103 replies to this topic

[OCD SS]

Tweets are coming in that MLB is pushing back the start of free agency by one day, likely to announce the new CBA:

RT @ctrent: MLB pushes back free agency a day -- means new CBA is close

Here's the release:

The Office of the Commissioner of Major League Baseball (MLB) and the Major League Baseball Players Association (MLBPA) today announced that in connection with the collective bargaining process they have agreed to delay the start of the free agency period for 24 hours, to 12:01 a.m. (EST), Sunday, October 30th.

The MLBPA will release the list of Free Agents and potential Free Agents on Sunday, October 30th. Free agents will continue to be able to sign contracts with new Clubs beginning 12:01 AM EST Thursday, November 3rd.

This thread can serve as a place to discuss the implications of what Bud hath wrought.

[CaptainLaddie]

What changes can we expect?

- International FA draft
- change to draft pick compensation for lost FA
- Slotting
- expanded playoffs

What else?

[tonyarmasjr]

What changes can we expect?

- International FA draft
- change to draft pick compensation for lost FA
- Slotting
- expanded playoffs

What else?

Can somebody explain this? I haven't followed the process too closely; what are they discussing here?

[CaptainLaddie]

Sorry I meant a amateur draft, not FA. Ha.

[Rasputin]

What changes can we expect?

- International FA draft
- change to draft pick compensation for lost FA
- Slotting
- expanded playoffs

What else?

The only thing that I think is more likely than not is the expanded playoffs and I just hope it's a three game series rather than one. One would be retarded. Really really fun but retarded.

[soxhop411]

BizballMaury Maury Brown
hGH testing in #MLB? Yes. On the way.

BizballMaury Maury Brown
@
Depends. Hard-slot could be biggest. Rev-sharing, Luxury Tax (at top & bottom) hGH testing RT @bosoxholic What big changes do you expect?

BizballMaury Maury Brown
@
Announcement could come by late next week RT @bosoxholic what is the update on the MLB CBA?

[TheGoldenGreek33]

- International FA draft

Slim to no chance. There's a better chance hard-slotting goes into effect than an international draft, which would effectively eliminate baseball in Latin America.

[CaptainLaddie]

Slim to no chance. There's a better chance hard-slotting goes into effect than an international draft, which would effectively eliminate baseball in Latin America.

I'm ignorant: why would an international draft kill baseball in Latin America? I can sort of understand why, but give me a reasonable answer.

[Orel Miraculous]

I'm ignorant: why would an international draft kill baseball in Latin America? I can sort of understand why, but give me a reasonable answer.

It wouldn't, and the proof of this is Cuba, where baseball is alive and very well despite the fact that Cuban ballplayers haven't had the economic incentive that is MLB international free agency in 50 years.

There is a line of reasoning though, based on the Puerto Rico experience, that elimination of international free agency will hurt player development in Latin America. Puerto Rican players became subject to the draft in 1988. Prior to that, the number of Puerto Rican players in MLB was more or less the same as the number of Dominicans. Since the implementation of the draft, the number of Puerto Rican players has stagnated while the number of Dominicans and Venezuelans has exploded.

An international draft wouldn't necessarily have the same effect in other Latin countries, though. Mainly because the Latin players won't be competing against Americans for a finite number of draft picks, as the Puerto Rican players are forced to do. The disincentive to scout Puerto Ricans that developed following their inclusion in the draft won't develop for Domincans and Venezuelans because the teams aren't going to be forced to choose between raw Dominicans and more-polished Americans--there will be two separate drafts.

This really is all moot though. Its been all but dropped from the agenda because it is a logistical nightmare.

Edit: I want to add that while I don't necessarily agree with the theory that the international draft will kill baseball in Latin America, I am against the international because it will hurt baseball everywhere else, particularly in Europe, Brazil, and other regions where baseball is still a developing sport. Right now teams have an economic incentive to throw a little money at a guy like Rick Vandenhurk, develop him, and hope he can contribute to the MLB club at some point in the future. If an international draft is implemented, teams aren't going to use a pick on Vandenhurk if it means passing up on a more experienced Dominican.

