As our paperback is going to be released this spring, we are writing a new blog series to discuss 25 “Important Moments in Team Building.” This series will run chronologically and, if read in order, will provide a broad history of the changes to the game that have effected player movement and the general manager.
The series wills start on Monday, January 29, and (hopefully) will run for 25 consecutive week days. Thanks for reading!
Team building today has become depressingly homogenized. Front offices seem to share much the same philosophies of player valuation, and their approach to team building, coupled with the terms of the current CBA, agreed to in December 2016, continued the pattern from the previous one of closing off many of the avenues used by teams to differentiate themselves. Four CBA items in particular have led to this state of affairs.
Teams are now capped at what they can spend on international amateur players at a surprisingly low amount. Prior to this latest CBA a rebuilding club could emphasize international signings in a particular year, though they would then be limited in the next signing periods. In the 2016 signing period, for example, the Padres paid $35 million in bonuses to roughly 40 international amateur prospects. This ended up costing over $70 million because of the 100% tax for going so far over the spending guidelines and limited their bonuses during next two signing periods to just $300,000. Nevertheless, the Padres found a way concentrate all their resources into one year and land much more talent than they would have otherwise been able to secure. The current CBA closed this “loophole,” instituting a hard cap at $5.75 million (less for larger market teams).
The hard cap covering the amateur draft of American, Canadian, and Puerto Rican players remained in place in this CBA. Teams are allocated a pool of money based on where their picks fall in the draft, and they are prohibited from exceeding this amount. Teams can still creatively try to sign a high pick at below his “slot value” so as to spend more to try and sign a later pick, but this is generally at the margins. The days of teams aggressively going after higher-risk signings with larger bonuses are effectively over—such as the Pirates outspending everyone else from 2007 to 2011 as they tried to rebuild their talent level.
The luxury tax (technically termed the “competitive balance tax”) has also become more onerous. The penalties for exceeding the payroll threshold, particularly by large amounts over multiple consecutive years, are now more punitive, though the potential exposure has occasionally been overstressed this offseason. The luxury tax threshold for 2018 is $197 million. As the maximum exposure, if a team exceeds the threshold for three consecutive years and is at least $40 million over, their tax will be 95% on that portion above $40 million over (50% on the portion $0 – $20 million over and 62% for that portion $20 to $40 million over). A new penalty comes on line this year: any team that is $40 million over the threshold also sees its highest draft choice drop 10 positions (with the first six overall slots protected). Though these are not necessarily cost prohibitive amounts for the top revenue teams, much has been made of the Yankees and Dodgers, typically the two highest payroll teams, showing renewed concern this offseason about getting below the threshold so as to reset their consecutive year count. Neither team was as active in the free agency market as it often is.
Revenue sharing has apparently begun to reach a point where it affects teams’ internal calculus on how competitive they need to be. With essentially the same overall revenue sharing percentage from the previous CBA, plus increasing revenues from national sources such as MLBAM and merchandizing, smaller market teams are receiving significant additional revenues in addition to their local sources.
With the recent World Series championships of the Cubs and Astros, fans are also more tolerant of losing seasons if they believe in the front office. Both teams essentially tore themselves down to the studs and then rebuilt from scratch with young players acquired in trades or as high draft picks. That said, this is extremely difficult to execute on command. And it is even harder today as more teams are apparently trying to execute this strategy simultaneously and the prospects available in return for veterans may be diminishing. The higher revenue sharing simply reduces the penalty for failure.
One of the maxims commonly heard today is that teams do not want to be in the middle of the pack; they are either competing to win championships or they are willing to sacrifice the present while hoping to rebuild with high draft picks. This binary approach may not be particularly valid right now, especially with the hard caps on the draft and international signings. Obviously, it is nice to be really good, but the idea that rebuilding from scratch is better than from a middle position is not convincing. Baseball is not like the NBA where a high draft pick can make a material difference quickly, and there is much less certainty over the ultimate value of a pick as well. Moreover, the amount of talent a 65-win team needs to add is enormous and fraught with risk as counted on players never develop as anticipated.
