Owners are worried about tanking. Which is something they themselves created.


Buster Olney of ESPN reports that, at the most recent owners meeting, the topic of tanking came up. Tanking, as in “teams deliberately fielding losing teams in order to improve their draft position.” Some are worried about it and the topic may come up in the next Collective Bargaining Agreement negotiations, Olney says.

I’ll be curious to see how, exactly, the owners plan to address this given that their very own proposals have done more to incentivize tanking than anything else. Specifically, the imposition of draft slotting and draft bonus pools.

Prior to the most recent CBA, which went into effect for the 2012 season, teams could theoretically pay bonuses to drafted players in any amount they liked. There were soft “slot recommendations” suggested by MLB to clubs, and there was talk of teams making the league angry if they paid too much for draft picks, but it was an informal system which clubs would often buck to get the player they wanted wherever they happened to be drafting. A team who had won a lot of games and wasn’t drafting early could still get a really nice pick if they made it clear that they were going to pay big for the guy and the player would signal to worse, earlier-drafting clubs that he may be difficult to sign if they weren’t willing to pay the large bonus themselves.

The owners didn’t like this because owners never like anything that may lead to players being able to sell themselves to the highest bidder. The union, after initially talking tough about opposing any limits on signing bonuses, eventually caved in. Why? Likely because membership consists of guys already in the bigs and big leaguers have never had much compunction about bargaining away the rights of amateurs and minor leaguers. So, in 2012 a slotting system with severe penalties for exceeding slotted bonuses was implemented. Under the current system, each draft slot is assigned a certain value and teams have adhered to that regime.

In conjunction with the slots is a “bonus pool.” It works like this: each club totals up the values of all the slots where they pick and, bam, that’s how much they get to spend in the entire draft. As such, the more picks (you can get more with supplemental and compensation picks) and the higher picks a club has, the larger their “bonus pool” will be.

The stated purpose for the slots and bonuses: parity and less money wasted on putatively unproven players. The unspoken but more compelling purpose of the slots and bonuses: clubs spending less money on players overall. The unintended result of the system: tanking is incentivized.

This should not be a surprise, really. When I spoke to Michael Weiner about slots when he took office in 2009, he corrected me when I asked him a question about “slotting,” saying it was more properly called “a salary cap.” Which it is, even if it only effects amateurs and even if it works on a sliding scale. If the lessons of the NBA and the NFL tell us anything, of course, is that once you have a salary cap in place, clubs are going to do everything they can to exploit it and maximize their ability to spend without being penalized. In the NBA, at least for a time, there was an incentive to get the BEST possible player, whom you and you alone could pay a ton pursuant to the “Larry Bird Rule.” In the NFL there have always been incentives to structure contracts in weird ways and to designate certain players as key players so as to maximize your cap numbers.

In baseball, before 2012 and the imposition of slots and pools, the easiest way to accumulate good amateur was to make it clear you were going to pay good money for it. Indeed, you could even get that talent if you were drafting, say, 15th instead of 2nd. The easiest way to do so after 2012 — indeed the only real way — is to lose a lot of game and maximize your draft pool. That’s it. That’s the way to “beat” or at least maximize the cap on the draft. And it became even more important to beat the cap on the draft once MLB imposed rules which made signing free agents less desirable in the form of the qualifying offers and compensation picks. The draft has never been more important and it has never been more important to pick high, thereby incentivizing teams to lose a lot of games.

The draft itself, of course, as has always “rewarded” teams for losing by giving them higher picks. But it was never the case that being the absolute worst would guarantee you the best talent or the most talent in the aggregate across a given set of picks. Teams could make the judgment that, say, losing 95 games was superior to losing 105 games. Maybe they’d pick fourth instead of first, but they’d get a bit more revenue at the gate and they’d be able to make up for it a bit by paying out more in bonuses. A nice little side-effect of that: some fans could be marginally happier at the quality of their club and a contender playing a losing team in September may actually face slightly better competition.

Now, however, there is a lockstep relationship between losing and the draft. If you’re not going to make the playoffs, it’s clearly better to lose 105 games than 95. at a certain point it’s in a club’s best interest to simply wave the white flag and position itself for three years from now. Unless and until that relationship is reduced in strength, that incentive will persist.

If, as Olney says, owners are angry about taking, which one of them is going to propose that they chuck draft slotting and bonus pools first? And if mid-range veteran free agents are going to be miffed that they’re still unsigned in February — or if they’re going to be upset with how an allegedly tanking team goes about its business — which union representatives are going to go back to what Michael Weiner thought about the topic back in 2009 and go back to the business of opposing salary caps in all forms?

Gentlemen: start your negotiating.