Edited by Orel Miraculous, 30 October 2011 - 08:56 PM.

[TheGoldenGreek33]

I'm ignorant: why would an international draft kill baseball in Latin America? I can sort of understand why, but give me a reasonable answer.

Fewer kids will play. Less see it as a way to get off the island. Less scouts, less exposure, less money. I know that's hard to imagine, but if you look at how much Puerto Rican signees get each year in the draft, it's far below what they were getting compared to American draftees when they were in the international free agent pool. They don't have the leverage of quality college scholarships, so they get slot money or less almost universally. The net result is a decline in Puerto Rican players in baseball, and Dominican and Venezuelan players have filled the void. Baseball isn't nearly as popular in Puerto Rico now, and even if you don't believe that the draft is reason for it, the timing is uncanny as to when the talent trickled off. It lines up perfectly.

Here's some numbers:

In the 1980s, 46 Puerto Rican players debuted in the Major Leagues.
From 1990-1994, 27 Puerto Rican players debuted (all non-drafted).
From 1995-1999, 33 Puerto Rican players debuted. Ricky Otero was the first draft Puerto Rican to make the majors, and that was in April 1995.
From 2000-2004, 29 Puerto Rican players debuted, all drafted.
From 2005-2010, only 15 Puerto Rican players have debuted.

Start naming Puerto Rican prospects off the top of your head, and you'll see that it's not getting better. The draft had a relatively slow-killing effect on the island because there were already connections in families and kids and scouts on the island that remained there for a while. Now the academies the teams built are completely gone, and the scouting has completely turned over. Now most Puerto Rican full-time scouts are actually South Florida scouts. And Puerto Rican kids are turning to basketball. They can afford it, and they can also get American scholarships to play, since basketball scholarships are full rides. The vast majority of baseball scholarships are not full scholarships, so kids have to pay a good bit for it.

Edited by TheGoldenGreek33, 30 October 2011 - 11:20 PM.

[Saby]

I'm surprised more people here aren't worried about the extra WC. If I were a Sox fan, I'd be livid to find that by finishing second to the Yankees with their 210M+ payroll ( and possibly better than any other MLB team), the RS would have a lottery chance of getting into the playoffs

Edited by Saby, 30 October 2011 - 11:44 PM.

[cannonball 1729]

I'm surprised more people here aren't worried about the extra WC. If I were a Sox fan, I'd be livid to find that by finishing second to the Yankees with their 210M+ payroll ( and possibly better than any other MLB team), the RS would have a lottery chance of getting into the playoffs

Oh,we are, but I think we already had the "vent about the new system" thread for that.

[BigMike]

I really hope they wither fix or completely do away with he free agency compensation system

Something more like the NFL system where you only reap compensation benefits if you lose more than you sign.

[zenter]

Fewer kids will play. Less see it as a way to get off the island. Less scouts, less exposure, less money. I know that's hard to imagine, but if you look at how much Puerto Rican signees get each year in the draft, it's far below what they were getting compared to American draftees when they were in the international free agent pool. They don't have the leverage of quality college scholarships, so they get slot money or less almost universally. The net result is a decline in Puerto Rican players in baseball, and Dominican and Venezuelan players have filled the void. Baseball isn't nearly as popular in Puerto Rico now, and even if you don't believe that the draft is reason for it, the timing is uncanny as to when the talent trickled off. It lines up perfectly.

Here's some numbers:

In the 1980s, 46 Puerto Rican players debuted in the Major Leagues.
From 1990-1994, 27 Puerto Rican players debuted (all non-drafted).
From 1995-1999, 33 Puerto Rican players debuted. Ricky Otero was the first draft Puerto Rican to make the majors, and that was in April 1995.
From 2000-2004, 29 Puerto Rican players debuted, all drafted.
From 2005-2010, only 15 Puerto Rican players have debuted.

Start naming Puerto Rican prospects off the top of your head, and you'll see that it's not getting better. The draft had a relatively slow-killing effect on the island because there were already connections in families and kids and scouts on the island that remained there for a while. Now the academies the teams built are completely gone, and the scouting has completely turned over. Now most Puerto Rican full-time scouts are actually South Florida scouts. And Puerto Rican kids are turning to basketball. They can afford it, and they can also get American scholarships to play, since basketball scholarships are full rides. The vast majority of baseball scholarships are not full scholarships, so kids have to pay a good bit for it.

