal prosecutors that did not require them to reveal names of athletes who may have used banned drugs.

On November 15, 2007, a federal grand jury returned an indictment against Bonds. He was charged with four counts of perjury and one count of obstruction of justice. "During the criminal investigation, evidence was obtained including positive tests for the presence of anabolic steroids and other performance enhancing substances for Bonds and other athletes," the indictment reads. The charges focus on Bonds' responses to the grand jury in his 2003 testimony, specifically his denials when asked if he had used steroids, and whether Anderson had administered steroids to him.

The case went to trial, with Bonds being convicted on one count of obstruction of justice (the jury was hung on other counts) for lying to a grand jury about his alleged steroid use. His conviction was recently overturned on appeal.

Since the BALCO matter is now completed, it appears Bonds is ready to move ahead against MLB.

Bonds and his agent have said that Bonds, despite having a good season (.276 BA, 28 HR, 66 RBI) he received no offers to play in the 2008 season. His reputation of being difficult with the media, aloof from the fans, and caught up in baseball's steroid scandal hurt his chances to becoming a Hall of Fame inductee despite being the game's greatest home run hitter.

It is unclear that Bonds' grievance against the owners will have any traction. Did a 43 year old player with baggage worth a contract offer?

ANOTHER WAVE

Tim Brown of Yahoo!Sports notes that there has been a surprising increase in baseball players getting busted for using banned substances. He wonders if there is a "new" wave of players trying to get around the CBA test policy, or getting very bad advice in non-US countries.

Brown notes that 9 pitchers, including Twins veteran starter Ervin Santana, have been caught and suspended for using stanozolol.  

In March, David Rollins, a Rule 5 pitcher for Mariners was suspended 80 games after testing positive for stanozolol. In the prior year, MLB suspended five others – all minor leaguers – for the same. 

Stanozolol is not a new drug. It is easily detected in the MLB drug protocol. It was one of those muscle building equine drugs that got carried over into bodybuilding circles. 

Within two weeks, MLB announced the suspensions of three more pitchers – big leaguers Arodys Vizcaino, Ervin Santana and Jenrry Mejia – for stanozolol. 

Eight of nine pitchers are from the Dominican Republic, while Rollins, a Texan who played winter ball in the off-season in Puerto Rico.

Brown remarks that MLB has noticed this sudden uptick in stanozolol use. He wonders if four players take stanozolol and four get caught? Or Did 104 take stanozolol and four get caught?

MLB says it is investigating and that it has yet to discover a common thread.

The problem is that the average major league salary this year is $4 million. That is at least four million reasons to try to get "an edge" and a major league contract. Players will do anything if they think it will get them to the majors, and its fame and fortune. Normally, people think hitters are the ones who use performance enhancing steroids, but pitchers have admitted that some of these drugs to speed along the healing process in their arms. 

The CBA is very specific about drug use. The players are told about the drug policy in spring training. Their agents are well aware of the consequences of a failed drug test. But the circle of this scandal never seems to fade into the past.

A SECOND LIGHTNING ROD

If Major League Baseball had a big enough headache with Alex Rodriguez's return to the Yankees, the Josh Hamilton saga gets even more down the rabbit hole.

Hamilton has had his personal demons that have been documented in his minor league transgressions. During the spring, there was an alleged relapse. MLB wanted to suspend Hamilton under its substance abuse policy, but Hamilton and the union objected to any punishment, citing that Hamilton would have been a first timer under the major league CBA.

Hamilton avoided suspension after an arbitrator sided with him over Major League Baseball. His Angel teammates are waiting for his return, but during the home opener, Hamilton had no locker.

Angels owner Arte Moreno is upset with Hamilton. Moreno cited a provision in Hamilton's Angels contract that gave the club special remedies against any relapse. Since those type of contract provisions are not allowed under the CBA, the players union is quite upset with the Angel's owner.

