Gain a Year of Contractual Control in Six Days With This One Weird Trick!

The condensed season makes service time manipulation easier than ever.

After an opening week in the MLB that made clear that this season has been condensed, not shortened, it’s already time for callups. As if they needed to farm just a tiny bit of extra XP to level up, dozens of teams’ top prospects have suddenly become MLB-ready. For baseball superfans who keep track of MLB Pipeline rankings (or disregard them in favor of their preferred prospect lists), this almost means that MLB opening day happens all over again every few days when a new player debuts.

For many of these players—hello, Tyler Stevenson!—getting your first crack at MLB competition is a lifelong dream, and I don’t want to do that experience a disservice. And for those of us who have also been waiting, the opportunity to see whether Nate Pearson, Spencer Howard, Gavin Lux, and Jo Adell can light the league on fire is what makes each year new and interesting. But this year, players who debut as few as six days after opening day will be too late to earn a full year of service time, giving their teams another year of underpaid contract control. With rookies coming up more polished and powerful than ever, their teams’ transparent manipulation of their contracts to pay them pennies on the dollar compared to what they’ll be worth is perhaps the strongest evidence yet that an already obviously broken system has to go.

If you’re not familiar, players accrue service time for being on their team’s 26-man active roster or on the injured list. After 173 days at the big club, players accrue what counts as one “year” of service time. Until a player hits three years of service time, their teams set their salaries, typically set at or just above the minimum, which was $563,500 in 2019. Once a player hits three full years, they become eligible for salary arbitration, a process through a neutral arbiter that will set a player’s salary. Teams and players typically try to avoid these hearings and will negotiate the salaries during these years.

Though teams only have six years of service time control, they can wait to call up players until there are fewer than 173 days remaining in the season to make sure that they end the year with less than a year accrued. Because the maximum number of days of service time you can earn in a year is 173, players can never make up being even just one day behind. When this happens, the team gains control of that player’s contract for an additional calendar year. There are other complications worth mentioning—I suggest checking out explanations of player options, super two, and the rule five draft—but the core concept is that teams can gain extra time on a player’s contract extremely easily, and typically do so by making them stay in the minor leagues well past the point at which they’re benefitting from being there.

In our current condensed season, that waiting time to secure an extra year of team control is just six days. And even if players have months accrued time, teams will have to wait less time than ever for there to be fewer days remaining in the season than their players would need to reach the one-year benchmark.

If you read faster callups and wonder why I’m disappointed, I fully understand why that seems strange. But without any real minor-league games for players and such a short waiting time, there’s no realistic case to be made that players are working on their defense, plate discipline, or command. And that means when these rookies inevitably take the league by storm, the money fans shell out to support them in the form of hats, tickets, or TV packages won’t reach them for years.

Fixing that issue isn’t nearly as simple as waving a wand and making service time contract loopholes disappear. But to fix it, it’s important to understand exactly what the scope of the issue is.

 


 

The idea that teams can and should pay newly-promoted players low wages isn’t something specific to the MLB or something without at least some underlying logic. When writers discuss WAR, that hypothetical replacement player is usually a AAA player, or if you prefer a “AAAA” player that’s too good to continue to develop in the minors but not good enough to contribute to a winning team. If you keep up with Fangraphs’ efforts to find the price of one win in free agency, assume AAA players being called up are the 0 win replacement players, and then decide that they have to be paid something for their troubles, you’ll end up with something similar to the rookie contract salary system.

That thinking has generally matched efforts to map players’ growth curves, which measure how good players are throughout their careers in comparison to their peaks. The conventional wisdom, backed up by some data, is that newly promoted players aren’t yet contributing to their clubs at the same level that veterans are and that they need time to adjust and continue to develop before peaking in their late-20s then starting to decline around age-30. Bill James’ research points toward age-27 being the year when players typically hit that peak; other approaches have placed that number as late as 29.

But most of those numbers include data from hitters as far back as the 1920s, before steroids were banned and modern scouting and training transformed how teams develop players. Eno Sarris’ research on aging curves in the post-steroid era paint a different picture: players enter the league as good as they’ll ever be and start to decline as early as 27. There is no peaking: in his words, “You’re born and then you start dying.”

