Baseball does not need a salary cap. The results show it.
The owners no longer push for it, and that's probably the biggest reason labor agreements now get done so smoothly in this sport, and why the newest deal is now on track to be formally announced early next week, according to sources.
Details of the new agreement remain somewhat sketchy, but some of what we know seems positive. The revamping of draft-pick compensation for signing free agents, in particular, looks like a big improvement; the current system had become awkward and unhelpful to either side. Realignment and expansion of the playoffs are good for the game, too.
And then there are the new rules about the draft itself. Not good.
Commissioner Bud Selig and some owners wanted hard slotting for draft bonuses. While they didn't get that, the union eventually agreed to a system that will penalize teams for overspending on draft bonuses, including taking away future picks for teams that "overspend."
Really bad idea, and here are two reasons why:
First, under the current system, the draft is the best way for mid- and low-revenue teams to keep up with the big spenders. The Rays built a contender by smart drafting and smart spending, and the Nationals, Pirates and Royals are now doing the same.
Second, bigger draft bonuses help baseball as an overall business attract the best athletes available. Curbs on bonuses (combined with a lack of full scholarships given out by college baseball) push good athletes towards football and basketball, and that's bad for baseball.
More on that in a bit, but the worst part of the new system is the potential effect on mid- and low-revenue teams that have come to understand that draft spending is more cost-efficient and productive than free-agent spending.
General managers and scouting directors understand that, and it's why they're near-unanimous in behind-the-scenes opposition to the new rules. Owners who say that they want to build teams on scouting and player development (which is most of them) should understand that, but obviously don't.
Maybe they need to go and run teams themselves.
Look at the experience of Frank Coonelly.
When he worked for Selig, he was responsible for screaming at teams that spent more than baseball recommended. When he went to work for the Pirates at club president, he started to ignore the limits himself.
"It only took for him to be in the system to understand," said agent Scott Boras, who represented the Pirates' top two picks last summer, and negotiated above-slot deals for both (for a combined $13 million). "[These new rules] illustrate that those in the commissioner's office are not in the system."
Boras has data to back up a point I've made for a long time, which is that almost all of the biggest draft bonuses turned out to be good deals. The Nationals certainly don't regret the $25 million combined they spent to sign Stephen Strasburg and Bryce Harper.
Imagine how much they'd need to spend to add that kind of talent through free agency.
Imagine if the Pirates (pre-Coonelly) had paid Matt Wieters $6 million out of the draft in 2007, rather than passing on him because he wanted "above-slot" money. If they had Wieters, they wouldn't have had to give Rod Barajas $4 million to be their catcher in 2012, let alone have paid Ryan Doumit almost $9 million for the last two seasons.
Selig's backers would no doubt argue that in a true slotting system, Wieters would have accepted the slot number the Pirates were offering, because he couldn't make more money by slipping to a lower-drafting but higher-paying team.
But this new system doesn't provide for true slots. If the Pirates passed on Wieters because he was too expensive (and they didn't want to risk losing a future draft pick), a team like the Yankees could sign him for big money and say, "Forget the future pick." Their future pick is going to be lower in the first round, anyway, and it's not of nearly as much value to them as the Pirates' pick is to Pittsburgh.
It's a bad system, but there are ways to fix it.
One possibility: Allow each team one exception pick a year, where the bonus wouldn't count against draft-pick penalties. Or even allow an exception every other year.
Or, if you really want to allow the draft to serve the teams that need it most, allow an exception to teams drafting higher.
The point is, the new system already needs fixing -- and it can be fixed.
Baseball needs to allow the draft to benefit the teams that need it most, and it needs to allow the system to benefit the sport, by helping to attract the best talent.
Without significant signing bonuses, Bubba Starling is playing football at Nebraska, instead of playing baseball for the Royals. And Archie Bradley is playing football at Oklahoma, instead of playing baseball for the Diamondbacks.
Baseball is better for having signed them, and two teams that need to develop through scouting and the draft are better for it, too.
The new system isn't a disaster, but it's not good. The bigger news, though, is that baseball once again has labor peace.
And no salary cap.
Some fans, especially fans of small-market teams, remain convinced that a cap would help. But baseball has proven that it doesn't need one.
While it's true that big-spending teams enjoy an advantage, it's also true that smart management is even more important. The low-spending Rays have made the playoffs three of the last four years (same as the Yankees, and one more time than the Red Sox).
With no cap, baseball has had nine different champions in the last 11 years. And the Cardinals, one of the two repeat champs, did it without a super-high payroll.
The Yankees annually spend far more than everyone else, yet the Yankees have won just one of those last 11 World Series.
Good thing, too. Because if the Yankees were winning every year, you can bet that the other owners would have been pushing for a cap.
Instead, the owners pushed through a new deal that has some pluses -- and one significant minus.