MLB’s New CBA & What It Means for the Indians: Part 4 – International Draft?

Yesterday, I left you with a bit of a teaser about the new CBA.  Something about a “new” draft.  Before we get there, though, it’s important to remember what the current draft consists of.

Here’s something I wrote a couple years back:

[T]he Rule 4 draft is what we’re more likely to think of as a traditional draft, where amateur players are selected by professional teams in the opposite order of the previous year’s standings.  Like the NFL Draft, a team is basically picking from a pool of draft-eligible players.  The sticking point is that to be draft-eligible for the Rule 4 draft, a player must meet a number of requirements:

• He must be a resident of the U.S., Canada, or a U.S. Territory (like Puerto Rico).  That means that most Latin players are NOT eligible for the draft, meaning that they are signed rather than drafted.  Most players taken are U.S. players—either at the collegiate-level or out of high school.
• High school players must have graduated from high school.
• Players at four-year colleges are eligible after their junior year or their twenty-first birthday (except in D-III schools, where they can be drafted earlier).
• Junior College (JUCO) and Community College players are draft-eligible at any time (like Bryce Harper).

Now, none of that has changed under the new CBA, so far as I know.  But something that is going to change is the addition of a new draft-like system to deal with all those players who aren’t U.S., Canadian, or Puerto Rican residents.

From the CBA (sorry for the long quote, but it’s worth it):

International Talent Acquisition

1. By December 15, 2011, the parties will form an International Talent Committee to discuss the development and acquisition of international players, including the potential inclusion of international amateur players in a draft or in multiple drafts.
2. For the 2012-13 signing season, each Club will be allocated an equal Signing Bonus Pool.
3. For each signing period after 2012-13, Clubs will be allocated different Signing Bonus Pools, based on reverse order of winning percentage the prior championship season (i.e., the Club with the lowest winning percentage the prior season shall receive the largest Pool).
4. Bonus Regulation of International Amateur Players

• Beginning in the 2013-2014 signing period (July 2, 2013 – June 15, 2014), Clubs may trade a portion of their Signing Bonus Pool, subject to certain restrictions.
• Clubs that exceed their Signing Bonus Pools will be subject to the following penalties in the 2012-2013 and 2013-2014 signing periods:

Excess of Pool Penalty (Tax on Overage/Draft Picks)

• 0-5% 75% tax
• 5-10% 75% tax and loss of right to provide more than one player in the next signing period with a bonus in excess of $500,000.
• 10-15% 100% tax and loss of right to provide any player in the next signing period with a bonus in excess of $500,0000.
• 15%+ 100% tax and loss of right to provide any player in the next signing period with a bonus in excess of $250,000.

The penalties for exceeding the Signing Bonus Pool will increase beginning with the 2014-2015 signing period if a draft or drafts is not agreed to by July 2014.

So if you didn’t read all that, I can’t really blame you.  Basically, it says that MLB is considering a draft for international players.  And even if it can’t pull that off (which, if you can’t tell from all the bullet points, would be a logistical nightmare), they’re going to cap spending on international free agents in coming years in the same way that they cap spending on the Rule 4 draft.

For reasons similar to those discussed yesterday, this is bad for those teams who are trying to develop a competitive edge in any market other than the free agent one.  It funnels more money toward free agents and less toward the sort of gambles that small-market teams must make to succeed.

But, as was mentioned in the comments yesterday, why doesn’t this affect all teams equally?  After all, it’s not like the poor teams are the only ones bidding on 15 year old Venezuelan short stops.

I think of it this way.  Teams basically have three major ways to add talent to their system: (1) current MLB players through trades or FA signings; (2) the Rule 4 Amateur Draft; and (3) international signings.  By making the latter 2 a more level playing field than ever before while leaving the first one completely uncapped, teams with more money just got an even bigger advantage than they used to have.

Don’t get me wrong.  I’m generally in favor of leveling the playing field by capping the spending on the draft and international free agents, and that’s what this new CBA is out to do.  In the NFL, it’s a great system because the league has a salary cap.  But when you refuse to cap player salaries in any way (which the omnipotent MLBPA will never allow), you end up making the current situation even worse.  Before, smart, small-market teams could at least find value in the little inefficiencies produced under the old system.

By removing those inefficiencies, the Indians are left with very little to exploit.  If you thought the aughts were a dark time for small-market teams, the teens could get even worse.

Tomorrow, I’ll try to pull some bright spots out of this morass.  And yes, I think there are a few.  You just have to squint a bit to see them.