Isn't this a somewhat false analogy? When Puerto Rican kids became subject to draft, logical economic thinking on the part of clubs means that they would put more money into international development (DR, Panama, etc) because they still had a better ROI than the draft. Puerto Rico instantly became a higher-risk for clubs versus international FA. A full-on international draft will mean the DR will continue to be competing against Panama and Venezuela, etc. I don't see how keeping foreign countries on a level playing field would change much in the long run.

[TheGoldenGreek33]

Isn't this a somewhat false analogy? When Puerto Rican kids became subject to draft, logical economic thinking on the part of clubs means that they would put more money into international development (DR, Panama, etc) because they still had a better ROI than the draft. Puerto Rico instantly became a higher-risk for clubs versus international FA. A full-on international draft will mean the DR will continue to be competing against Panama and Venezuela, etc. I don't see how keeping foreign countries on a level playing field would change much in the long run.

It all just depends on the structure of a proposed international draft. Under the current plan, all 30 teams have the right to bid on one player. Obviously, in a draft, only one team is offering the signing bonus. It's common sense that signing bonuses would significantly deflate, therefore fewer kids would take interest, if a draft was implemented. Overall, interest will inevitably weaken. Puerto Rico is a prime example.

[lexrageorge]

I really hope they wither fix or completely do away with he free agency compensation system

Something more like the NFL system where you only reap compensation benefits if you lose more than you sign.

Except the current system is not broken in this regard.

[Orel Miraculous]

It all just depends on the structure of a proposed international draft. Under the current plan, all 30 teams have the right to bid on one player. Obviously, in a draft, only one team is offering the signing bonus. It's common sense that signing bonuses would significantly deflate, therefore fewer kids would take interest, if a draft was implemented. Overall, interest will inevitably weaken. Puerto Rico is a prime example.

What happened in Puerto Rico is not that kids became less interested in baseball because signing bonuses deflated (in fact, the average signing bonus is a lot higher for a drafted player than for an IFA.) What happened was that teams no longer had the same incentive to scout and develop talent there. It is more cost effective for MLB teams to develop players through international free agency than through the draft, therfore Puerto Rican players became economic inefficiencies compared to other Latin players. This would not be an issue with an international draft because all the countries will be placed on a level playing field.

Your argument is that players will lose interest because the average signing bonus will drop from $250,000 to $100,000 (I completely made up the second number since we have no way of really knowing what will happen to the numbers, the first is an ESPN estimate), that's laughable in a country where the per capita income is about $8,000.

[Kevin Jewkilis]

Except the current system is not broken in this regard.

I think there's a legitimate philosophical question as to whether (for example) the Red Sox deserve compensation for a player like Bedard, given that he spent all of two months on their roster and they can easily afford to re-sign him (even if they choose not to). In effect, it becomes an avenue to trade draft picks. I'd be open to a requirement that a team can't get compensation unless they had a player for a minimum time (be it two or three years).

The rebuttal to this argument is that the deadline sellers can get more more or better prospects for their rental players because they come with draft picks as an insurance policy against not being able to re-sign them.

Also, I could see the MLBPA having a problem with the picks because of the perception that it suppresses the salaries of marginal type-A free agents. We see this in play when talking about constructing a bullpen. My recollection is that last year, a lot of people expected the compensation picks to hurt Soriano's value until the Steinbrenners overruled Cashman and gave him that big contract anyway.

[cannonball 1729]

Except the current system is not broken in this regard.

Sure it is. If the Sox and Cardinals both have Type A shortstops, they can sign each others' shortstop and get an extra pick (and swap picks as well), even though there hasn't really been a substantive loss for either team (or, if there is, it's only a loss for one of the teams). Worse, if the Sox sign Type A FA's from three clubs (say, the Dodgers, Mets, and Angels) and lose three of their own, they may lose their first, second, and third round picks, gain the first round picks of the three teams who took their free agents, and also pick up three sandwich picks (essentially picking up five first rounders for a 2nd and a 3rd). The Sox have used this to great effect recently (in fact, the second scenario is almost exactly how the 2004-2005 offseason went down), but it's an extremely broken system.

