Originally written on Fangraphs  |  Last updated 11/22/11

This past weekend reports surfaced that the current CBA had been amended, specifically with regard to draft pick compensation. According to Ken Rosenthal’s tweets, teams will no longer have to forfeit picks for signing type A Relievers. The amazing thing is that it only took us two posts and less than 100 comments to fix this problem. Okay, maybe we can’t take all the credit for changing the new CBA, but the owners and players clearly read your comments, because not only will there be no more compensation for type A relievers, but the Elias Ranking will be gone as well (starting as soon as next year). Good job, influential FanGraphs commenter!

As you, the readers, prescribed, compensation will be determined in the future by how much money a team spends on a player. No longer will Baseball rely on “A Statistical System for the Ranking of Players”, but rather the invisible hand of the free agent market. According to the Associated Press, there will be a hard cut off at $12.4 million; Players that are offered at least a one year salary of $12.4 million or more by their former team, and elect to sign elsewhere, will net compensation for their former team in the form of some sort of sandwich pick (the details should be announced later today when the new CBA is officially signed).

$12.4 million seems like an arbitrary cut off, but it is a step in the right direction and is subject to change as the CBA matures. It seems to me though that there is a stark difference between a player that is signed for $13 million a year and one that is signed for $25 million a year, and yet both will be considered equal under the new system. It is not unreasonable to have multiple tiers for salaries, even one extra tier at say $18 million, could make a big difference, and should be considered as a future amendment.

The loss of reliever compensation is in effect now. Unfortunately for the Phillies, this new clause is not retroactive to the beginning of free agency, which means Philadelphia will have to forfeit their first round pick in this year’s rule 4 draft for signing Jonathan Papelbon. This news makes the Papelbon signing seem a bit more questionable, but the Phillies cannot be blamed, assuming they could not see this new rule coming. It will be interesting to see how teams react to this rule change when it becomes time to make offers.

Under the new system teams will no longer forfeit their picks, instead they will be placed at the end of the round. Details of how MLB will determine the order for those teams placed at the end of the draft are still uncertain. I would imagine that the order would depend on the size of the contract, but it could potentially be determined chronologically, with teams signing players later ending up later in the round.

Another issue that is rarely talked about, but could prove to be important, is the quota clause in the soon to be expired CBA. The clause states that, “If there are from 39 to 62 [Free Agents], no Club may sign more than three Type A or B Players. If there are more than 62 [Free Agents], the Club quotas shall be increased accordingly.” It is unclear what “increased accordingly” actually means in practice, but if the new CBA contains a similar clause, the new compensations system could prove to be a thorn in the side of big spenders. Imagine if, for the lifespan of this new agreement, the Yankees could only sign four players above the threshold. The quota takes on a whole new meaning now that compensation is defined by the market, and could play a pivotal role in how teams attack the offseason. My guess is the quota will be removed from the coming CBA, but we’ll have to wait and see.

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