Moreover, there is a huge range of possible outcomes for any team in any given year. A team that looks like an 83-win team at the beginning of the year could win anywhere between 75 and 90 games just by the vagaries of fate: injuries, slumps, unforeseen player development, etc. Every year it seems we are surprised by how different the final standings are from the preseason predictions. Giving up on a middle of the pack team and accepting a number of losing seasons in the hope that it can be rebuilt into a contender with some slightly higher draft picks seems both unlikely and unnecessary. Instead, there seems to be a real opportunity to move in the opposite direction—witness the Brewers for 2018–make a few positive moves and give the team a legitimate shot at the postseason.
Perhaps Theo Epstein saved Moneyball. Because the book claimed mainstream front offices and traditional scouts were either unaware of or ignoring important realities—and did so in a highly polemic manner–many within baseball were dismissive and hoped the surprisingly popular reception and ensuing public debate would just fade away. And in fact it could have. The A’s under GM Billy Beane, the central character of the book, won over 100 games in each of the two years before the book’s release in 2003. But in 2004 and 2005, though still moderately successful, Oakland failed to make the playoffs. The traditionalists could have pointed to this backsliding as evidence that Oakland’s success was simply an aberration due to a trio of top starting pitchers and had nothing to do with Beane’s innovative approach.
Another team, however, was about to become the new face of analytics. Boston Red Sox principal owner John Henry made a fortune as a commodities trader by taking the emotional element out of trading decisions, and he recognized a similar opportunity to bring a more data-driven approach to baseball. Henry and CEO Larry Lucchino initially tried to hire Beane, but the GM eventually decided to remain in Oakland. After this rebuff, the two promoted 28-year-old Theo Epstein, a young Yale graduate who had come with Lucchino from San Diego, to general manager. For good measure they engaged Bill James, the godfather of the sabermetrics movement, as a consultant.
Epstein’s hire was extremely risky. If the team backslid the owners would be ridiculed both for their new-fangled embrace of analytics and the hiring of a 28-year-old to run this storied franchise. Epstein and the Red Sox, however, were not only successful, but succeeded beyond what anyone could have expected. Not only did the team win the World Series in 2004 for the first time since 1918, they repeated three years later. The Red Sox victories validated to nearly all observers the value of incorporating analytics into baseball operations. The dichotomy was never as stark as Moneyball author Michael Lewis drew it, but clearly there were valuable insights into team building that could be learned by delving into over 100 years of baseball data.
But the Moneyball approach was not the only lesson teams seemed to have learned. Everyone now wanted their own Theo Epstein, and the leadership of major league front offices has changed dramatically over the 15 years since his hiring. Acknowledging that all front offices in 2003 were run by men, and nearly all white men at that, within that group there was a surprising diversity of experience and background. A number had played major league baseball, others peaked in the minors, some only played in college, and a couple not at all. Some broke in through scouting, others through coaching, a few though other departments, and some after starting out in other professions. As to schooling, the GMs of 2002 came from a widely diverse group of colleges, many of which would not have been categorized as exclusive. Beane was a thoughtful ex-player who had gone to UC – San Diego during his offseasons; Epstein was a talented, energetic young man from an Ivy League school. As it turned out, Epstein became the ideal for the future of front offices, not Beane.
In 2003 only two other teams were led by Ivy League graduates. The Cleveland Indians, perhaps the other most analytically inclined team at the time, and the Baltimore Orioles. Baltimore’s case is a little misleading, however, as they had a bizarre dual-headed structure of two ex-major league pitchers, Jim Beattie and Mike Flanagan, running the front office; Beattie had gone to Dartmouth. Regardless of background, men generally had an opportunity prove their worth and move up the ladder—often jumping back and forth between organizations. For example, Gerry Hunsicker, the Astros GM who won the division four times and finished second four times from 1996 to 2004, starred at St. Joseph’s University and then went to Florida International University for a master’s in education where he was an assistant coach for the baseball team. He didn’t get into professional baseball until 1978, six years after graduating from St. Joes, when he joined the Astros, before moving to the Mets. He was 46 when named Houston’s GM.