Local reports indicate that  it’s a really ugly situation on a number of different levels that’s being made worse and worse by Moreno every time he opens his mouth. The entire Angels organization is handling this as poorly as possible in terms of public relations, managing the clubhouse, and - most importantly - treatment of people. It is clear that the Angels probably want to void Hamilton's deal, or the very least, not allow him to play for the Angels. This is the corner that the Yankees were pinned in all of last year with A-Rod.  But Rodriguez demanded his comeback and the team honoring his contract, which has a $6 million payment the next time A-Rod hits a HR. The Yankees will loathe writing that check.

But since teams cannot put in their own "morals" clauses into player contracts, the Angels are stuck with an underperforming, highly paid, broken down outfielder who has zero trade value.

FOOL'S GOLD

Those who praise Theo Epstein's plan for long term success of the Cubs believe the decision to send Kris Bryant to the minors for 12 games in order to keep him under control for another full contract season is a no-brainer.

Yes, the current collective bargaining agreement harshly defines service time and club control of players. Yes, it makes sense to keep Bryant for a 7th year during his projected peak production years.

Yes, no matter what Epstein and the front office says, sending Bryant down was purely "a business decision."

Own it.

Instead, the Cubs use excuses that Bryant needs some final development. It could be adjusting to the outfield (but if that was so, he could have played more than one game in LF during spring training) or resting his sore shoulder (that is what the DL is for).

Owner Tom Ricketts has said time and time again to fans that money would be no object in fielding a championship caliber team. The Cubs went out and spent $155 million on pitcher Jon Lester, who happens to be nursing a dead arm. The Cubs still owe Edwin Jackson $26 million in dead money. So if the Cubs truly believe money is no issue, then it should not matter what Bryant is worth in Year 7.

Own it. Pay it.

Unless of course, you don't want to pay market value to Bryant in Year 7. A small market team would be desperate to keep a star player, a draw, for as long as possible at a 25% discount (last year of arbitration to FMV).  People perceive the Cubs as not a small market team, but at times they act like one.

When management says there are only one or two players away from the playoffs, do they really mean what they say? Ricketts said that in Year One and beyond as the team sunk to the bottom of the barrel. But Epstein's plan was to be bad in order to get high draft picks and more signing bonus money. On paper, it is working as the scouting services and writers believe the Cubs have one of the strongest farm systems in the game.

A small market team trades "hope" for fan support. Small market teams must rely on their farm system and prospect player development in order to compete against large market clubs. The Cubs have marketed "hope" for the past three seasons. Fans have being putting up top dollar to see the touted prospects. It is a tease to sell a mega-prospect to season ticket holders, then withhold his debut.

Some seasoned fans are tuned into this drama as the Cubs were advertising last weekend that Opening Night tickets were still available for purchase (as part of 12 game season ticket packages). That in itself is surprising considering the Cubs don't have any bleacher seats available for that game.

Fans really don't care about Bryant's Year 7. If he is good, the Cubs said money was no object.

But there is no guarantee that Bryant will even be a Cub 7 years from now. Or that he will command superstar contract status.

Here is a historical list of the Cubs top prospects:
2015: Bryant, waiting in AAA
2014: Javy Baez, demoted to Iowa
2013: Baez
2012: Brett Jackson, demoted and out of the organization
2011: Chris Archer, traded for Matt Garza, starter for the Rays
2010: Starlin Castro, Cubs starting shortstop
2009: Josh Vitters, demoted and out of the organization
2008: Vitters
2007: Felix Pie, bench journeyman out of the organization
2006: Pie
2005: Brian Dopirak, out of baseball
2004: Angel Guzman, journeyman pitcher who mostly played outside organization
2003: Hee Seop Choi, out of baseball
2002: Mark Prior, injury killed career early
2001: Corey Patterson, bench journeyman out of the organization
2000: Patterson

Bryant's closest comparison is Jackson, who was great in the minors but only had a cup of coffee in the majors (the strikeout ratio at the plate doomed his playing career). Baez is following in Jackson's footsteps. One would hope Bryant would be different. But then, Micah Hoffpauir destroyed minor league pitching in 2008 and 2010 but his Cub career quickly fizzled out after 2.5 seasons.

