PAYING FOR FREE AGENTS WITH REVENUE SHARING

By Murray Chass

June 19, 2011

This is the sixth season Prince Fielder has been a regular sight in the Milwaukee Brewers’ lineup, and the Brewers and their fans would like to see him remain there. “There’s no question the fans would like to see us keep a player we drafted and has been with us for his entire career,” Doug Melvin, the Brewers’ general manager, said.

The problem is the Brewers have to figure out how to make that happen. Fielder can be a free agent after the season, and it will take a ton of money to keep him in the Milwaukee lineup as its first baseman.Prince Fielder 225

Help may be on the way, but it will arrive too late for the Brewers. An executive with another club said a proposal that has been circulating among owners, though it has not reached the bargaining table, would change the revenue-sharing part of the basic agreement, which expires Dec. 11.

The proposal would have the payments to low-revenue, or small-market, clubs, be allocated and mandated for signing a team’s own free agents and draft choices.

Under the plan, a team could bank all of the money it receives during the term of the labor agreement, or as much of the money as it wants, as long as the money goes for signing its own free agents and draft choices.

The money could not be used for other purposes, such as paying down debt.

The Brewers, as an example, receive $25 million to $30 million a year in revenue sharing. Over the life of a five-year agreement, they would receive $125 million to $150 million.

Although this proposal would not reduce the amount of money the wealthier clubs would have to pay, it would make them feel better about paying it. Those clubs have come to accept the need to pay the money to help poorer teams improve on the field; they just don’t want to be giving the poor teams money to pay their debts or their bills.

I learned about this proposal from the last person I called last Friday about the column I had set out to write, one in which I was going to propose my own idea for free agency and revenue sharing.

Fielder and the Brewers gave me the idea because I figured Fielder would be like the rest of Scott Boras’s fortune seekers and leave the Brewers, who would like to retain him but haven’t begun their attempt.

There have been no contract negotiations with his agent, Boras.

“We want to wait until the end of the year,” Melvin said. “We decided it’s not in the best interest of either of us to do anything right now.”

What would the Brewers do if they wanted to? What will they do at the end of the season?

Melvin is intimately familiar with Boras and the negotiating challenges he poses. Melvin was the Texas Rangers’ general manager when they signed another Boras free agent, Alex Rodriguez, to a 10-year, $252 million contract in December 2000, the richest in major league history at the time.

Rodriguez was a typical Boras client, changing teams for a lusty contract. Boras clients, however, are not the only free agents who abandon their teams for greener, as in money, fields. Free agents do it every winter.

If Fielder opts for free agency in November, he could have company in Albert Pujols (Cardinals), Jose Reyes (Mets) and Robinson Cano (Yankees). But will they go elsewhere or re-sign with their teams?

Jose Reyes5 225No trouble would be anticipated with Cano and the Yankees reaching agreement on a new contract, but the other three players and their teams could encounter difficulties in agreeing on the economics of a deal.

The Reyes case is different from the other two. Fred Wilpon, the Madoff-menaced Mets’ owner, foolishly said earlier this season that Reyes, who is having a fantastic season, would not get the kind of contract that Boston gave Carl Crawford ($142 million).

By unnecessarily belittling Reyes, a huge fan favorite, Wilpon might have undermined the Mets’ chances of keeping the flashy shortstop even if he wants to stay. Wilpon, with his comment, has at the least encouraged other interested teams to pursue Reyes.

What about Fielder and Pujols? They are perfect examples of an idea I have been thinking about. Is there a way that Major League Baseball and the Players Association can create a system that would make it economically possible for teams at the low or mid-revenue levels to retain their superstar free agents?

The Brewers began this season with an $85.5 million payroll, 17th among the 30 teams. The Brewers have perennially been among the bottom half of major league teams with their payrolls.

Bud Selig’s team before he became commissioner, the Brewers have already made an uncharacteristic move, signing Ryan Braun, Fielder’s partner in offensive damage, to a 5-year, $105 million extension last April, three weeks into the fourth year of an 8-year, $45 million contract.

“We had Braun signed for five years and he wanted additional years,” Melvin said. “A lot of the contract is deferred money.”