Today, of the 30 top baseball operations executives (identified somewhat subjectively), 13 now have degrees from Ivy League schools, while several others are from elite colleges like Amherst and Georgetown. Only two, Beane (a leftover from the pre-Epstein revolution) and Seattle’s Jerry Dipoto, played major league baseball. Plus, several of the GMs that serve in organizations where they are not the senior baseball executive are themselves Ivy League grads. In another mirroring of the Epstein hire, 17 of the 30 were named to their position at age 40 or under. The past two seasons have only reinforced this model, as teams run by Epstein and other youngish front office execs have captured the four pennants. Baseball organizations are currently mainly run by very smart young men from elite schools with little professional baseball playing experience. This trend will likely continue for many years—until someone tries a new route, is successful, and another model for leading front offices emerges.
In the spring of 2003 author Michael Lewis created a sensation in the baseball community with the release of Moneyball, a book that related the story of how Oakland A’s general manager Billy Beane kept his undercapitalized team competitive. A one-time financial trader turned writer who had unprecedented access to Beane’s activities, Lewis identified two related causes for the A’s success: Beane understood the concept of market inefficiencies and the analogous benefit of finding undervalued players; and Beane believed that these players could be better identified using statistical and analytical techniques than by traditional scouting methods.
The second issue caused a fair bit of controversy. Lewis is a terrific writer and much of the charm of his book came from the dichotomy he drew between the old-school scouts and the new-fangled statistical analysts. As Lewis put it, “Billy had his own idea about where to find future major league baseball players: inside [assistant general manager] Paul DePodesta’s computer. He flirted with the idea of firing all the scouts and just drafting kids straight from Paul’s laptop.” The two most prominent statistical insights of the A’s, as highlighted by Lewis, were that most organizations undervalued hitters with a high on-base-percentage who didn’t otherwise stand out, and that teams undervalued college players when compared to high school players in the amateur draft.
Baseball statistical analysis had been evolving and developing for roughly 50 years and had begun to find an audience with the writings of Bill James starting in the late 1970s, but this audience mainly consisted of independent researchers and a particular type of fan. Sabermetrics, a word coined by James, did not prescribe a set of formulas and answers as its critics might have thought. It is a process, a philosophy that teams should make decisions based on evidence and data. This was not a new idea – scouts had been using radar guns and stopwatches for decades rather than merely trusting their eyes – but sabermetrics suggested that baseball’s vast statistical record could tell a team which players were actually helping the team score or prevent runs, which strategies would increase the team’s chances of winning, which minor leaguers were likely to be good major leaguers, and more. Much more, in fact.
By the late 1990s sabermetrics had begun to creep into some of the more progressive baseball front offices. For example, Rockies general manager Dan O’Dowd and major league administrator (and current Twins GM) Thad Levine were making sophisticated mathematical evaluations of the effects of their high-altitude Coors Field in 1999. But most teams, before the publication of Moneyball, kept their analytical efforts out of the public eye. Not surprisingly, Lewis’s portrayal of a general manager who seemed to be rejecting 100 years of supposedly hide-bound traditionalist scouting in favor of novel statistical methods created a rift between the proponents of traditional scouting and statistical analysis.
Beyond player evaluation, statistical analysis was and is being used to evaluate in-game situations. The mountains of data that have recently become available allowed comprehensive analysis of on-field events like batter-pitcher matchups, strategic decisions such as bunting, and defensive positioning. As the front offices in some of the more statistically oriented organizations began to better understand these relationships, a natural tendency developed to impose some of this knowledge on the manager. Not surprisingly, this reset the line that had been observed between the front office and the field staff for nearly a century.