Whether Bryant is real gold (which the vast majority including myself believe) or fool's gold can only be determined by his actual playing time in the majors. Does he have anything further to learn in the minors? No. Did the Cubs have some reason to keep a valuable asset under control for the longest possible time? Yes. Does control issues matter when you are projecting a fight for a playoff spot this year? No.

Perhaps, the real issue is the Cubs mixed messages to fans. The flames of championship fireworks is what people have latched onto - - - because it is a good story. But the cold water of reality is that there are so many variables and historical evidence that a prospect's resume is no indication of future success that people should be more guarded with their expectations.

But guarded expectations does not sell tickets.

RADIO THEO

Theo Epstein was on WEEI-Boston's baseball show. In a long interview, he made certain points on how the current CBA has changed how he operates a franchise.  His opinion is that the new CBA severely restricts what made him successful in the past.
 
“I think the biggest challenge is just the changes with the CBA, you can’t really choose how much you want to emphasize the draft anymore. In Boston, we decided that it was going to be fundamental to our approach, that in order to win a World Series,  we needed to develop homegrown players, in order to develop homegrown players, we wanted to shift as many of our resources as we could to the draft,” said Epstein. “So we let free agents walk after the ’04 World Series.  We let Pedro Martinez, Derek Lowe and Orlando Cabrera walk, and we used those picks to sign the [Jacoby] Ellsburys and [Clay] Buchholzes of the world. We made the trade for Victor Martinez knowing, yeah, you’re going to get a year and a half of production from him and help us get to the postseason and then we’re going to let him walk. I think we got Henry Owens and Matt Barnes for Victor. That was just a fundamental part of the approach. It was a strategy and it was really important to how we built the organization.

“And now,” Epstein continued, “you can’t really develop a strategy around draft picks. Sure, you might have someone that in a given year you can make a qualifying offer to, in the case of the Red Sox and Yankees maybe a couple, multiple players you can make qualifying offers to and get picks that way, but you only get one pick. You don’t get two anymore. The scope of players who receive compensation is much more limited and most mid-market teams and below will very rarely if ever have compensatory picks for free agents leaving now. That’s just something that you can’t factor in. And you can’t overpay players in later rounds anymore unless you really go for a bargain in your first-round pick. That’s just really changed the game. You can still quote-unquote dominate the draft, make an impact in the draft, the way we tried to, but it’s on a much smaller scale. I think the days of getting Barnes, [Blake] Swihart, Owens, [Jackie] Bradley with your first four picks in 2011, those days are probably gone. You just have to make due with one or two picks like that in a given year instead of going for the whole bounty.”

Epstein complains about the new set of rules he has with the Cubs. He "won" in Boston by doing the following: overspending on first round talent with signability issues by paying them first round money in later rounds; letting free agents walk in order to get two high compensation draft picks; unlimited spending on free agent market (with no real luxury cap restrictions). He can no longer steam roll the system by spending a ton of money to acquire talent.

But in the major leagues, a player needs to adapt and make adjustments in order to succeed. The same is true with management, who must change their strategy in order to do their jobs effectively. Epstein seems to be brooding about the "good old days."

But those good old days included the same tools that have been around baseball for a long time: drafting quality players, making valuable trades and signing good free agents. Epstein is only looking at 1 of the 3 tools when working with the Cubs. He thinks the small number of quality free agents is skewing the free agent market and butting up to the penalty of the luxury tax.

Epstein said, “I think it’s actually probably in practical terms an even bigger contract [than $175 million] because when you factor in the impact of the CBT tax that the Yankees will have to pay going forward now, if indeed Tanaka was the player to push them over this year and therefore the higher rate in subsequent years. I can’t say I’m surprised. To answer your question, it reflects the dynamic that there are many, many teams with lots and lots of dollars to spend and very few places to spend them, very few players who represent sound investments for the dollars. I think anytime in this market that you find a player who will be in his prime years or pre-prime years or close to his prime years and has been healthy and has recognized tools and has a track record, in this case not even a track record in the major leagues, but a track record that points to that player is going to draw significant interest, probably more than expected, just because the supply/demand dynamic dictates it."

