MLB.com Columnist

Jonathan Mayo

How CBA affects Draft, free agency, international market

How CBA affects Draft, free agency, international market

As Major League Baseball and the Major League Baseball Players Association negotiated a new Collective Bargaining Agreement, it appeared that there could be some bones of contention regarding how teams acquire amateur talent, both through the Draft and internationally.

The agreement was announced Wednesday night, just over an hour before the previous CBA was set to expire. With it came some changes to the rules governing amateur acquisition, but given what was potentially on the table, they seem more like tweaks to the existing system rather than a complete overhaul.

The idea of an international draft, something that reportedly held up negotiations up for a while, was dropped as the deadline approached, leaving out what would have been a seismic shift in the CBA. But there were some smaller adjustments made domestically and internationally.

International cap and Competitive Balance picks

While owners wanted to institute an international draft to help control spending in those markets, it proved to be too large and complicated a step to take at this time. But there will be a hard cap that cannot be surpassed, ranging from $4.75 million up to $5.75 million, set for teams that want to acquire international amateur talent.

Here's how it will work, starting with the 2017 signing period: Every team gets at least $4.75 million. Any team receiving a Competitive Balance Round A pick in the Draft will get $5.25 million in international bonus pool money. Teams receiving a Competitive Balance Round B pick will have $5.75 million to spend.

With that comes changes to what was known as the Competitive Balance Lottery. In effect, it is no longer a lottery as all teams eligible for those picks will be assigned one, either in Round A or Round B. The same teams are deemed eligible -- ones that are in the bottom 10 in revenue or market size. Six will be awarded picks in Round A based on a formula that considers winning percentage and revenue. Those six teams will pick in Round A in 2017, 2019 and 2021. The remaining teams -- estimated to be between six and eight -- will pick in Round B in those years. The groups of teams, which will not change for the duration of the new CBA, will switch picking in Round A and B in alternating years based on their initial assignment of round in 2017.

Under the old CBA, teams were awarded international bonus slots based on reverse order of standings, meaning teams with the worst records got the highest international bonus pools to draw from. For example, last year the Phillies had the largest pool of just over $5.6 million by virtue of having the worst record in baseball in 2015. (In addition, Philadelphia had an assigned value of just more than $9 million for the Draft's first pick. The Twins have an assigned value of $7.4 million for the first pick in the 2017 Draft.)

Under the last agreement, teams that went over their allotted pools were taxed a percentage of the overage and, if they went too far over the pool, would lose the ability to sign players for more than $300,000 over the following two signing periods. These penalties -- which do carry over for the next two signing periods -- did not prove to be deterrents on spending, as teams routinely went past their pools to get the talent they desired. Now teams are not allowed to go over their caps.

Trading international pool money

Teams are allowed to trade as much of their international pool money as they would like, but there is a limit to how much one team can acquire. That limit is set at 75 percent of a team's initial pool, so a team that has a $5.75 million pool could extend its international money up to just over $10 million.

Without trading for more money, the cap will keep teams from signing international players to some of the deals seen in the past couple of years, like Yoan Moncada ($31.5 million, Red Sox), Yadier Alvarez ($16 million, Dodgers), Yusniel Diaz ($15.5 million, Dodgers), Adrian Morejon ($11 million, Padres), Alfredo Rodriguez ($7 million, Reds) and Lucius Fox ($6 million, Giants).

Lourdes Gurriel recently signed a $22 million deal that did not count against the Blue Jays' pool because he waited until his 23rd birthday to sign. Under the new agreement, the bonus limitations apply to players up to 25 years old.

The international bonus cap could impact baseball's biggest international star, Shohei Ohtani of Japan. Under the new agreement, the 22-year-old two-way player would have to wait until 2019 to sign with a big league team without being subject to the cap. However, Yahoo! Sports reports that the rules could be changed to allow Ohtani to sign with a team without the financial restrictions before 2019.

The Draft and free-agent compensation

Tweaks to the domestic amateur acquisition -- the Draft -- come in the form of free-agent acquisition. Qualifying offers -- which will still be calculated based on the average of the top 125 salaries -- can still be extended to free agents, but no more than once per player in his career. A player must still be on his club for the entire season to receive a qualifying offer.

Beginning in the 2017-18 offseason, teams signing a free agent who received a qualifying offer will no longer give up a first-round pick. Under the old system, any team not picking in the top 10 forfeited its first pick for signing one of those free agents, and the team losing that free agent would get a compensation pick at the end of the first round.

In the new agreement, teams will still get a pick for losing a free agent who rejected a qualifying offer, but not necessarily at the end of the first round, and teams will still lose picks for signing qualifying-offer free agents, but not necessarily their first pick. Here's a complete breakdown:

If a team loses qualifying-offer free agent who signs with another team for $50 million or more:

Team over luxury-tax threshold: Receives Draft pick at end of fourth round.
Team from 15 smallest markets that receives revenue sharing money: Receives Draft pick at end of first round.
Team that is neither of the above: Receives Draft pick at end of second round.

If a team loses qualifying-offer free agent who signs with another team for less than $50 million:

Team over luxury-tax threshold: Receives Draft pick at end of fourth round.
Team under luxury-tax threshold: Receives Draft pick at end of second round.

If a team signs a qualifying-offer free agent:

Team over luxury-tax threshold: Loses second- and fifth-highest Draft picks and $1 million in international pool money.
Team from 15 smallest markets that receives revenue sharing money: Loses third-highest Draft pick.
Team that is neither of the above: Loses second-highest pick and $500,000 in international pool money.

If a team signs multiple qualifying-offer free agents:

Team over luxury-tax threshold: Loses second- and fifth-highest Draft picks and $1 million in international pool money for first signing; loses third- and sixth-highest Draft picks and $1 million in international pool money for second signing.
Team from 15 smallest markets? that receives revenue sharing money: Loses third-highest Draft pick for first signing; loses fourth-highest Draft pick for second signing.
Team that is neither of the above: Loses second-highest pick and $500,000 in international pool money for first signing; loses third-highest Draft pick and $500,000 in international pool money for second signing.

One important note regarding teams losing picks: Competitive Balance Round picks are exempt from forfeiture.

How much that alters the landscape remains to be seen. It appears to incentivize -- or at least lessen the penalties for -- smaller-market/revenue clubs to be more active on the free-agent market. They might be more willing to try and sign qualifying-offer free agents now that first-round picks will not be forfeited. And larger clubs might be dissuaded from activity given the multiple picks and pool money now at stake.

Will teams be more or less likely to make qualifying offers in the first place? Compensation isn't guaranteed to be as high as it was under the previous agreement, but it's also not so diminished as to completely dissuade teams from making the offers as a result. Initial impression is that status quo will reign in this case.

Jonathan Mayo is a reporter for MLBPipeline.com. Follow him on Twitter @JonathanMayo and Facebook, and listen to him on the weekly Pipeline Podcast. This story was not subject to the approval of Major League Baseball or its clubs.