Improving Competition Without Re-Alignment or Other Elaborate Schemes

Much is said, here and elsewhere, about how to increase competition within MLB.  Plans range from floating divisional realignment to restructuring the luxury tax and revenue sharing to imposing a salary cap.  There is a lot of background discussion of various ideas below the jump, so if you're not interested either look for the ---ALL CAPS--- disclaimer for the discussion of the plan, and look for the bolded part for the actual plan.

Floating realignment isn't for me.  The existing rivalries mean too much (though I could go for some adjustments to the schedule formula), and there are too many variables in how floating realignment would be achieved.  Because I find the luxury tax and the idea of a salary cap unnecessarily punitive, I am not receptive to going any further with those type of plans.  Unless there is an enforcement mechanism for reinvesting the revenue sharing, I'm not sure what should be changed there. 

I'm also not sure how a cap would be imposed in today's sports environment.  You can't roll back payrolls to an NHL/NBA-like level and it's at least 15 years too late to do away with guaranteed contracts.  Additionally, fans, especially those that are willing to spend money to attend games, are aware that there is a discord between the perpetually increasing costs of attending a baseball game and the static (or relatively stable) nature of a salary cap.  While a salary cap does appear to increase parity within leagues, the parity is either superficial (NHL, NBA, and NFL have far more playoff spots) or fleeting (the other leagues' champions regularly dismantle as winning and/or successful players are plucked from their rosters.  Further, wealthier teams in larger markets will continue to be able to hold their payroll at the top of the cap; smaller market teams will continue to be subject to regional economic conditions and the yearly successes or failures of the team. 

Any plan for increasing or incentivizing competition must account for the reality that sports leagues will always be comprised of teams located in a variety of market sizes.  To an extent, MLB recognizes this reality and has given us revenue sharing to accommodate it.  Unfortunately, there is no mechanism to enforce the reinvestment of revenue sharing monies in the draft, player development or the major league payroll.  Even if there was a mechanism, there is always the possibility that a team would simply reallocate or reduce part of an existing budget for one facet of the team's operation and then use the revenue sharing money to augment that reduced budget.  Enforcing the reinvestment of revenue sharing is a tricky, involved process that might not guarantee anything. 

In addition to recognizing the reality of various market sizes, any plan must also be drafted with great foresight.  Dynasties don't last forever.  Many PR commenters have noted that the Yankees' payroll not only gives them an immediate economic advantage in the draft, retaining players and free agency, it also gives them an unparalleled ability to correct their mistakes by absorbing part or all of a player's salary in a trade or release. 

Again, to an extent, a salary cap could mitigate that problem.  There are myriad other problems that arise from a salary cap, however, including the transfer of bad contracts from high revenue to low revenue teams and vice versa.  Let's assume that guaranteed contracts are not going anywhere in MLB, and use the Alex Rios release as an example.  The White Sox would assume the entire cap hit.  That works for a bad contract and high risk/reward player like Rios going to a high revenue team, but if the player is going in the opposite direction it hinders the ability of a lower revenue team to take chances without risking future cap space.  If exceptions are created, such as the ability to negotiate a share of the cap hit between the two teams, it leaves room for abuse by high revenue teams.*

* I realize that this is over-simplified and/or elementary, but the other leagues' salary cap schemes are elaborate, full of weird exceptions developed over time (the Allan Houston and Larry Bird Rules in the NBA, for instance), and open to manipulation.

------------------------------------------ACTUAL DISCUSSION OF PLAN STARTS HERE-----------------------------------------

Despite the length discussion above, I have a modest, brief, and hopefully sensible proposal for increasing competitiveness in MLB.  It was inspired by a line a Halos Heaven post:

Not so impressed, and really I'm not impressed with free agency at all these days. It's become kind of a garage sale, there may be some fairly nice 5 year old Crate n Barrell stuff in there, but it's all colors no one uses anymore.... or weird shapes and sizes.

I agree with this sentiment.  Despite the Holliday contract last year and some others, teams are more aware than ever that they can't guarantee a 30+ year old player more than 4-5 years.  Similarly, lower and middle revenue teams are increasingly aware of the high reward of signing a rising young talent to a long, cost-controlled contract (Tulo, Longoria, etc).  Consequently, I think, there are going to be fewer and fewer prime age (27-28) year old first time free agents.  Especially when combined with teams' increased awareness of avoiding Super Two status.  Sure, Boras will still be around to bend the curve, but even he can only do so much. As we go forward, we are entering an era where the draft is paramount (international scouting being a close second).  Maybe it always has been this way, or maybe it won't always be this way.  For the foreseeable future if a team wants to go from being the Pirates/Royals to the Rays/Rockies, scouting and drafting is absolutely key. 

Now on to the very brief proposal: institute a three tiered draft system for the first 2-3 rounds (completely arbitrary number), where the standings are broken down into thirds and a weighted lottery is instituted for each tier.  The lottery should be mildly, not absurdly (ie, not like the NBA draft), weighted toward the worst teams in each tier.  This accomplishes a few things:

1. It provides incentive to continue improving.  You will always have a reason not stay at the bottom of your tier because you'll no longer be guaranteed to pick 1st, 2nd or 11th, 12th or 21st, 22nd.  I think it's particularly useful to motivate the people middle tier to improve their teams, and somewhat eliminates the "incentive" to finish last in the standings.
   
   
2. It provides the potential to eliminate the image that drafts "penalize success."  I don't think it hurts over competition if the Yankees, Red Sox, or Angels pick 21st instead of 29th or 30th.  It also allows a low revenue team like the Rays a better chance to continue adding talent by allowing them to potentially draft a better player following a successful year. 
   
   
3. Creating three tiers limits the risk involved in an all-lottery style draft.  Using the Rays again, it would be cruel to bump a low revenue team that wins 80 games from the 18th spot to the 30th spot.  At worst, this would bump them to 20th.  There is great motivation to finish better and move up the standings but down the draft because there would be increasingly minimal consequence to falling below your normal draft spot per the standings.  While it would be tough to see them fall from 21st to 30th, but the weighting limits this possibility and, frankly, great reward has to carry some risk.

I'm sure there are more ups and downs to this plan than I am explaining in three points, but I think it is a fair way to create incentive to improve a team.  It is also one of the few  plans for increasing competition that I can envision that does not rely solely on punishing more successful and/or higher revenue teams.  Plus, I've always liked the idea of restructuring the draft.  Two birds, one stone?