But the free agent market has always been players chasing the biggest pay day. That has not changed. The value of the contracts continue to rise because MLB's gross revenues continue to rise due to new TV deals. The Yankees have found a way to budget in any luxury tax in order to stay competitive in the AL East. Teams like the Yankees in the Tanaka sweepstakes use a risk-reward test to determine if a $100 million plus contract is warranted. Likewise, the Mariners overpaid for Robinson Cano because Seattle needed to in order to revive its fan base. But to sit out the free agent market because second tier players are now commanding higher prices is a ridiculous excuse for a baseball team. Every team has the same issues. By not being involved in the process, the Cubs will regress to become less competitive.

“There are lots of teams demanding talented, prime-age players, and supply is really a trickle. Fewer and fewer players of that ilk are reaching free agency. It’s pretty rare that you find a player — maybe one player a year like that through the posting system, maybe one through Cuban free agency with a player who qualifies outside the international spending pool, and that’s about it. You’re going to see these prices that cause people to shake heads. You still have to justify it. The guy still has to fit with your long-term plans. But because of the TV deals, the teams that have them have a lot of money and not a lot of attractive players to spend the money on.”

Again, teams are extending their own players into their prime years to avoid free agency market values. That seems to be common sense, if your homegrown player is a first tier caliber player. You cannot complain the mid-level free agent market is weak because teams are making sensible decisions with their own players. Epstein did the same thing by extending before arbitration eligibility Starlin Castro and Anthony Rizzo. But these  two "core" players have not met their projected expectations since signing those deals. 

So despite their own internal struggles, the Cubs went out last year and overspent on international players to the tune of a overspending penalty and severe restrictions on signing bonuses this year. The Cubs gambled and rolled the dice on a class international players, and costing them a year in the international market as a result. And the Epstein-Cubs track record on international players has not been too good: Cuban pitcher Concepcion is AWOL and power hitter Jorge Soler is quickly moving DOWN the Cub top prospect lists. 

MLBTR reported that the Yankees, fresh off a massive free agent spending spree, will be looking to replenish a bleak farm system by preparing to "spend wildly" on the international free agent market this summer. It is said that New York was planning to incur penalties by spending $12MM to $15MM on the approaching 2014-15 international signing period. The new signing season, which kicks off (as always) on July 2, is believed by many to offer a particularly strong crop of talent.

The Yankees are allotted just over $2MM to spend on international free agents this summer, but the ESPN/NewYork reports that the club may spend a staggering $18MM in bonuses as they look to restock their minor league ranks with high-upside talent. Such an expenditure would come with the harshest of penalties laid out in the newest CBA; the Yankees would pay a 100 percent tax on their overage and would not be allowed to sign a player for more than $250,000 in the following international signing period. While those measures are undoubtedly harsh, they haven't stopped the Cubs and Rangers from spending more than $8 million each on international free agents during the current signing period.

The Cubs will incur the signing penalty for this year's "strong crop of talent." That means the Cubs have taken themselves out of the international class this time around. That plan seems to be counterintuitive considering logic says that you should look for the best talent (improvement) every year. 


Epstein's whole Cub strategy now is to overload the Cubs minor league system with prospects. Any trades he makes are really to add more prospects to the system. It is a simple math equation: if only 6 percent of your prospects make it in the majors, the more prospects one has, the more should make it. But there still are key variables such as scouting, development, training and injury that come into play. The Cub fan base has heard it all before about great prospects in the system: Patterson, Pie, Hill, Kelton, Scott - - - were all going to be great players. They are turned into busts.

