For the second year in a row, teams seem to have little interest to splurge in free agency, with the luxury tax becoming a salary cap. The players are upset and the next CBA is likely to be a major storyline because of it. The current CBA expires after the 2021 season and the owners and the players will sit down to work out a new deal. The owners want to spend less on players, the players want to be paid more. That has been the core of what each side has wanted since the game’s beginnings. The current system is broken and I propose a fair resolution centered around a basic premise that I think most people will agree with: the players should be paid fairly for their production.
The current system is unfair. Players get called up from the Minor Leagues and receive minimum salaries for their first two seasons. They then receive salaries decided by arbitration for the next four. Those salaries are typically significantly lower than what the player would earn on the free agent market. Players can have MVP quality seasons and earn a minimum salary for their accomplishments. Mike Trout received $492,500 for his 10.5 WAR in 2012 and $510,000 for his 9 WAR in 2013; Aaron Judge received $544,500 for his 8.1 WAR in 2017; Bryce Harper received $2.5 million for his 10 WAR in 2015; Mookie Betts received $566,000 for his 9.7 WAR in 2016; Kris Bryant received $652,000 for his 7.4 WAR in 2016…
On the other hand, when players enter the free agent market, they can sign contracts that end up crippling teams financially. Albert Pujols received $25 million for his 1.3 WAR in 2017 and $26 million for his -1.8 WAR in 2017; Jacoby Ellsbury received $21 million for his 1.7 WAR in 2017 (he received the same amount in 2018 for not playing at all); Chris Davis received $23 million for his -2.8 WAR in 2018; Homer Bailey received $21 million for his -1.5 WAR in 2018; Jason Heyward received $28 million for his 1.6 WAR in 2018…
The system is clearly broken, but it seems almost impossible to come up with a solution that both sides could agree on. The obvious solution for the players would be an ability to become free agents earlier, but that would mean that teams would have even less control over their players, a proposition that seems to be a non-starter for owners. Another possibility could be players having their salaries decided through arbitration starting from their first season, but players would still be underpaid until at best their final pre-free agency season.
The owners can try to limit free agent salaries through instituting a salary cap, and they already did something similar with the luxury tax. However, that doesn’t stop teams from giving out bad contracts. Can teams really be blamed for wanting to be careful with their investments? What about the opt-outs that star players are now insisting on to be put into their contracts? This means that players can end their contracts after a good season and either leave the team or force them to pay them more money.
It all comes down to a very simple solution: players should be paid for how they perform. It’s fair for both sides. Arbitration pays for production already, so why not pay based on WAR? It’s more accurate then focusing on arbitrary statistics such as saves. The two sides decide on how much 1 WAR is worth and then players are paid based on their production for their 6 seasons of team control, with a minimum salary for players who accumulate 0 and negative WAR. The players are no longer underpaid and that should satisfy the player’s union. They might have an issue with minimum salaries for bad seasons, but the trade-off should be enough. That said, the owners are unlikely to accept a system where they can no longer save money on players before they hit free agency. I have a solution for this however: an improved free agency system.
The players receive a major benefit by being paid fairly pre-free agency. As a result, they have to give something back in return. What should that be? First, no more opt-outs in contracts. I think that it’s a small price to pay, as players don’t always use opt-outs and presumably are prepared for the possibility of honoring their contract, if they decide not to. Another improvement is giving players an interesting option: they either sign a regular free agent contract or a contract based on value (where they’re paid for a few years with a high AAV and the latter years are based on WAR or the whole contract is based on WAR). More importantly, if a player has two consecutive seasons of low WAR (depending on position) and in a contract that’s for 5 years or longer, the team has a right to void it. That is reasonable in my opinion.
I think that this is a fair trade-off: players are paid fairly pre-free agency and owners receive benefits to make investments in players on the free agent market more appealing. The player’s union might say that assigning monetary value to WAR might limit how much the players can earn, but a provision could be made to decide the monetary value of WAR every couple of years.