MLB’s CBA Loophole Was Wide Open for the Hedge Fund Crew

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LOS ANGELES, CA - OCTOBER 18: Kris Bryant #17 of the Chicago Cubs reacts after striking out in the eighth inning against the Los Angeles Dodgers in game three of the National League Championship Series at Dodger Stadium on October 18, 2016 in Los Angeles, California. (Photo by Harry How/Getty Images)

After Kris Bryant’s service time grievance was decided in favor of the Chicago Cubs, he said he holds no ill will toward the organization. True or not, he likely knew the inevitable outcome when he filed. If he remains with the Cubs for the duration of his years of team control or is traded, he will not be a free agent until after 2021. Had the decision been in his favor, his free agency would have been after 2020.

The club’s clear attempt to keep him under team control for an extra year was done intentionally. Had there been a clear and fair performance based analysis, Bryant’s spring training numbers in his rookie year of 2015 warranted nothing less than him being on the major-league roster from day one.

In 14 spring training games, he posted a slash of .425/.477/1.175 with 9 home runs. Nothing more needs to be said as to what the Cubs were doing. The goal was to maintain that year of team control by keeping him in the minors long enough so he would not reach the service time cutoff for a single year.

Bryant was recalled from Triple-A once he could not reach the number of days where he would garner a full year of service time. He won the National League Rookie of the Year; the Cubs made the playoffs – a year earlier than Theo Epstein’s front office expected; and advanced to the National League Championship Series before being eliminated.

From the Cubs’ perspective, there is no denying that it was a successful strategy. Developmentally, it did not hurt Bryant. He won the Most Valuable Player in 2016 and the Cubs won their elusive World Series.

Still, Bryant’s displeasure with how the Cubs manipulated his service time led to the grievance. Experts and analysts knew how the grievance would be decided and they were right as it ended in the Cubs favor. However, Bryant’s move – while not self-sacrificing on the level of Curt Flood as he protested being traded and fought baseball’s reserve clause – will impact future players.

A year before the Cubs and Bryant even became a story, the Houston Astros (remember them?) were accused of using worse tactics with George Springer. At the time, the Astros were in year three of their rebuild and were on their way to losing 92 games. This was a 19-game improvement over 2013. Springer, 23 at the time and a consensus top-20 prospect in baseball, had been approached about a pre-promotion contract extension in 2013, which he rebuffed.

According to him and his agent, the Astros responded by keeping him in the minors to stop him from accruing service time. This would not have been an issue had he signed the contract extension. In the end, he did not file the grievance, but this is something the players were aware was happening and have been clearly seeking methods to prevent.

This illustrates the cold-bloodedness and acceptance of reality that is the hallmark of most MLB front offices in today’s game. Keenly aware of their right to use this sleight of hand and knowing they will not face punishment for it, there’s no reason not to do it. And once there’s no reason not to do it, teams will push further and further to the extreme.

Before contract and finance experts were employed by every front office and whose sole function was to manipulate the rules, if teams even thought about this sort of maneuvering, they kept it to themselves and were opaque in how it was done. Nowadays, success is not defined by winning a championship, but by the number of books written about how that championship was won; whether that front office formulated an innovative strategy; and if the owner spent as little money as possible to win it due to direct action on the part of that front office, ethical or not.

The spirit of the service time rule was not so teams could base their decision to recall a player based on how long they would keep his salary as low as possible. It’s doubtful that the MLBPA negotiators – or even the MLB negotiators – even considered that as an alternative. When the highly educated financial whiz kids entered baseball and sought to maximize profit while minimizing spending. Part of that was exploiting an enormous loophole.

The question is: Can the loophole be closed or would a viable solution simply be another challenge for front offices to decimate?

Bryant’s case was clear-cut since he demolished the ball in spring training. But not all cases are that obvious. Certainly, teams can do what the New York Mets did with Pete Alonso in spring training 2019 when they told him if he earned the right to be on the roster to start the season, he would be on the roster to start the season. He did and he was.

In the long run, the argument could be made that the Mets would have been better served to send him to the minors for two weeks to get that extra year of team control just like the Cubs did with Bryant. To their credit, the Mets did accrue some capital with players throughout baseball when general manager Brodie Van Wagenen told Alonso he’d be judged on merit and, with ownership approval, followed through. Had the Mets demoted him to save a few bucks, would Alonso have hit 53 home runs, posted a .941 OPS and, as a rookie, walked into a clubhouse full of veterans and took over as the team’s unquestioned leader like Derek Jeter did with the Yankees in 1996?

Maybe.

But it would also have caused an unnecessary fissure between the sides. Perhaps the Mets’ treatment of Alonso will end up saving them more money due to the player’s potential agreeableness in signing a reasonable contract extension and not squeezing the team for every dollar to recoup what he would have lost.

Most teams will not do what the Mets did while they have the option to save some money.

Change can only be achieved by adjusting the rules. While there are parameters that MLB and the MLBPA must adhere to, there will be attempts to circumnavigate them. The current CBA expires after the 2021 season. The negotiations are bound to be contentious not only because of service time manipulation, but accusations of collusion to keep the salaries of mid-level free agents in line.

Due to clear displeasure among the rank and file player, the MLBPA will take a hard line against this behavior in the next labor deal. Currently, the options are as follows:

  • Change the template for service time by, for example, cutting the number of days in the first year in half so the player’s absence from the big league roster will damage the club.
  • Let players receive salary arbitration after two years instead of three.
  • Let the players be free agents after their fourth or fifth year instead of after the sixth.
  • Give the players a legitimate process to complain with a panel to hear the case and decide when the reason for the demotion is so blatant that the club doesn’t even deny what it is doing.

The adversarial relationship between club and player is the worst it’s been since the days of collusion in the late-1980s. The difference is that back then, the teams were clumsy about what they were doing, unabashedly flouted the free market and the CBA to smother free agency, and left the courts with no choice but to decide in favor of the players. It ended up costing them exponentially more than it saved.

The problem is that front offices are no longer that clumsy and outright stupid.

Blaming Epstein for sending Bryant to the minors is too simple. The benefit to do it was there, the Cubs did it, and it worked. It’s a technicality that the MLBPA negotiators never considered. Now, they not only need to consider it, they need to fix it too.