“You’re the manager and you’re going to get no interference or second-guessing from me,” Yankees general manager Ed Barrow told manager Miller Huggins in the 1920s. “Your job is to win, and my job is to see that you have the players to win with.”
Analytics has changed this relationship; the front office now had information that might contradict what a manager ordinarily would want to do. As one writer recently observed, overstating a little, “Teams don’t want a seasoned, master tactician anymore so much as they want a manager with a small ego and an open mind. At the root of this change is the proliferation of statistical analysis, which can make decisions for managers if they’re willing to embrace it.” Lewis described Beane’s preferred approach in Moneyball: “Beane ran the whole show. He wasn’t just making the trades and supervising scouts and getting his name in the papers and whatever else a GM did. He was deciding whether to bunt or steal; who played and who sat; who hit in which spot in the lineup; how the bullpen was used; even the manager’s subtle psychological tactics.”
The debate in the immediate aftermath of the book was between those who supported the traditional scouting model and those who thought, as Beane did in Lewis’s book, that sabermetrics could dramatically reduce the need for scouts. In fact, much of the acrimony was due to Lewis’s overstated caricaturization of scouts’ limitations. His unflattering portrayal of traditional scouts poisoned even his more compelling statistical arguments and encouraged an unnecessary choosing of sides. The smartest and most successful teams, as it turned out, grew their analytics staff to provide information that could enhance and augment what their scouts were telling them, and that, in the ideal environment, the scouts and analytics staffs could work together and learn from each other. On the field, even in the most analytically focused organizations, managers have remained critical to success given all the complexities in leading 25 men.
Back in 2003 Lewis thought that Beane’s advantage would eventually dissipate because other teams were going to start mimicking his strategies. “He [Beane] may feel pretty happy with himself now, because his team reflects inefficiencies exploited in the past, and looks pretty damned good. He might even get through this whole year without having to use the trade deadline, one of his favorite things. But two, three years down the road, he has problems.”
Beane thinks we have finally reached that point, though it took longer than two or three years. “Eventually, it was going to happen,” Beane recently acknowledged. “The big teams are run very wisely now. There are really smart guys who have capital. There’s no soft spots. They’re smart guys, and they’re surrounded by smart guys. It’s a very intelligent industry right now. In fact, one of the most intelligent [of any industry] … The big teams look like they’re going to be good for a long time.”
Since the Messersmith Decision in 1975, the negotiations for nearly every CBA have involved the owners trying to reverse the rights the players had gained. The most divisive negotiations, and all of the labor stoppages, have come when the owners are the most determined.
In 1976, the owners wanted to restrict free agency to players with nine years of service, before settling for six. In 1980-81 the owners demanded player compensation for any signed free agent, eventually settling for the ill-fated compensation draft. In 1985 owners initially demanded that teams above a certain payroll level be unable to sign free agents – effectively a salary cap. They did get a major concession from the players: an increase in the service time required for salary arbitration from two years to three years.
In 1990 the owners, already embroiled in legal difficulty because of their illegal collusion, nonetheless claimed massive industry losses and demanded a salary cap (plus a salary floor) for each team, the end to arbitration, and a pay-for-performance scheme for pre-free agency players. This went so poorly that Commissioner Fay Vincent basically took the players side. Despite a spring training lockout, the owners got none of what they wanted. Instead, they fired Vincent.
In 1994 the owners had no commissioner and the small market teams (led by “acting” commissioner Selig) had gained power and were ready to shut the game down to revamp their relationship with the players. The owners demanded a salary cap, revenue sharing, and an elimination of salary arbitration. They announced that they would impose this system after the 1994 season, which caused the players to strike on August 12. This ended the season.
The owners ultimately did impose their plan, and, with the union still on strike, opened spring training with replacement players. In March an NRLB decision enjoined the owners from implementing their plan, essentially restoring the old system. The players went back to work.
In what is now largely forgotten, even after the players returned to work the two sides butted heads for almost two more years before finally signing a new CBA. The owners and the players were so disgusted with each other that they all took several months off, not really bargaining again until after the 1995 season.
