Friday, May 29, 2009

The problem of being Super

[A brief introduction. I am an attorney and a scientist. I attended Rutgers Law School in Newark where I was taught Criminal Procedure by fellow Dorf on Law blogger and good friend Sherry Colb. I worked as a patent and anti-trust attorney for Sidley and Austin in Manhattan until 2003. At that point I left the practice of law and became a Director at the World Anti-Doping Agency laboratory at UCLA. After a few years there, I left to form my own company - The Agency for Cycling Ethics and now Scott Analytics - where I develop and administer anti-doping programs for both professional and Olympic sport. I also serve regularly as a consulting expert for anti-doping cases and have been involved in almost every high profile doping case over the last five years.

I will generally be writing here about legal issues involved in sports, with a likely heavy slant towards anti-doping in professional and Olympic sport. Today, however, I am going to focus on a bit of esoterica of Major Leage Baseball compensation. It is my hope that it will not be overly dull.]

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Matt Wieters makes his Major League debut tonight for the Baltimore Orioles. If you are not a baseball fan this probably means nothing to you, but I'd encourage you to stick with this a bit. I might be wrong, but I think even those uninterested in baseball will find this curious.

Wieters debuts tonight as one of the most highly touted prospects in the history of the modern game. Many respectable analysts would even question calling him a prospect, so certain they are of his ultimate stardom. Which brings the question, why now? If he is that great, why wasn't he playing on opening day? I am going to explain that below, but what makes it interesting to me is that: 1. the answer has nothing to do with lack of talent or readiness (nothing has happened in the last 2 months that made Wieters more ready for his cup of coffee); and 2. no one - not Wieters, not his team, and most oddly, not reporters - talks about it. He is also not alone or even rare.

I need to start by explaining the environment for this discussion. The terms of employment for a MLB player are defined by a collective bargaining agreement between MLB and the MLB Players Assocciation. By the terms of that CBA, a team that drafts a player will control that player for six years starting from the year that player is placed on the 25-man roster (the team you see playing on T.V.).

During the first three of those six years, the team is required to do nothing other than pay the MLB minimum salary (currently $400,000). The next three years are known as "arbitration years." During this period, within certain limitations, the teams and players can bargain for salary. If they do not reach an agreement, they go to binding arbitration and a salary is set. Without getting into too much detail, suffice it to say that arbitration years result in salaries that are approximately 50% of what a similar player could get in free agency. After the sixth year, the player may file for free agency and the team no longer controls that player's employment destiny.

There is, however, an exception to this rule and it is called the "Super Twos." Super Twos come from the group of players who have between two and three years of service time and at least 86 days of service time the previous year. The 17% of those players with the most service time become Super Twos. These "Super Twos" enter the arbitration process a year earlier than everyone else (and therefore make a lot more money than those following the normal 3+3 route).

The key to all this is that 17%. To make it as a Super Two, you generally need around 130 days of service. In fact, no Super Two has ever made it with less.

The last game in MLB this year is Sept 30. Today is May 29. That is 125 days of service time.

Thus, by bringing up Wieters today, rather than at the start of the season, the Orioles will pretty much guarantee that Wieters will not be a Super Two. This in turn will save them (and cost Wieters) millions of dollars. As I said above, he is not alone. The same thing happened to obvious star Evan Longoria. And the same thing happens pretty much every time a clear superstar is in an organization.

The interesting thing about this, obviously, is not some human interest story. There is no reason to feel badly for Wieters. He will be a millionaire many times over (ultimately, probably close to 400 times over) in spite of the operation of this rule. To me the most interesting thing about this is that no one talks about it.

If you were to do a search for Wieters, you would find plenty of quotes from people in the Orioles organization talking about getting him ready to the big leagues, or looking forward to when he is ready for the big leagues, etc. You will not find anyone telling you "we can't start him before the end of May, because if we do that it is going to cost us millions." All the other rules, though, MLB front office personnel will discuss.

Take the draft system that ensures complete control of all players for at least six years. Imagine exiting law school and being told "you have to work for Duey, Cheetum and Howe in their Alaska office for the next six years because, well, we say so." If there is a real injustice in MLB, surely it must be the draft. The entire draft system, however, is actively put forth to the fans as a way to ensure competitiveness to smaller markets. That is, the rules are not there to protect the profits of rich owners, but are there to ensure that the game is as good as it can be - and this point is made loudly and often by MLB.

So why is the truth of the Super Twos kept under wraps? Surely the "injustice" of telling a handful of players each year "we can't pay you what you are worth now, because if we did we'd have to pay you even more later" cannot compare to the "injustice" of telling hundreds of players each year exactly where they will go and what they will do for the next six to nine years. But in the mind of MLB it must, because not only is it not discussed but a great deal of intentionally misleading discussion does go on surrounding those to whom MLB is making sure this rule does not apply.

-posted by Paul Scott

9 comments:

Michael C. Dorf said...

Wait a minute. Are you saying that I WASN'T obligated to work in the basement of that Fairbanks law firm for six years after graduation? But they told me EVERYBODY was subject to the lawyer draft. Damn!

Citizen Yin said...

I enjoy this blog, but this is the first time I'm commenting. I think the reason no one talks about it is because, frankly, the average fan is not particularly astute, and no one wants to spend 10 minutes explaining the intricacies of arbitration rules and end up with a dead audience. I happen to participate in fantasy baseball leagues however, and there are plenty of fantasy players and commentators who knew exactly why Wieters was not brought up, and exactly when he was being brought up (late-May to early-June was the guess, precisely because of Super 2). I'm sure plenty of Orioles fans knew, and I'm also sure Wieters was told by his agent. I don't think this is necessarily something that's kept under wraps; the information is out there, it just takes a bit of time to explain to casual fans.

Soren said...

With all due respect, it isn't true that "nobody" talks about this. It may not get much play in local newspapers. But the Super-Two phenomenon is discussed at length at places like Baseball Prospectus or ESPN.com. Baseball Prospectus can, in truth, be seen as a venue for fanatic fans; but one need be only a moderately interested sports fan to read ESPN.com regularly and know all about the Super Twos.

For instance, a number of commentators at ESPN.com predicted back in Feburary that Wieters would start the year in the minors for financial reasons. This was true of writers whose work is available only to premium subscribers, as well as those who are available to the general public.

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