The assumptions that underlie rookie contracts—that teams are calling up replacement level players and turning them into useful veterans over time—are about as obviously not true as the Blue Jays’ claim that Vladimir Guerrero Jr. was working on his defense last April.

There’s probably no individual case that proves this point as clearly as Kris Bryant‘s. After being in altogether a different dimension than NCAA pitching, Bryant was drafted second overall in 2013. By the end of 2014, he was already clearly the best player in minor league baseball, and during spring training in 2015, he was starting to show that he was also better than pretty much everyone in the MLB as well, hitting nine home runs in just 40 at-bats. So naturally, the Cubs optioned him to AAA Iowa to work on his defense. He made his MLB debut on April 17, 2015, the day after the Cubs secured another year of contractual control, but still managed to play 151 games and accumulate 5.3 bWAR over 151 games. In total, the Cubs paid him just less than $2.2m for his first three years in the MLB, during which he accumulated 18.2 bWAR, hit 104 home runs, and won both the NL MVP and a World Series ring. When Bryant filed a grievance with the MLB in an attempt to get to free agency after this season, an arbitrator determined that there wasn’t enough evidence that the Cubs had manipulated his service time, allowing the Cubs to retain Bryant through 2021. Even in the most clear-cut case of contract manipulation—an all-star level player was called up a day after the club secured another year of contract control!—the rules on the books could do nothing for him.

When Kris Bryant likely takes the field in 2022 after having signed a free agent deal (almost undoubtedly with someone other than the Cubs, co), he’ll be 30 years old, six years past his MVP peak. Spotrac estimates his market value today at $25.8m per year over a 10-year contract, but considering that most of the value from a contract like that would be front-loaded, that one extra day of “working on his defense” will likely cost Bryant almost as much money as he’ll earn from the Cubs before hitting free agency. But the problem is greater than that: players who perform at an elite level have to wait until year four to get paid even a fraction of how much they are worth to their team. Assuming $9m/WAR for free agents on the open market, which has been near the going rate for each offseason since Bryant’s promotion and might even be an underestimate, the Cubs have saved almost $200m on Bryant’s contract compared to what it would have cost to sign a comparable free agent:

Kris Bryant Salary and bWAR, 2015-2019

 

Of course, Bryant isn’t the only player who has made pennies on the dollar for his contributions to a title-winning team. Since 2010, only the 2011 Cardinals and 2013 Red Sox managed to win a World Series without one of their top-5 players by bWAR making less than $1m per year. Most of those players were yet to reach arbitration: Buster Posey in both 2010 and 2012, Brandon Crawford in 2014, Kris Bryant and Kyle Hendricks in 2016, Carlos Correa and Alex Bregman in 2017, Andrew Benintendi in 2018, and Juan Soto last year. Holding elite prospects down longer than is really necessary is what financially enables chasing those “last pieces” that finish off a rebuilding project.

Fixing the MLB’s rookie compensation issue doesn’t just mean fixing a loophole. The decade-long contracts teams hand out to players past the peak of their again curves are paid for with money saved by not paying rookies, and so undoing this compensation system might mean that teams will have less to spend on free agents. Barring an unexpected change of heart of ownership about their willingness to invest profits back into payroll, future first free-agent classes might enter a market with less money per WAR available. And the cornerstone of the very first of those classes would be none other than Kris Bryant.

So what needs to be fixed?

  1. Anything that continues to give clubs a pathway to getting seven years of team control can’t be acceptable. If that means moving from making game-by-game counts of service times to a model based on promotion windows, such as a system where teams can only call up players to an expanded roster for the last quarter of the season without losing a year of control, I could see that working.
  2. Any changes to how contracts work also need to come with anti-exploitation rules. Teams have a history of all but telling us through press releases that they intend to exploit service time or performance bonus clauses, and players have had no meaningful way to fight back. It can’t be good enough that teams are technically within the letter of the law on player contracts—if they’re taking concrete, consistent steps to keep players off the field, those players need to have some recourse.
  3. A solution shouldn’t make the pathway to the majors harder for the “organizational guys”—the 40-grade prospects who project as depth and could turn into more given the chance. Most clubs haven’t historically abused service time to earn a seventh year of control with these sorts of players, likely because they might not be on the payroll in four years.
  4. We have to see movement on rookie salaries over the next decade. Every other major sports league has mechanisms to make sure that the top players that debut each year receive a paycheck that represents the viewers and revenues they bring in. If we see another player enter their third season as the reigning MVP making a salary less than what Jose Iglesias received in free agency this past summer, we will know that the pillars of what the MLB has built remain intact.