The Brewers can’t expect to get away with a lot deferred money in a new Fielder contract so how could they make an offer that would keep him in town? How about help from a variation on the theme of revenue sharing?

The issue of revenue sharing will very likely be the most critical of the current negotiations for a new collective bargaining agreement between owners and players.

The revenue sharing differences will most likely come between low-revenue and high-revenue clubs. There will almost certainly be changes in the system that last year transferred slightly more than $400 million from wealthier clubs to poorer ones.

But as long as changes are anticipated, why not create a system under which poorer clubs could get money that would enable them to retain their best players who are free agents?

The system would not be easy to create. Many and difficult details would have to be worked out.

Basically, however, a pool of free-agent funds would be created and maintained for the purpose of keeping a Fielder with the Brewers and a Pujols with the Cardinals.

The Brewers or the Cardinals or any other team could apply for funds, saying it needed the sum to cover the gap in the contract negotiations with its free agent. The fund would be administered by representatives of both sides.

With most of the best and most expensive free agents leaving their teams for or being traded to the Yankees (CC Sabathia, Mark Teixeira) and the Red Sox (Crawford, Adrian Gonzalez), poorer teams have no chance.

If, however, these teams had help in the form of revenue sharing, they might be able to keep the Fielders and the Pujolses and make an impact on competitive balance.Albert Pujols 225

Take Fielder away from the Brewers and Pujols from the Cardinals, and where would those be? They would most likely not be fighting each other for the National League Central championship.

Any such system would require good-faith bargaining from both club and player. Just as clubs and players’ agents have learned not to submit outrageously high and low figures in salary arbitration, they would be wise not to seek ridiculously expensive or cheap contracts in free agency.

This would not be a system patterned after salary arbitration. No individual or panel would hear arguments for contracts and select one proposal or the other. The players fought too long and too hard in their quest for free agency to have it diluted in any way.

But the new system would provide a means for players to stay put if staying put is their preference. If it isn’t, if they want to play for a specific team or in a specific city, or get the most money they can get, the free agents could pursue whatever deals they want wherever they want, as has been the practice since the inception of free agency in 1976.

Ron Shapiro, a veteran agent, would probably be a good choice to help formulate a system to keep players at home because he did it for Kirby Puckett (Minnesota), Cal Ripken (Baltimore), and more recently, Joe Mauer (Minnesota). Shapiro negotiated good contracts for all three players even though the clubs knew they wanted to stay with them.

When I first thought of the idea of a free-agent makeup pool, I wasn’t sure if it was a terrific idea or a dumb idea so I contacted people on both sides of the labor fence. I told them I wasn’t looking for publishable comments, just their thoughts pro and con.

Nobody dismissed the idea as dumb, and I got opinions that players would love it and owners would hate it and owners would love it and players would hate it. Just about everybody said it would be complicated and difficult to work out the details.

That’s o.k.; I have confidence in these guys. They have worked out two consecutive labor agreements without a work stoppage.

One executive raised a valid point.

“Put aside whether it’s realistic,” he said, “but how would it affect negotiations?” Agents, he said, could factor the existence of the pool money into their contract demands, and clubs could do the same with their offers.

As an example, he cited clubs’ salary negotiations with coaches. “They negotiate salaries’” he said, “knowing the coaches get licensing money from the union.”

One problem with the existing revenue-sharing system has been the wealthier clubs’ questioning of whether the poorer clubs appropriately use the money they receive. The Florida Marlins were reprimanded last year for not using their revenue-sharing receipts properly. Other clubs, including the Pittsburgh Pirates, have been accused or suspected of misusing the money.

Having a pool for free agents could have a positive effect on the spending, one executive said, and another added that the money could be mandated for use to sign free agents.

Besides the news that the owners are considering a link between free agency and revenue sharing, my conversations with executives on both sides elicited a very honest and candid comment from an executive on the management side of the labor fence.

The executive said the idea of having agents and clubs negotiate free agents’ contracts backed by a supplemental revenue-sharing fund had an inherent problem.

“They don’t really trust us,” he said.

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