“I think the Red Sox are just really well positioned because Ben (Cherington) has done a phenomenal job with the clubhouse mix and the talent that he’s brought in," Epstein said. " It’s probably the deepest system in baseball on the way with plenty of impact talent. They should be good for a long, long time. I think of the 50 players on the World Series rosters, I think there were something like 35 or 38 homegrown players on the Cardinals and the Red Sox. Those two franchises are going to continue to excel. That’s really our model with the Cubs. We’re starting from the bottom of the well but we’re digging our way up. That’s where we want to be. We want to have a team with young players — pre-prime and prime age players, mainly homegrown, not that we won’t use players in trades and bring in talent from the outside, not that we won’t complement them with free agent signings from time to time, but we want to get to a point where we feel great about the roster, great about our farm system, great about our salary structure, great about the five- and 10-year outlook, and then you can have offseasons like the Cardinals and Red Sox have had where you just operate from a position of strength and pick and choose what you want to do because you have depth and redundancy at a lot of positions. The players you reference are going to be a big part of making that a reality for the Red Sox. They have great scouts and great leadership so they should continue that dynamic for a long time.”
 
The problem with this approach to be homegrown heavy is that both the Cardinals and the Red Sox got to the mountain top not by solely relying on the draft. Both teams signed free agents and spent big money to keep their own free agents. Once they had a competitive core roster, the teams could scout and sign for need. Further, the Cardinals created a system where management was not afraid to promote talent to the next level, including the major leagues. The accelerated curve is like a lightning bolt throughout the minors - - - it makes players work harder so they are not left behind with just their draft day press clippings. This creates competition at the major league level - - - which in turn puts a better product on the field.

But Epstein and Cubs are not creating a competitive approach at any level. The major league team has been terrible and their is little chance of change in 2014. There is no level of competition at any position because the talent level is meandering around a 1.0 WAR. The Cubs are not putting quality talent at the major league level in order not to "block" their rising prospects from a major league roster spot. And if these prized prospects fail, there is a huge sink hole on the major league level.

Further, it seems Epstein has taken the view that it will take 10 years for the Cubs to come to the level of the Red Sox or Cardinals. That means 7 more off-seasons like the current one. It means a decade of losing in order to secure high draft spots to allegedly sign better quality prospects.

The last thing about the Epstein interview that may teeth-grind some fans is Theo's continued high praise for his former club. 

“First of all, it was a lot of fun to watch it. I’m in contact with a lot of guys from the baseball ops department and cheering them on,” said Epstein. “It was a magical run. It was probably fun even for non-Red Sox fans to watch that team build momentum through the season, go on the run they went on in the postseason. The chemistry they had was incredible. But it was probably particularly fun for me, being this familiar with a lot of players’ backgrounds, a lot of guys have come up through the system, it was just a magical run and really fun to watch.

“I follow [the Sox prospects] really closely, probably with equal parts admiration, pride and jealousy. I am really proud of what we built. As far as GMs go, I think I was pretty hands-on as far as building our scouting department, went out and saw the players. It was just a great decade,” said Epstein. “I’m proud of those players, and that last draft, there was enough that went wrong in 2011. I think in time, it would be a wonderful thing for everybody if, maybe we’ll reach that day when people think of 2011, they think of that draft class, my last draft with the Red Sox. That would be nice, because it would mean great things for the Red Sox and it would mean those players went on to have great careers that would maybe wipe some of the memory of September 2011 away for everybody and for myself, as if that hasn’t happened enough already with a lot of those same players helping to win a championship in ’13. It was a great decade in the draft there, and that was a great last draft. Those players are performing really well and we see them up at the top of prospect rankings. I definitely root for them. I covet them here with the Cubs at times. But I wish them well," he said.

One could read a hint that Epstein feels he has been exiled to a backwater baseball farmstead. He would rather sit back on the laurels of the Boston organization than champion his rebuild plans for the Cubs. And that may be more disheartening than waiting for the prospects to arrive at the major league level.

PLAYER CHANGE

Matt Holliday said that he believes that the current free agent system needs a change. The players who turn down a qualifying offer are having a hard time getting signed by new clubs because those clubs do not want to give up a first round draft pick in compensation.