The union, led by their leader Don Fehr, and the owners’ chief negotiator, Randy Levine, finally reached an agreement in October 1996, essentially creating the model we have today, with a luxury tax and revenue sharing. The hardline owners still were unsatisfied without a true salary cap, and they had enough power to kill the agreement – needing 23 “yes” votes from the 30 owners, it could only garner 12. The players had no interest in renegotiating the pact, and talks again deadlocked.
At this point, November 1996, there was real risk that there could be another labor stoppage. What’s more, even with a signed agreement there was genuine doubt as to how “free” the free market might be. The owners were angry with the players union, and angry with each other. Salaries had been stagnant during the turmoil of the past few years. What was going to happen now – with frustration and anger at its height, and no CBA for two full years – was anyone’s guess.
What happened was a thunderbolt.
On November 19, the Chicago White Sox signed free agent (formerly Indians) outfielder Albert Belle to a record five-year, $52.5 million contract. Belle was an outstanding hitter (though a lesser player than Ken Griffey Jr., Barry Bonds and a few others) and a bit of a headache off the field.
The shock of the deal was not only the size of the contract – baseball had had many “record breaking” contracts over the past 20 years – but the team that signed him. White Sox owner Jerry Reinsdorf had been one of the hardline owners throughout the strike and against the recently negotiated deal, Selig’s chief ally, and the one of the most vocal of the diehards. If Jerry Reinsdorf was willing to give Albert Belle $52 million, taking him away from the small market Indians, their chief rival in the AL Central, what was the point of the labor impasse?
”We’re not being fiscally irresponsible because we can afford it,” said Reinsdorf, responding to criticism from the Indians. Reinsdorf was still not willing to give up his crusade to change the system, feebly adding: ”But it does bother me that there are only a few teams that can afford to do this. That means the game is not healthy. I want the people in Pittsburgh, Kansas City and Milwaukee and all the other small towns to have a chance to compete. I want competitive balance.”
Feeling their leader had moved on without them, the hardliners caved. A week or so later the owners ratified the Fehr-Levine pact by a vote of 26 to 4. The core of the old system — salary arbitration, free agency after six years – remained unchanged. The luxury tax and revenue sharing were new, but have stuck around, with occasional tweaks, through four subsequent CBAs.
With the new agreement finally in place, the owners were again willing to aggressively use free agency to reshape their teams. The Florida Marlins, led by their own hardline owner, Wayne Huizenga, gave out huge deals to Moises Alou, Bobby Bonilla, and Alex Fernandez, capping what turned into a huge off-season for players. The Blue Jays hoped to return to their pre-strike glory by signing Roger Clemens to a three-year $24.75 million contract, while the Yankees solidified their pitching staff by landing David Wells for a three-year $13.5 million contract. The salary malaise of the past few years had come to and end and salaries returned to their unrelenting upward trajectory. Free agency still offered the best opportunity to land mid-career stars, transforming or shoring up a team on the fly.
Tim Raines may not have been the best player in NL in 1986, but he was certainly among the top five. He led the NL in batting and OBP, stole 70 bases, and had his fourth consecutive top 12 finish in the MVP balloting. After the season he became a free agent, and at only 27 years old, he should have been near the top of every team’s list. Instead, he and agent Tom Reich heard practically nothing.
The previous offseason the free agent market had been suspiciously slow. After receiving no free agent offers, Kirk Gibson, Carlton Fisk, Donnie Moore and others had accepted much less money than they had hoped for and reluctantly returned to their old teams. There was some hope among the players and their agents that the slow offseason was simply an aberration and that the stronger 1986 class, including Raines, Jack Morris, Andre Dawson, Lance Parrish, and Bob Horner, would loosen the owners’ purse strings. It did not.
