Labor Peace Could Leave the Soriano Compensation in Pieces

Tracy Ringolsby of the Rocky Mountain News writes that their will be an apparent labor agreement between the owners and the players completed before the end of the World Series.

That’s the good news.

Ready for the bad news?

The new deal won’t have any major changes from the past, but there were be several subtle alterations that will have a long-term benefit. The two sides have agreed to eliminate draft choice compensation for teams losing free agents, and they will have a slotting system for bonus money paid to June draft choices

The key part is the elimination of draft choice compensation for teams losing free agents. If this is in fact part of the agreement (and it was a rumored part of the expiring agreement that got dropped before it was ratified), then there is a strong possibility the Nationals will not receive any sort of draft pick compensation if soon-to-be free agent OF Alfonso Soriano signs elsewhere. Soriano as a Type A free agent would allot the Nationals a 1st round draft pick (assuming it was not 1-15) and a supplemental 1st round selection prior to the second round. The Nationals failed to move Soriano at the July trade deadline, or in the subsequent waiver trading period. The conventional wisdom was that the Nationals were comparing potential offers to the two draft picks that would be received if Soriano moved on to another team in 2007.

Before anyone gets too worked up about it, we need to hear the complete details and whether or not this current off-season’s compensation rules will be grandfathered under the current agreement which expires on December 19. If the compensation is eliminated, the Nationals will be left with only the 2006 season to show for last off-season’s blockbuster trade for Soriano. This will be a key part of the Nationals’ rebuilding effort, those two draft picks are an important to re-establish the farm system.

The other part Ringolsby mentions is “a slotting system for bonus money paid to June draft choices.” This is bad news for the elite college/high school players who, at times, scare off those teams that need them most due to high bonus demands. Players will know what the maximum they can expect given their draft position and the examples of players who slide to later in the draft (and to the teams with larger budgets) due to high bonus demands.

The Nationals’ negotiations with Sean Black are the perfect example of this new aspect of the agreement. The average bonus for the #59 pick over the last three seasons (2003-04) was $585K, so a rough estimate of a 2006 bonus amount would be $600K. Black and the Nationals would have known going into the draft that $600K was the max that Black could expect and a yes/no would be a known entering the draft.

It’s great to hear that there will soon be labor peace and that the First Year Player Draft will be more of a known. It will be interesting to watch what happens with draft pick compensation.