Holliday recognizes that most teams now value high draft picks more than free agents. He noted that many teams use those high picks to move players quickly to the major leagues, which further downplays the need to sign an expensive free agent for those short gap years.

Holliday thinks that CBA needs to be changed so that a signing team does not lose one of its draft picks. The idea that the team that loses a player after making an offer gets a sandwich round pick is fine, but the eliminate the signing team from losing their first round pick.

The pro-player aspect of the current system is that a free agent may get an offer for the top player salaries in the league from his old club. Last season, it was around $16 million. The year before it was $13.5 million. That level of compensation is in the high end of the pay scale. The downside is that it is only a one-year deal, and at the veteran age with more injury risk, a player and his agent would want more years (even at a discount) than just a one year contract.

The other side of the argument is pure risk-reward. If a player and his agent believe that offer for one year guaranteed is too low, then they must evaluate the market to determine whether the player has great skills to get a multi-year deal elsewhere. If you are an "ace" pitcher or 35 HR batter, then the free agent doors do not slam in your face because contenders are happy to give up a prospect today for a championship this season. But if you are good veteran whose stats are on the fence due to age and/or contract demands, then the market shrinks. The yoke of a lost draft pick ends at the finish of the Acceptance Period which is before the next amateur draft or if the player signs a minor league contract with retention bonus and free agency provisions. The latter method only would come into play if the player totally misread the market and found no one truly interested in his services.

There is plenty of risk for the teams, too. A good player who hits free agency is a tough call for most teams. Do you pay him $16 million or let him walk? Or do you risk the player accepting the qualifying offer - - - which could strap your payroll budget to fill other needs? Or do you give a qualifying offer hoping the player rejects it so you can get an additional high draft pick?

The new system does make it more difficult for some free agents to quickly find a new team. It does not matter much to the premier free agents like Robinson Cano. If the players grouse enough to their union reps, I can see the CBA being tweaked in the future to allow more open free agency. But that does not mean that more teams are not going to concentrate on amateur and international prospects. That trend is clearly more detrimental to free agency than the current CBA rules.

QUALIFYING OFFERS

There is a trend in the current baseball agreement that actually restricts the best free agents from signing with a new team. It is called the qualifying offer.

At the end of the season, a team can give one of their pending free agents a "qualifying offer" which means a one-year deal based upon a formula of current salaries. Last year, it was around $16 million. Now, that is still pretty good money for a positional slugger or an ace starting pitcher. But players and their agents would rather test the free agent market for a longer deal and more guaranteed money from a new team.

But the rub is that if this player who rejects a qualifying offer signs with a new team, that new team loses its first round draft pick (unless it is a top ten pick, then it is the team's second round pick). The old team gets a compensation pick at the end of the first round.

In recent years, general managers are very protective of their high draft picks. With the new slot value signing bonus structure of the CBA, it is more cost effective and less expensive to sign quality amateurs than it has in the past. Many teams have used their first round picks on near major league ready prospects, some quality college pitching arms in particular, and then have them on the major league roster in two or three years. This fast track approach to the draft is beneficial to the team because the new player is paid at the league minimum.

Despite the recent big money local TV contracts, most major league teams are extremely budget conscious in regard to payroll. It is really the one thing that ownership can control. Home grown players are by far cheaper and under control longer than free agents. And the best way most GMs believe is to build from within is to keep those high round draft picks.

So a player who declines a qualifying offer runs the risk of being tainted with "the loss of a draft pick" status.

Now, on the other side of the coin, there are a few teams that really don't care about that stigma. The Yankees for example give qualifying offers to their star players all the time, knowing that they will reject them and hit the free agent market. But that does not stop the Yankees from signing similar free agents that cost them a first round pick, because the team has the same or more "compensation" picks at the end of the rounds. For example, the Yankees make qualifying offers to players A, B and C, who reject them. The Yankees then sign player D, and lose their first round pick. But players A, B and C sign elsewhere, giving NY three sandwich first round picks. In essence, the Yankees have created to more late first round selections by tendering qualifying offers to its players.