The Expos offered a three-year $4.8 million contract, a raise of about $100,000 per year. Reich initially pushed for a three-year contract at $2 million per year; once he realized the market was stagnant he lowered his asking price to $1.8 mil per year. And then he was forced to continue lowering it. Houston, Seattle, and Atlanta showed some nominal interest, but none made a meaningful offer. Only San Diego displayed any real interest, but at less than the Expos were offering.
On January 8, Raines had a big decision to make. If he didn’t re-sign with the Expos by this date, he couldn’t sign with them until May 1. He would have to trust that the system wasn’t completely rigged, and that he would be able to come to terms with another team. Raines and seven other free agents—Andre Dawson, Rich Gedman, Ron Guidry, Bob Horner, Lance Parrish, Doyle Alexander, and Bob Boone—elected not to take this chance, to take a chance with the other 25 clubs.
Once again only San Diego showed any real interest in Raines, but they would go no higher than a two-year contract at $1.1 million per year, well below the Expos. According to Raines, the Padres declined his desperation proposal of one year at $1.3 million plus incentives. On May 1, having lost his gamble, he went back to the Expos for roughly what they offered originally: $5 million total for three years.
In the end, of the eight free agents that went past the deadline, only two switched major league teams (Horner went to Japan); the others returned to their original teams at well below market prices. Dawson offered the Cubs a blank contract and told them to fill in whatever they wanted. They filled it in for $500,000 plus $200,000 in incentives, well below what a veteran of Dawson’s ability and stature would typically be paid. Parrish left the Tigers for the Phillies at roughly the same pay he had earned in 1986. Even with no raise, the Phillies were reportedly subjected to calls from Detroit’s GM Jim Campbell, AL President Bobby Brown and owners Bud Selig and Jerry Reinsdorf to consider what they were doing.
In fact, the owners were acting in violation of their collective bargaining agreement with the players, which stated: “Players shall not act in concert with other Players and Clubs shall not act in concert with other Clubs.” Baseball commissioner Peter Ueberroth, the mastermind behind this illegal conspiracy, had struck a chord with the owners in late 1985 when, as John Helyar wrote, he told them: “You, singular, are responsible for your own downfall, and you are so dumb that you are paying all kinds of money to players that aren’t playing so you’re losing money and don’t have money to play players that are playing, please don’t throw stones at anybody. It’s your fault, Mr. So and So, don’t rant and rave. Nobody is forcing you to do anything. It is your own stupidity.” He followed this up a week later at the general managers meeting, advising the attendees that if they want to sign a free agent, he wanted them to justify the deal economically.
Under this new banner of “fiscal responsibility”, the owners began working collectively to make sure salaries stayed in line. As Raines’s ordeal highlighted, in this they were successful. One study leaked to the Associated Press looked at players with six or more years of service who signed new contracts. Salaries increased 74% before the 1981 season, 50% for 1982, and 43% for 1983, 9% for 1984, and 7% for 1985. Once collusion kicked in, however, salaries for this subset began to plummet. In 1986 salaries dropped 18% and the next year 22%.
From a team building perspective, the biggest problem was strong deference given to a player’s current team. If a team made it known that they wanted to re-sign a player, this was code to the other teams to lay off. Even if the new salary was not a material increase from his previous salary—as in the cases of Parrish and Raines—teams generally shied away from free agents still wanted by their current club. If it had just been about the money, Cubs GM Dallas Green would not have been so defensive about signing Dawson in one of the greatest bargains in baseball history.
The players, their agents, and the union quickly recognized what the owners were secretly up to, and the union filed a grievance for the 1985 free agent class, later followed by grievances on behalf of the 1986, and 1987 classes. After hours of testimony, 31 interviews, and thousands of pages of transcripts, in September 1987 the arbitrator ruled in favor of the players in the 1985 free agent class. Roughly a year later, an arbitrator similarly decided in favor of the players for the 1986 class. Finally, in October 1990, while waiting for the verdict on the 1987 class the owners and players agreed to a $280 million damages settlement for all three cases. Additionally, several players who had gone through the process in these years were given a fresh opportunity at free agency.
