Sports

Baseball Can and Should End Service-Time Manipulation

Yankees starting pitcher Masahiro Tanaka (19) during the first inning at Yankee Stadium, Apr 14, 2019, Bronx, N.Y. (Brad Penner/USA TODAY Sports)
The solution is to tie free-agency eligibility to a player’s age.

When people have every reason to pretend they are doing something other than what everyone knows they are doing, that’s a scandal. And it’s often the breeding ground for a larger scandal. Everyone who watches Major League Baseball believes that its teams sometimes keep players unnecessarily in the minor leagues to manipulate their “service time,” in order to delay their eligibility to become free agents. It’s such a common perception that it tends to dominate media coverage of hot prospects, both in spring training and in the case of late-season call-ups. The teams, in turn, must pretend that this is not what they are doing. Thus, the scandal.

It doesn’t have to be this way, and it shouldn’t. The problem is the rules. Actually, the problem is deeper than the rules: Baseball is exempt from the antitrust laws, and players can’t go anywhere else once they are drafted by a team, so the game is not governed by a free market for labor. On the other hand, the players are unionized, and the free-agency rules are the subject of collective bargaining, so the game is also not run paternalistically for the exclusive benefit of the owners, let alone in the best interests of the game as a whole. The need of each side to get something of benefit at the collective-bargaining table before surrendering anything of value only exacerbates their tendency to see any potential change to the rules solely through the lens of bargaining chips for their own self-interest.

Still, both owners and players should realize by now that the status quo isn’t good for anyone. Here’s how it works. Major-league teams draft amateur American players out of high school or college and own their services until they have completed six years of major-league “service.” (There are different rules for international players, but I’ll simplify the discussion here by sticking to the example of American players). The players have very limited leverage during those years, and while they are eligible after a certain point to contest their salaries in arbitration, the teams are effectively able to pay them below-market salaries and have certainty about which players will be on their rosters year to year.

Players who sign long-term deals years before they are free-agent-eligible often take a significant discount from what they could get on the open market, as witnessed by the Braves last week signing 22-year-old Ozzie Albies to a seven-year, $35 million deal. By contrast, once players become eligible for free agency, their salaries may skyrocket. The market for free agents is not a good one for the teams: Teams built around a lot of free agents tend — unless they are the resource-rich Yankees — to be unable to compete with those that have more of their roster composed of cost-controlled players.

The system is unfair to the players, but it is not arbitrary unfairness; giving every team a certain number of years to control salaries for players benefits the game as a whole, encouraging teams to invest in young talent and preventing the wealthiest teams from wholly dominating. Sports leagues, after all, are not like typical customer-serving businesses; the customers won’t have much fun if all but a couple of teams are driven out of business. The tradeoff of more team control is a healthier sport, which pays off for players who are good enough to make it on the free-agent market.

But “it’s good for the teams and the game for the teams to control the players” assumes that the teams are using that control to play those players in order to help the teams win games, draw fans, and make money. That is where the problem with the current system comes in. “Service time,” because it is keyed to the number of calendar days on the roster, turns out to be malleable for a team’s needs — and holding a player back a few weeks can extend his time under team control for a full year. That mismatch in incentives has led to some notorious cases: Three of the last four National League Rookies of the Year (Ronald Acuña Jr., Cody Bellinger, and Kris Bryant) were brought to the majors in mid April of their rookie seasons. A recent Baseball Prospectus analysis found a spike in these sorts of early call-ups in the past four years, but proof that the teams were doing this intentionally in any particular case can be elusive. Bryant has filed a grievance.

The teams know that this practice has costs. If a postseason berth comes down to a close wild-card race, losing a game or two early can be terribly damaging. That, along with the need to avoid being completely obvious about manipulation, places some upper limit on the practice. This year, hot prospects including the Mets’ Pete Alonso and the Padres’ Chris Paddack and Fernando Tatis Jr., all started the season on the roster, not coincidentally for teams that had splurged with new veteran, win-now acquisitions in the offseason.

The solution, at the negotiation of the next collective-bargaining agreement, is remarkably simple: Tie free agency to player age. (This would have the added bonus of giving players a disincentive to lie about their ages). An age-based system would give teams more incentive to bring very young players to the majors as soon as they could help the big club, giving fans more time to enjoy the very best homegrown stars.

Only a few modifications to a pure age-based free-agency system would be needed to avoid unfairness and skewed incentives. One, make the age of free-agent eligibility different depending on the player’s age when drafted, so teams aren’t penalized for drafting players who went to college. Two, some allowance could be made to give a minimum amount of team control over players who reach the majors very late (most of whom are not major stars), especially players who miss an entire season of minor-league playing time owing to injuries (a common issue for pitchers). Few teams are likely to sit a prospect out of baseball for an entire year just to score some extra service time. And an age-based system would be easier for fans to follow than the more complex and obscure service-time rules.

Would the teams and players go for this? That may depend on where the age limits are set, which is an issue of a more traditionally zero-sum nature. That question has become more urgent in the past decade, as rising fastball velocity and the end of the steroid era have dramatically reduced the number of players having star-level seasons well into their thirties. Changes in the patterns of careers and aging are already driving pressures for teams and players alike to rethink the economics of long-term contracts.

Neither side is likely to put the game’s best interests over its own. Still, even in the context of apparently zero-sum negotiations, creative solutions that give both sides something can help break impasses. An age-based system would benefit the owners and fans in one concrete way: by giving teams control for a proportionately longer period over the players who come up the youngest, who tend to be the biggest stars. It would also benefit the players, however, by removing the ability of owners to game the system. And it would end an ongoing scandal.

Dan McLaughlin is an attorney practicing securities and commercial litigation in New York City, and a contributing columnist at National Review Online.

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