There is a risk to a team making a player a $16 million qualifying offer. The player may take it. That is fine if the team believes the player is worth $16 million. But if not, then you have a high priced player to move before the trade deadline.

And a player without a full season contract will not receive a qualifying offer after a trade, which means the team taking him in trade will not gain a draft pick if the player signs with a new team the next off season. These "rent-a-players" are good for contending teams in have an immediate hole to fill. But since teams are guarding their prospects closer to the vest, the value of rental players has been declining over the past several seasons.

Free agency can be good for some players, like Robinson Cano, who made a legacy contract with Seattle, but at the same time restricted his market to those teams who did not mind losing a draft pick. Small market teams were never in the bidding for Cano, so some may believe the process is "no harm no foul." However, some people believe the idea of losing a first round pick for a small market team is like drinking poison. It defeats the purpose of building a pipeline of cheap, fast promotion prospects to fill their major league roster.

ALL EGGS IN ONE BASKET

The Cubs made their last international signing official.

Steve Adams of MLBTR reports that the Cubs have signed 18-year-old Taiwanese right-hander Jen-Ho Tseng for a $1.625MM bonus. Tseng as the No. 29 prospect in this year's international class,. Tseng's fastball touches 95 mph and sits comfortably in the low 90s, and can add a curveball and slider.

Adams calculates that the Cubs have significantly blown through their CBA allowance for international spending of  $5.52 million. The Cubs can only spend 150% of that pool allowance. With this signing, the Cubs have spent $7.895 million, more than $1 million over the maximum level.

That means the Cubs will face the maximum penalties for overspending this year: a 100% tax on the overage plus severe bonus restrictions for the next two years (bonus limit of $250,000).

The front office will spend more than $9 million on international talent and more than $11.5 million on June draft selections or a total prospect spending of $20.5 million. This follows the Boston Epstein pattern of throwing a ton of money at a problem in hopes of a solution.

Just because one overspends on talent does not mean that talent will mature into impact major league players. Of the dozen bonus babies signed this year, maybe only one or two will actually make it.

This grand spending spree this year foreshadows major cut-backs in spending in the next few years. The Ricketts family will have to reign in team spending in order to pay for the massive real estate redevelopment costs of Wrigley Field and the surrounding properties. Club payroll will continue to fall next year.  Epstein has spent all his money on low minor prospects to buy at least four years of development time while the Ricketts are pre-occupied by their building projects.

Epstein's gamble this year was to place his budget on the black at the talent roulette wheel.

OVERSPENDING

I don't know if it is a desperation move or laying the foundation for the Big Excuse, but the Cubs have blown through their international signing bonus pool money. As a result, the Cubs could face stiff penalties including a 100 percent fine and signing limitations for next year.

Steve Adams of MLBTR believes that with the signing of Elroy Jimenez, the Cubs have spent $6.27 million for international players. The Cubs original bonus pool of $4.557 million and the trades that brought in bonus slot values gave the Cubs only to $5.520 million.

That would mean the Cubs are over their allotted bonus pool by $749,700 -- an overage of 13.6 percent.  The CBA  penalty for exceeding a bonus pool by 10-15 percent would be a 100 percent tax on the overage as well as the inability to sign a player for more than $500K in next year's signing period.  The penalty for exceeding the pool by 15% or more is a 100 percent tax on the overage and a $250K per player limit next year.

If the reported signing bonuses aren't 100 percent accurate, the Cubs could be less than 10 percent over. However, barring a significant inaccuracy, they would still fall into the 5-10 percent overage bracket, which would prevent them from signing a player for more than $500K in 2014-15 but require only a 75 percent overage tax.

Per the new CBA, teams are allowed to acquire up to 50 percent of their initial bonus pool. That would be a total of $2,278,600 for the Cubs, meaning they can still acquire an additional $1,315,600. That would be enough to cover the remaining difference and keep the Cubs from incurring limitations on next year's spending.

