I promise this is the last time for a while I’ll write about Cody Bellinger, but he really is a good use case for a particular proposal that I’ve been considering. All the way back in December, we knew
the Yankees had offered the former MVP a five-year deal worth around $150 million dollars, and the very slow dance the two camps have done around each other finally ended last week. Bellinger ended up with slightly more than that total value and good for him, but the negotiations also served as the latest lightning rod for some kind of free agent signing deadline system.
As far as I can tell, the goal of a signing deadline is to compress all the rumors we get all offseason on social media into November and December — we’ll still get the “X team has checked in on Y player” churn; it’ll just all come in six weeks instead of over 15. Along the way, apparently hang any man unlucky enough to not get an offer before the imposed deadline, and spare no thoughts for the millions of dollars players will lose when teams lowball them with 48 hours left in the signing period. That doesn’t matter so long as our December is a little more exciting.
Still though, I think there’s value to teams and players alike to know where they are playing with more than three weeks to go before spring training opens, especially for the big names. From the team’s perspective, knowing where the bulk of your wins are going to come from helps you make those moves on the margins — do we sign that reliever at $8 million or do we trust a couple of the Triple-A arms to step up? Those kinds of questions are easier to answer, like “Where can we find that one marginal win when we’re confident we’ve banked four-to-five with Bellinger?”
So, in that interest, I thought about what a real “signing deadline” could look like, and surprisingly enough it’s not one single date. The focus cannot be on when a player signs but rather how that signing impacts a team’s CBT threshold, and as such we need tiers. For all contracts signed before December 15th, which clears the holidays and generally covers the Winter Meetings (which ended on December 11th this past year), you get a 15-percent CBT discount on the term of the deal.
Note that the total cash amount stays the same — the Yankees would be charged $136.435 million by CBT estimates, or $27.285 mil per year, but Bellinger takes home the full $160.5 million. This is critical to ensure the proper incentives on both ends. Teams need a reason to engage early with free agents, the earlier you do, the more CBT relief you get. However, players need an incentive to actively negotiate, rather than spin in a chair the way we saw Bellinger’s camp do this winter.
To accomplish this, for any deals signed between December 15th and January 15th, the discount is halved. Teams realize a 7.5-percent reduction in the term of the contract, or again in Bellinger’s case a $148.4625 million CBT hit, $29.6925mm AAV. After January 15th, teams will pay the full value of the CBT hit.
These numbers are negotiable—maybe 10 and 5 percent are easier to work with on the back of the envelope—but the concept is consistent. We need to better align the incentives for teams and players to have clarity, while doing the best we can to hedge against the opposing incentives to save and earn as much money as possible, respectively. This tiered system also guards against the last-day lowball, since should a team offer a clearly-below-market rate deal to someone like Bellinger on December 14th, he stands to lose just as much as the offering team does by simply waiting another week.
All in all, I still prefer the more-or-less open auction system that MLB already offers. There are some things I would change, some ways that revenue sharing could be tweaked to prevent smaller-market teams from resting on laurels, but on the whole additional deadlines or even tiers ends up a solution looking for w problem — or at least, an outsized solution looking for a minor problem. Still, if you must, the focus needs to be on CBT outlays, not condescending Twitter posts.