[maufman]

Draft-pick compensation isn't going anywhere. Without it, the union would have no say over the amateur draft, so the players want it. Owners like compensation for the obvious reason -- it's a tax on free agency.

[Gdiguy]

Draft-pick compensation isn't going anywhere. Without it, the union would have no say over the amateur draft, so the players want it. Owners like compensation for the obvious reason -- it's a tax on free agency.

I think cannonball's post is something that will (fairly soon) have to get fixed, if for no other reason than to encourage teams to sign their own free agents above free agents from other teams (instead of effectively penalizing them for doing so, as is the case currently). Gaming the system is less of an issue to me (since every team can do so if they want to, it may be ridiculous but isn't a huge problem for competitive balance), but actively discouraging teams from re-signing their own players has always struck me as a bit odd.

[cannonball 1729]

I think cannonball's post is something that will (fairly soon) have to get fixed, if for no other reason than to encourage teams to sign their own free agents above free agents from other teams (instead of effectively penalizing them for doing so, as is the case currently). Gaming the system is less of an issue to me (since every team can do so if they want to, it may be ridiculous but isn't a huge problem for competitive balance), but actively discouraging teams from re-signing their own players has always struck me as a bit odd.

Right. Draft compensation makes sense in the abstract, but there's no reason that it can't be changed to stop rewarding teams for simply swapping their free agents for other free agents (especially teams that swap their free agents for better free agents). Something as simple as putting in a rule that teams don't get compensation unless they lose more players (or at least better players) than they gain would go a long way toward a solution.

[SoxScout]

Stark article talks about how there is currently no luxury tax, and a tug-of-war over Type-A/Type-B, and slotting...

So with neither side moving and the negotiating clock ticking, a labor deal which once seemed imminent remains in limbo. And the first casualty, at least for now, is the luxury-tax system which has hung over the sport since 2003.

http://espn.go.com/m...xury-tax-system

[Snodgrass'Muff]

Stark article talks about how there is currently no luxury tax, and a tug-of-war over Type-A/Type-B, and slotting...


http://espn.go.com/m...xury-tax-system

Does this mean they've agreed to do away with it or that they've simply stopped talking about it for now? The article suggests that a new luxury tax will be agreed upon, but that line reads more like it's been dropped from negotiations. And the line just before what you quoted is a bit telling.

The union is pressing for a change in the free-agent compensation system for Type A free agents, one which would no longer require teams to give up first-round draft picks if they sign premier free agents. The union also wants that change to take effect starting with the current offseason.


The owners, according to one source, now have taken the position that they are willing to make that concession only if they get a hard slotting system for draft picks in return.

[soxhop411]

Does this mean they've agreed to do away with it or that they've simply stopped talking about it for now? The article suggests that a new luxury tax will be agreed upon, but that line reads more like it's been dropped from negotiations. And the line just before what you quoted is a bit telling.

[/font][/color]

No... the Lux tax expired once the season ended... There will still be a Lux tax once the new CBA is agreed on

[soxhop411]

pgammo Peter Gammons
Free agents now cannot sign until clubs know what the system will be

[absintheofmalaise]

According to the Rosenthal column today, there will be significant changes to the FA compensation system and how teams can spend money on draft picks. No details though.

[OCD SS]

I guess it really doesn't make sense to get too worked up over anything until we see what the actual details are, but I really worry about the unintended consequences of what Selig and the owners are trying to gain. There is no way that hard slotting will not ultimately drive talent away from baseball and into other sports; messing with the draft or IFAs will barely save teams any money, and in the long run they'll wind up with a lesser product on the field.

[zapo]

Buster Olney:

on the "10 yard line" with draft changes for the new CBA. Slot recommendations for the first 10 rounds, teams not required to stay at slot, but repeated cumulative signings in excess of preset levels could result in loss of future draft picks. Also, it looks like type A will not result in a lost first-round pick, but there will continue to be compensation of some form.

