This post delves further into the multi-level fantasy baseball league that I proposed before. If you haven’t read the first part, read it here, otherwise this won’t make much sense to you. I left off explaining how clients are assigned to their agents and vice versa. Now I will explain how contracts are negotiated between GM’s and agents. If a player is drafted and the GM only wants that player for the year, then they won’t need to negotiate a contract, the player will just be paid whatever he was drafted for and become a free agent the next year. If the GM drafts a player that we would like to keep for a while, like Clayton Kershaw for example, then it gets a little bit trickier.

When Kershaw is drafted, he is drafted on a one-year deal (as is every other player) and is under the control of the team that drafted him and the agent he “signed” with already. In order to negotiate a multi-year deal, the GM’s would have to follow the arbitration rules used by the MLB for their players to some degree. Basically, glean the salary information from all players that are in the same situation as the player that you are attempting to make a deal with. So, in keeping with Kershaw, let’s say he is drafted for $1 million, in order to determine his contract past that, we would look at a of couple things.

1) Kershaw has 8 years of MLB service time
2) Kershaw is a starting pitcher

If you take all of the starting pitchers salaries from 2017 with the same amount of service time and divide by how many players there are in that group, you get this table (information courtesy of Spotrac):

*All numbers rounded to the thousands place to make it easier for calculations

You can see in the bolded line, a starting pitcher with 8 years of MLB service time makes $15,714,000 per year on average (Kershaw is included in the calculation). Therefore, the negotiations start from there, $15,714,000 being the base yearly salary, between the team GM and the agent representing the player. I would imagine there should be a limit to how long contracts can be, something like 5 years so teams aren’t locked into contracts if a player takes an unexpected dip in production or gets severely injured, and to avoid a 13-year contract like Giancarlo Stanton that keeps a player forever.

This does pose a couple issues, like if only one person has a certain amount of service time. This isn’t an issue with starting pitchers but if you move to the catcher position, there are 3 different instances where there are 1 or 2 players with the same amount of playing time. In this instance (in my opinion) you just do the same calculation as every other year, I realize you could get the short end of the stick from an MLB team paying a decent catcher a ridiculous amount of money but that is just part of the game.

The process is relatively straight forward, it just requires a little bit of leg work to determine base yearly salaries for players. The actual negotiations between GM and agent could pose a bit of a problem in the first go around because people would not know exactly what is too much or too little. As you would assume there are competing interests, the agents get 5% of all contracts from their players so at the end of the year the agent with the most earnings, wins. Naturally, the agents will try to negotiate the most lucrative contracts and the GM will try to get the best bargain to keep his future payroll low.

To bring things a step further, GM’s could also negotiate different points of the contracts with their players’ agents. For instance, you could make them even more “realistic” by adding in performance bonuses. To give an example, Max Scherzer’s contract gives him a few different avenues to earn more money (Kershaw’s contract, or at least the available information, had very few extra incentives). Scherzer’s contract for each year of play offers the following:

All-Star/Silver Slugger/Gold Glove: $100,000
League Championship Series MVP: $150,000
World Series MVP: $250,000
MVP/Cy Young: $500,000 (2nd: $250,000, 3rd: $150,000, 4th: $100,000, 5th: $75,000)

To break that down in case it is not clear enough, if in one season Scherzer was an All-Star ($100,000), Gold Glove ($100,000), Cy Young winner ($500,000), and fifth in MVP ($75,000), he would gain an extra $775,000 for the year. GM’s could choose to try and write things like this into their contracts to not give players so much guaranteed money and potentially lessen the payroll hit.

Another type of incentive could be for injury prone players that you don’t want to give a lump sum of money to if they don’t play, but are skilled enough that you would like to have them under contract for multiple years. Stephen Strasburg is one of those examples of an injury prone player and written into his contract, he gets $1 million if he pitches at least 180 innings per season. Similarly, but for a different reason, because Bartolo Colon is older than dirt, to mitigate their financial risk the Rangers wrote into Colon’s contract that he gets an extra $100,000 each time he gets to 90, 100, 110, and 120 innings pitched. He then would get an extra $150,000 each time he surpasses 130, 140, 150, 160, 170, and 180 innings pitched. Going back more towards the injury prone players, in Felix Hernandez’s contract, if he sustains an elbow Injury for 120-130 days, added into the contract is a club option ($1 million) some years down the road into his contract, essentially cutting it short. Or GM’s could also add in club buyout options to abridge the contract.

There could be other nuances added in, depending on how involved people would want to be but like I said in the first post, this is still an idea unfolding in the back of my mind and could very well be reworked but I do believe that this could be something interesting to put into practice. Look for a following post wrapping up a few more things. Again, if you have any questions or helpful comments, let me know.