The Cincinnati Reds and MLB's Collective Bargaining Agreement

To many there's this odd connotation that 'labor' and 'unions' are things of a previous age, products of the squalid conditions during the American Industrial Revolution of the late 1800s or the crumbling of those established industries a century later.  There's a pinch of socialism attached to those labor unions, and perhaps the fall of multiple socialist regimes in the 1990s at the feet of capitalism led many to forget that they exist in our corner of the universe at all.

Except you're reading this on a baseball blog, a corner of the internet dedicated to one part of a near 10 billion dollar business, one that captures our allure in kid-like fashion for the bulk of the year thanks to games and sport and athleticism.  What we often overlook, either through convenience or through indifference, is that one of the single most effective and powerful labor unions in all of modern American business facilitates all of what we follow so closely, and is in many ways more than half the reason there's an Opening Day parade that is celebrated so wholeheartedly in Cincinnati the first week of April every year.

The Major League Baseball Players Association (MLBPA) has operated as a recognized union since 1966, and has evolved to serve the collective interests of the finest baseball players in the world in negotiations with the owners and operators of the 30 MLB teams, the business arm that helps the talent in the league take home its rightful portion of profits from such a gigantic enterprise. For the previous 21 years, a series of Collective Bargaining Agreements (CBAs) have been reached between the MLBPA and owners that lay out the basic parameters of play, of contract negotiation, and of profit divvying that has kept seasons going sans interruption, but the most recently agreed-upon CBA is set to expire on December 1st, 2016.  That, of course, leaves three days for the two sides to come to conclusive decisions on numerous operating factors to avoid a lockout and set the stage for business and game operations for the next few years.

There are a number of pertinent decisions to be made, to be sure.  As Mike Axisa of CBSSports.com laid out, the primary among those are roster size (with a regular 26th spot a likely addition), establishing an international player draft, and removing the draft pick compensation system that has dented free agency for the past few seasons.  Each particular addendum will obviously impact all teams, but how they directly kick the Cincinnati Reds is what I'll try to focus on here for a little bit.

The most impacting change to the Reds among those three is one that seemingly hits more in theory at the moment than in practice, and that's the elimination of draft pick compensation for teams who see a player reject a Qualifying Offer in lieu of becoming a free agent. It's a system that was put in place in many ways to reward teams like the Reds, small market franchises on tight budgets that may have developed a player through his inexpensive years but weren't in position to throw the long-term dollars around to keep them once they were free agents.  Since that system has been in place, only Shin-Soo Choo played a direct part in it with the Reds, who extended him a Qualifying Offer after his stellar 2013 campaign only to see him decline it, since for 7 years with the Texas Rangers, and see the Reds get the 29th pick in the 2014 as compensation (which they used to select Alex Blandino).

There are several indirect ways in which that existing system impacted the Reds, however. Their aging core that had such solid success from 2010-2013 all neared free agency over the last two seasons, and the team faced the choice of trading them before they were out of contract, signing them to gigantic extensions, or holding them until they could be extended Qualifying Offers. Unlike the 'Type A, Type B' compensation that existed prior to the Qualifying Offer system, however, teams that signed those top tier free agents no longer had to give their 1st round draft pick to the team that lost the player, however; rather, the signing team forfeited their pick and a compensation pick after the 1st round was given to the team that lost out. That often meant the difference between getting, say, the 16th overall pick for losing a guy like Choo versus getting the 29th overall pick, meaning the team waving goodbye to their talented player didn't actually get as much in compensation as they once did.  That may well have played a part in the Reds' decisions to trade the likes of Johnny Cueto, Todd Frazier, and Aroldis Chapman when they did, since holding on to them until their contracts expired wouldn't net them as much as it would have two to three years earlier.

The Reds, who qualify as a small market team in pretty much every way you can define it, also missed out on the one part of the current Qualifying Offer system that was put in place to help teams with poor previous year results, something they're clearly dealing with at the moment.  Their three consecutive losing seasons have each netted them 1st round picks high enough in the order to be 'protected,' meaning if they chose to sign a big-ticket free agent who had rejected a Qualifying Offer from someone else, they wouldn't have to forfeit their 1st round pick in the process (instead only forfeiting their 2nd round pick). However, since the Reds have notoriously used their payroll to sign their own drafted and developed players to big deals while leaving free agency to the small additions like Ryan Ludwick and Skip Schumaker, among others, that benefit was never capitalized on - largely due to the massive overall rebuild.

It's that reluctance to participate in the free agent market that is the 'in theory' impact I mentioned above. However the upcoming compensation system shakes out, the premise will be clear:  remove the burden of draft pick forfeiture from the departing player, and allow them to sign wherever without their Qualifying Offer rejection directly impacting the signing team's future.  That puts the teams that actively sign top free agents in a much more advantageous situation than ever before, while seemingly leaving teams that don't normally use free agency to augment rosters with some serious FOMO.  The Reds, though, aren't really even in a position to see that impact in either direction at the moment, since they neither appear on the cusp of entering the deep end of the free agent market nor have any players left who are on the imminent cusp of being free agents (thanks to the numerous trades that sent them out in the last two years).

To recap, here's a snippet of a few major themes we'll likely see in the new CBA:

- an expanded active roster (which inherently means more players making big league money)

- a shift in the free agent compensation system that seemingly rewards the teams willing to spend money on free agents (which, as Jon Heyman mentioned in Axisa's post linked above, has kept an estimated billion dollars off team payrolls over previous years, which now would appear to be ready to be reinfused)

- an increase in the luxury tax threshold to nearly $200 million (meaning more wiggle room for high-payroll teams to operate without paying an overage tax)

For a small market team who typically operates on a smaller than average payroll and avoids the expensive free agent market altogether, it certainly looks like the best perks of the new CBA may not help the Reds at the moment, provided they continue to operate as they have in the past.  Free extra pepperoni on a pizza being ordered by a vegetarian, if you will.  And while a controlled-cost international draft would in theory be the counterweight in these negotiations that would help cost-conscious teams not get priced out of the likes of, say, the Yoenis Cespedeses and Jose Abreus of the world, that particular concept doesn't appear to have the support to get fully implemented at this time.

Major League Baseball is in the midst of exploding revenues, and Tony Clark and the MLBPA are rightfully doing their best to ensure the players continue to have access to those revenues in comparable ways to the owners of the 30 teams.  It's ripe for a scenario of great cash infusion into the game, on the Reds will either have to grow to participate in, or find a way to craftily defeat the system to keep their existing practices intact.  One thing is for certain, however:  if these new CBA concepts get approved, Joey Votto's contract is going to pale in comparison to those that get handed out in the coming years.