Nothing hashed out but clear compromise by both the players and owners...

[Hee-Seop's Fable]

Buster Olney:

on the "10 yard line" with draft changes for the new CBA. Slot recommendations for the first 10 rounds, teams not required to stay at slot, but repeated cumulative signings in excess of preset levels could result in loss of future draft picks. Also, it looks like type A will not result in a lost first-round pick, but there will continue to be compensation of some form.

Nothing hashed out but clear compromise by both the players and owners...

That sounds like less drag on free agent spending, but also more value in higher draft position... so more value in locking up players before they hit free agency, and on spending free agent dollars on the right players, where some semblance of value can be found.

More albatross contracts dragging foolish teams down, and more of a premium on development and retention.

[soxhop411]

SI_JonHeyman Jon Heyman
Mlb, union are close to agreeing on new cba deal. Things are fluid but there will be no hard slots for draft choices

[maufman]

So there will still be draft-pick compensation, which means the draft will still be subject to bargaining, but because the compensation will presumably be nominal, it won't serve as a tax on free agency.

That's a win for the players. I wonder what the owners got in return.

[crow216]

Don't know if you guys have seen it or not but apparently they are very close to a deal.

The deal, as per Olney, includes

Among other things, (the deal) will pave the way for realignment of the sport into two 15-team leagues, adding a second wild-card team in each league, spreading interleague play throughout all six months of the regular season and making significant changes to the draft, free agency and the so-called "Competitive Balance Tax."

http://espn.go.com/m...eal-sources-say

[Hee-Seop's Fable]

And from that article, here's the money quote on free agent compensation:

Under the current system, teams are required to give up a top pick in return for signing all "Type A" free agents, as long as their previous club offers them arbitration. Under the new agreement, the formula for classifying players would change to limit compensation only to a select few stars -- i.e., CC Sabathia, but not Grant Balfour.

So the ordinary veteran free agents should be able to move about the league more freely. It'll be interesting to see what that does to journeyman deals, if anything. Clearly the marginal A's under the old somewhat arbitrary ranking system won't be left out in the cold as long.

[SoxScout]

@MelissaSeguraSI Melissa Segura
Source: New MLB CBA said to include a hard cap and a floor for international signings. Unclear when it would go into effect.

https://twitter.com/#!/MelissaSeguraSI/status/136823545056595968

[HangingW/ScottCooper]

The way the draft program was explained to me was that there will be a cap on spending in the first 10 rounds and that would be determined by the total recommend slotting for a specific team's picks in those 10 rounds. A team with the #1 overall pick will have more leeway than a team picking 30th overall. You can still overpay the slotting fees but you need to make up that money elsewhere. My assumption would be that making up for overpaying a player above their slotting fee would be done by not signing another pick and that seems counterproductive. Perhaps they've set it up so that the cap would only be applied to picks that are actually signed.

Edited by HangingW/ScottCooper, 16 November 2011 - 11:20 AM.

[Spacemans Bong]

The way the draft program was explained to me was that there will be a cap on spending in the first 10 rounds and that would be determined by the total recommend slotting for a specific team's picks in those 10 rounds. A team with the #1 overall pick will have more leeway than a team picking 30th overall. You can still overpay the slotting fees but you need to make up that money elsewhere. My assumption would be that making up for overpaying a player above their slotting fee would be done by not signing another pick and that seems counterproductive. Perhaps they've set it up so that the cap would only be applied to picks that are actually signed.

OTOH that gives teams the flexibility to blow away that talented guy who also has a football scholarship to Texas, which is a good thing. Jokes about shitty 2011s aside, baseball is better for having had Crawford and Dunn and Mauer in the game.

[HangingW/ScottCooper]

I don't think it would be a cap for the reasons I mentioned above. A tax makes a lot more sense, and that way it can be applied only to the picks that you sign as well. It would be counterproductive if teams were encouraged not to sign certain picks because in order to stay under a luxury tax that's applied to the first 10 rounds.

Edited by HangingW/ScottCooper, 17 November 2011 - 02:33 PM.

