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New compensation rules affect trade market

New compensation rules affect trade market

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New compensation rules affect trade market
The Phillies never had to find out exactly what ace left-hander Cole Hamels would have brought them in a trade. General manager Ruben Amaro Jr. avoided what would have been a wrenching decision when Hamels agreed this week to a six-year, $144 million contract extension.

If Hamels had decided to test the market and the Phillies had then concluded that trading him now was better than having him walk away at the end of the season, it would have been disappointing on several levels. It would have made it more difficult for them to compete this year and beyond. There would have been a fan backlash. And they almost certainly wouldn't have been able to get the same value in return than they would have just a year ago.

"Obviously we didn't get to the finish line on any kind of a trade because that wasn't our goal," Amaro said. "We would have gotten a pretty good package, I think, because there's not a team out there that Cole would not have sat atop their rotation. And when you're talking about elite players, I would have to assume that they would be willing to part with some pretty strong talent.

"I don't know that we would have gotten what we could have gotten before [this year], though."

That's because the rules were changed in the new Collective Bargaining Agreement. Teams that trade for players in the final year of their contracts no longer receive Draft-pick compensation if they don't re-sign the so-called "rental player." And that, naturally, makes them more reluctant to part with the top prospects that clubs dealing a veteran star usually demanded.

There have been some trades this month and there will undoubtedly be more before Tuesday's non-waiver Deadline. Still, there's been a noticeable impact.

"It's certainly a factor," said Wayne Krivsky, a former Reds general manager, now a special assistant to Twins GM Terry Ryan. "Everybody's talking about it. It's a big change, so it does factor in. I think maybe that's what's causing teams not to get [top prospects in return]."

"It's definitely a difference. People might be asking for what they got last year. But as time goes on they realize it isn't going to happen, so now they've got to make the best deal that they can."

Braves senior advisor for player personnel Jim Fregosi agrees. "It lessens the value of the player you're trading for. Because if you keep a player all year long, you get compensation. If you trade him, you don't get compensation. It actually lessens the value of the trade, so people are more likely to keep the player for the full year unless they can get what they think is an almost Major League-ready player. It stops some of the trade value," he said.

There's more to it than that, too. Using Hamels as an example again, any team that traded for him would not have received any compensation if they were unable to sign him. Previously, they would have gotten two Draft choices.

On the other hand, if the Phillies didn't sign or trade Hamels and he became a free agent, they would have had to make a qualifying offer to him in order to be eligible for compensation if he signed with another team. A qualifying offer is a one-year deal for the average of the top 125 salaries the previous season; this year it's expected to be about $12.5 million. If he turned that down and signed elsewhere, the Phillies would have gotten a compensatory sandwich pick at the end of the first round, not two picks as they would have before.

Further, the team that signed Hamels would forfeit its first-round choice. That doesn't change. The difference is that the pick would not go to the Phillies as it did in the past.

That may be why many of the trades that have been made so far involved players like Hanely Ramirez and Wandy Rodriguez, who are under control beyond this season.

That doesn't mean teams won't make win-now moves, of course. The Braves were reportedly willing to send 22-year-old Randall Delgado, considered one of their best pitching prospects as recently as last year, to the Cubs for Ryan Dempster. Dempster quashed the move by not agreeing to waive his no-trade rights.

There were several reasons for changing the system. Both the teams and Players Association had become convinced that the Type A-Type B system used to determine compensation was flawed, especially when it came reflecting the value of relief pitchers. There was also a concern that too many compensation picks were diluting the Draft; this year's number of supplemental picks almost equaled that of a complete round.

And it was further designed to try to improve competitive balance. The worry was that some high-revenue teams were able to improve their Draft position when they both signed and lost a ranked free agent. There was also a growing concern over the apparent trend for teams to acquire players late in the season for no reason other than to obtain Draft-pick compensation.

It's still early. So far, though, the changes seem to be working.

Paul Hagen is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.

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{"content":["trading_deadline" ] }
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