With the advent of free agency to the game in 1976, the reserve clause no long applied to players with six years experience. But for these three years—1985 through 1987—the owners essentially acted to restore the reserve clause for these players. GMs were restrained from working to improve their clubs and, as a result, pennant races were artificially constrained and influenced. The lack of player movement during this three-year window underlined how much team building had changed with the coming of free agency.
After the signing of the 1976 CBA that formalized the rules for free agency, that fall saw the first free market for players in baseball history. The first class included Reggie Jackson, Bobby Grich, Don Gullett, Rollie Fingers, Sal Bando, and many more. All these players signed for massive raises over their previous salaries. Twins pitcher Bill Campbell was the first to sign, inking a four-year $1 million deal with the Red Sox, ten times his previous salary. Reggie Jackson got five years, $3 million from the Yankees, breaking the record Catfish Hunter had set two years earlier.
The next year was more of the same, with owners backing up the truck for Rich Gossage, Mike Torrez, Larry Hisle, Lyman Bostock, Richie Zisk, and dozens more. Teams also gave out huge contracts to players like Jim Rice and Mike Schmidt to keep them from testing free agency. Predictably, the owners immediately began claiming that they needed to change the rules to make it illegal to do what they were voluntarily doing.
In early 1979 Commissioner Bowie Kuhn first broached the idea that the owners would demand veteran free agent compensation as part of the next CBA, due to expire at the end of that year. Such a scheme had been in place in the NBA and NFL for several years effectively stifling meaningful free agency. NFL commissioner Pete Rozelle awarded the San Francisco 49ers two first round draft picks from the New Orleans Saints after they signed receiver Dave Parks for 1968. When the New York Knicks signed free agent forward Marvin Webster from Seattle in 1978, the NBA commissioner awarded Seattle Lonnie Shelton as compensation – Shelton was likely a better player, and the Supersonics went on to win the NBA title the next spring. The Knicks and their fans were livid, but that was the system. No team wanted the risk a big signing only to lose one or more of their best players
Marvin Miller and the players would have none of it. The CBA expired in December 1979, but it took the two sides until August 1981 to finally hammer out a deal. The players nearly went out on strike in May 1980 before agreeing to set aside the free agent compensation issue (the only sticking point) for one year. They struck in June 1981 and were out for seven weeks, gutting the middle third of the 1981 season.
When the two sides finally agreed, they settled on a bizarre compensation system whereby teams who lose a Type A free agent (defined using a complex statistical formula) would draft a player from a pool made available by all teams, not necessarily the team that signed the player—similar to an expansion draft. A limited number of teams could opt out – they were prohibited from signing Type A free agents but were not required to make players available to the compensation draft pool. This proposal was offered by the players before the strike but rejected. After weeks of impasse, the owners eventually gave in to a plan whose main idea was to compensate the former team without penalizing the new team.
On February 2, 1982, the first ever Free Agent Compensation Draft was held. The only Type A free agent to change teams that off-season was White Sox pitcher Ed Farmer, who signed with the Phillies. In compensation, the White Sox drafted catcher Joel Skinner from the Pirates. For this, the game had been shut down for 50 days.
The next year there were two picks in the draft. The White Sox (who had lost Steve Kemp to the Yankees) drafted Steve Mura from the Cardinals. And the Mariners (who lost pitcher Floyd Bannister to the White Sox) drafted infielder Danny Tartabull from the Reds. None of this was earth-shattering news.
The 1984 draft proved more memorable. After the White Sox lost pitcher Dennis Lamp to the Reds, they selected pitcher Tom Seaver from the Mets. Seaver was not the star he had once been, but he was still a big hero in New York and his unceremonious loss – in a newfangled draft no one wanted or needed – shocked New Yorkers. The Mets protested that they left Seaver exposed because they figured no one would want his contract, a gamble they lost. Seaver put up two excellent seasons with the White Sox, and might have missed another chance at the post-season with the strong Mets clubs of the mid-1980s.