 


 

If the players want to pick a winning fight, they need a simple, bold message that the public fans can get behind. And there’s nothing easier to understand than demanding pay them what they’re worth.

There are dozens of different ways to give more money to the players at the top of the aging curve—I’m absolutely in favor of a blanket raise—but a core component should be higher minimum salaries for the top-performing rookies promoted each year. It’s clear to see that players such as Juan Soto, Pete Alonso, Fernando Tatis Jr., Chris Paddack, and Mike Soroka will all be worth more to their teams than the $600,000 that all of them are likely to receive. Want to fix that? Mandate that they’re paid more.

There are more than a few paths to make that happen. I’m personally in favor of higher minimum salaries for the top 10%, 5% and 1% of all new rookies by something like bWAR, but I could see plenty of other routes to the same endpoint working, whether that’s making an All-Star or All-MLB team, receiving a certain number of Cy Young, MVP, or Rookie of the Year votes, or even just clearing certain statistical barriers. A combination of these might work best, with potential benefits stacking.

In order to keep teams from hiding players in the minors, a very similar provision could work for the top tier of players in AAA. If the top 5% of players in WAR or WRAA—again, substitute or supplement with another path if you’d like—automatically had their service time clocks start on opening day the following season, then teams would have their hand forced. If players really did need additional time, teams could still keep them there, but without the contractual incentives.

One of the reasons I believe this could be an especially effective pairing of policies would be that it would put the cheapness of owners on display for fans in a way that local sportswriters could easily explain and translate into outrage. Imagine a situation where the Orioles had to explain to their fans that Ryan Mountcastle wasn’t playing because he hadn’t earned the right to start over Chris Davis—the good folks at the Baltimore Sun would have a field day tearing into the Angelos family for trying to make sure that Mountcastle didn’t play his way into a raise. Or, if the Mariners had to make the decision to bench Jared Kelenic to hurt his AL ROY campaign late in the season, the losses they’d incur in the form of fan protests would likely be far greater than any savings they’d muster.

Of course, fans aren’t just a bludgeon to be used against cheap owners. I’m not going to try to calculate how many more fans would tune in, attend games or buy merch if all 30 clubs fielded teams that aimed to win, but each team undoubtedly misses out when it chooses to keep its best prospects in the minors past opening day. For the Orioles, Tigers, Marlins, Pirates, Mariners, and Giants, Opening Day might be the best-viewed game of the year, and not showing off their brightest new stars when the most eyes are watching is a missed opportunity to retain the occasional fans whose money they need to work hardest to earn. Contrary to the MLB’s typical positions, baseball is a fun sport that fans will willingly tune in to watch. Pushing owners to play their best players will almost certainly increase revenues, even if it costs somewhat more.

There are definitely other routes that could be taken to pull off largely the same changes. Players could reach arbitration earlier instead of earning automatic raises, which would probably lead to similar outcomes. I could also see a system in which teams are given two tiers of rookie contracts, one designed for depth pieces that lead to free agency earlier but have a lower base salary, and another tier that pays much more during pre-arbitration years but retains the six years of control that clubs seem to want. I’m definitely happy to see clubs sign top prospects to long contracts with large guaranteed sums in exchange for buying out free agency years, but I don’t want to rely on clubs wanting to appear good-willed (the fact that Ozzie Albies and Ronald Acuña might still be underpaid despite signing these extensions doesn’t bother me much—they’re still doing far, far better than many of their peers).

We shouldn’t have to be in this position where we assume the worst of front offices’ intentions, either. Their rookies are ready to take the league by storm. We clearly want to see them do the same. And the MLB shouldn’t be giving teams cover to delay good baseball just because it doesn’t line up with the plans of someone who doesn’t even put on cleats.

 

(Photo by Brian Rothmuller/Icon Sportswire)

Alexander Chase

Alexander Chase starting playing fantasy baseball in 2010 because he didn't have a real team to support. Since moving to Baltimore, he still hasn't found one, but he likes Camden Yards. Alexander tweets about sports at @chase_rate.

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