 The problem is that every other team now knows what the Cubs are up to with the international draft pool. They all know that the Cubs have overspent their allotment and will seek to get more slot values in trades before the deadline to offset their overage spending. But other teams have no duty to help the Cubs out of their problem. Other teams have been using their bonus pools to sign players. It would be in those teams best interests to NOT send additional cap money to the Cubs in deals so the Cubs will be forced to spend significantly less per player next season.

It is a familiar refrain that we will hear in the near future. The Epstein draft model was to overspend on the draft picks, but the new CBA made that nearly impossible with hard caps and harsh penalties. Epstein whined about the new CBA hindering his ability to stockpile talent. Likewise, we will hear that the Cubs rebuilding plans will stall next year if the Cubs are penalized by only being able to offer $500,000 bonuses to 16 year Latin ballplayers.

In any event, is this money well spent? The Cubs are on pace to spend more than a million dollars each on a hand full of foreign teenagers. This is the equivalent of first round draft slot money for six kids who have no real high level competition or experience.

High schoolers drafted in the normal draft only have a 0.5 percent chance of making to a big league roster during the professional career. It is not that much better for Latin teenagers. Only two percent of prospects signed out of the Dominican Republic make it to the majors. SI.com examined the signings of 3,099 Dominican amateurs from 2003 to 2010 and found that 18-year-old players were twice as likely to appear in the majors as 16-year-olds, and at a fraction of the price.

That is why many teams will sign as many international players as possible in the budget. The Blue Jays have averaged more than a dozen over the years, but at a fraction of the U.S. draft signing allotments for players chose after Round 10. 

The Cubs, with penalties, may spend $7.7 million for five players. With the odds that only two percent of foreign signees make it to the majors, the odds are that none of the Cubs signees will make it to the big club.

Then, one has to consider what the Cubs could have done with $6.25 to $7.7 million to better this season the current major league roster.  When Ricketts bought the club, he proudly proclaimed that the team was only one or two players away from competing for a championship. Many thought his statement was naive. But it was all about winning from Day One. Now, three years later the regression continues.

Overspending does not guarantee success.  The financial ability to spend more to cover one's mistakes is a crutch that many general managers have used in the past. But the Cubs are quickly turning into a small market team by diverting all capital and resources to develop real estate holdings at the expense of the actual baseball operations. Epstein's international spending spree may have been done because he will not be allowed to spend like a drunken sailor anymore once the Wrigley renovations begin.

ANOTHER DRAFT?

Maybe this is the plug that has kept the trading season from taking off full tilt.

MLBTR and MLB.com report that the league is going to conduct its new Competitive Balance Lottery today. Under the new CBA, in theory, small-market and low-revenue teams will have the chance to win extra selections in next year’s amateur draft. The ten smallest-market teams and ten lowest-revenue teams will have the chance to win extra selections in 2013.

How these extra draft picks are determined is confusing. Some small-market teams are low-revenue teams, but there are a few small market teams with high payrolls. Reports state that there are 13 clubs involved in the first-round lottery: the Diamondbacks, Orioles, Indians, Royals, Athletics, Pirates, Padres, Rays, Reds, Rockies, Marlins, Brewers and Cardinals. 

How the Cardinals need "competitive" help is somewhat baffling; and the Pirates are in first place in the NL Central. And the Tigers are a deep pocket team on par with the Yankees, Angels and Red Sox in payroll flexibility.

The first six selections will be made between the first and second rounds of next year’s draft. A second group of six picks will be available to the teams from the first group that didn’t get an early pick, plus the Tigers. 

The second group of selections will be made after the second round of the draft. 

But here is the key element of this new system: MLB teams can trade the draft picks they obtain in the Competitive Balance Lottery. The picks, which can only be traded once, cannot be sold or traded during the offseason. In theory, the draft picks could be involved in some of this summer’s deadline deals. 

So, a team not a party to the Lottery draft wants to get extra draft picks (i.e. the Cubs management would LOVE to add more draft picks as part of their rebuilding process), that means the big market and large revenue teams will pay and trade to get one or more of these high value draft slots.