That same year the Athletics pulled off a coup by selecting pitcher Tim Belcher from the Yankees. New York had just signed Belcher a few days earlier after taking him first overall in the January amateur draft. He was considered one of the best prospects in the country, but the Yankees had mistakenly exposed him in their confusion over the rules. Again, local fans were livid that this bizarre compensation system had cost them a well-regarded player.
After one more go around in 1985, with Donnie Moore (by the Angels) and Tom Henke (by the Blue Jays) the key draftees, the owners lost interest in the pool concept. In the 1985 CBA negotiations, both sides agreed to return to draft pick compensation. The details of the draft picks has changed with each CBA, but veteran compensation, which cost baseball the middle of the 1981 season, has not made a return.
Building an expansion team is difficult. The talent available from other teams in the expansion draft rarely consists of players one can build around or will still be valuable once the team eventually contends for the playoffs. When Pat Gillick took over as GM of the Blue Jays after their inaugural season in the fall of 1977 he began to implement his “many rivers” approach to finding ballplayers: Look everywhere.
Most famously he teamed up with his old friend, scout Epy Guerrero, and began building a presence in the Dominican Republic, well ahead of other organizations, excepting perhaps the Dodgers.
Gillick also began to exploit another little-used “river” in December 1977 when he selected first baseman Willie Upshaw, whom he and Guerrero knew from the Yankees organization, in the Rule 5 draft. A holdover from the early days of organized baseball (under slightly changing guidelines and sections in the rulebook), the Rule 5 draft was designed to prevent players from being buried in the minors. Teams could control any player in their organization who was younger than 19 on June 4 of their signing year for four years and those who were 19 or older for three years. Practically, this translated to high school and college signees respectively. After this control period, players had to be placed onto the team’s 40-man roster or be exposed to the Rule 5 draft. Held in December, this draft allows teams to claim veteran minor leaguers unprotected on their club’s 40-man roster. (As of the 2007 the control period was increased by one year to five years for prep players and four years for the college players.) The cost of each draftee was $25,000 (the price jumped to $50,000 in 1985 and is $100,000 today).
The catch is that the selecting team has to keep the player on its major league 25-man roster for the entire upcoming season or return the player to his previous club for half the original drafting price. As most of the available players were not ready to jump to the major leagues, a club would often have to waste a roster spot for a full season if it wished to keep the player. Accordingly, only about ten to fifteen players a year were usually selected in the Rule 5 draft. But if a team could find a player of value, the price was cheap compared with trying to develop a major league ballplayer.
Gillick recognized that the young Blue Jays were still in the talent accumulation stage and while an unprotected player may not fit into their team’s plans, they might still be good enough to play for the Blue Jays. He and his scouts focused their energies on this draft much more than the other clubs. Over the next several years Gillick mastered the Rule 5 draft to an uncanny degree. In addition to Upshaw he uncovered a number of additional valuable contributors, including OF George Bell (1987 MVP), SS/2B Manny Lee, P Jim Gott, and 3B Kelly Gruber.
Bobby Cox, who managed the 1985 team to its first division title, deserves special credit for this championship because he was effectively limited to just 23 roster spots. Gillick saddled Cox with two Rule 5 players, Manny Lee and Lou Thornton, and neither were yet ready for the majors. During the years that Toronto was still uncompetitive the burden of carrying these players seemed a fair tradeoff. One of the many things Gillick appreciated about Cox was that his manager bought into the overall program, even when it made his job a little harder.
Gillick’s success in the mostly overlooked Rule 5 draft of veteran minor leaguers was legendary; no one else came close to his success, and he forced teams to be much smarter about protecting their assets from this draft. Moreover, in no small part due to the success of Gillick in using this approach to uncover talent, baseball changed its rules. In 1985 the cost of a drafted player was increased, as noted above, to $50,000. Moreover, the majors and minors agreed to increase the control period from three to four years. Gillick understood better than just about anyone the need to look for talent anywhere and everywhere.