[SoxScout]

A source told ESPN Insider Jim Bowden that the new deal will include notable changes:

• An increase in the minimum salaries (from $480,000 to $500,000) during the life of the deal.

• A larger number of players -- known as Super Two players -- will be in a position earn arbitration eligibility with less than three years of major league service. Previously, players had to have 86 days of service in the big leagues and be in the top 17 percent in total service in their class to become a Super Two player. That number will increase to more than 20 percent.

• The date for clubs to decide whether to tender contracts to players will move up by 10 days, to Dec. 2.

• Teams will have to determine whether they make a qualifying offer for a free agent at a one-year guaranteed salary based on a formula. That number is likely to be upwards of $12 million, making it highly doubtful teams would use it on players who aren't superstars. If the player rejects the offer and signs with another team, the signing team loses its spot in the first round of the amateur draft and moves to the end. Teams will no longer lose a pick for signing a premium free agent.

• There will also be changes in the amount of money clubs will spend on drafted players, getting rid of the current slotting system and giving each team a pool of money to spend on its draft picks. There will be penalties for exceeding the threshold, which would range from 75-100 percent for each dollar over the line.

http://espn.go.com/m...act-sources-say

[Kevin Jewkilis]

• Teams will have to determine whether they make a qualifying offer for a free agent at a one-year guaranteed salary based on a formula. That number is likely to be upwards of $12 million, making it highly doubtful teams would use it on players who aren't superstars. If the player rejects the offer and signs with another team, the signing team loses its spot in the first round of the amateur draft and moves to the end. Teams will no longer lose a pick for signing a premium free agent.

If I'm reading this correctly, then what happens if a player signs with another team quickly (c.f., Papelbon)? It's one thing to offer him arbitration just to get a pick, but does this mean that Philadelphia knows they won't lose their position in the draft? Would a team make a late offer anyway? If not, then it seems like there'd be pressure on teams to try to sign free agents quickly before they can lose their spot.

[soxhop411]

According to Michael S. Schmidt of the New York Times, MLB’s new collective bargaining agreement, which is set to be announced early next week, will include blood testing for human growth hormone (HGH).

Here are some of the details:

The bargaining agreement, which could be announced early next week, calls for blood testing to begin in February, when players report to spring training. Players who test positive will face a 50-game suspension, which will be the same as the first-time penalty for a positive steroid test, according to the two people.

If Schmidt’s report proves correct, baseball will be the first of the major North American professional sports leagues to implement blood testing for drugs among unionized players. The NFL and NFLPA tentatively agreed to test for HGH in their recent collective bargaining agreement, but the union has yet to approve testing procedures. Baseball currently has testing for HGH among minor league players because it doesn’t need the consent of a union. Former major leaguer Mike Jacobs was the first to test positive earlier this year.

It’s definitely a surprise to learn that the players have agreed to blood tests for HGH, but if they use the same type of testing they have in the minor leagues, this could be as much about positive P.R. as actually catching someone.

http://hardballtalk...._medium=twitter


I am OK with this, the Minors are already doing this, not that big of a deal

[czar]

Source: All remaining Type A relievers - Madson, K-Rod, Bell - will NOT be subject to draft-pick compensation this off-season. MORE #MLB

Teams that sign those relievers, and certain other Type As, will not forfeit picks. Teams that lose those players will still get them. #MLB

Top Type As - Pujols, Fielder, Reyes, plus former MVPs Ortiz, Rollins and others - still will carry draft-pick compensation this year. #MLB

New rules take effect next winter. Elias rankings gone. Top FAs subject to comp if teams make them qualifying offers north of $12M. #MLB

Ken Rosenthal

[Bigpupp]

12M total or per year?

[Red(s)HawksFan]

12M total or per year?

I think it's one in the same. Qualifying offers, I assume, are one-year deals just like the arbitration offers that used to trigger compensation.

[soxhop411]

I think it's one in the same. Qualifying offers, I assume, are one-year deals just like the arbitration offers that used to trigger compensation.

Sox lucked out that Phi signed paps so early, since we still get the pick. But now that Comp is gone for closers, im betting the sox go hard(er) after a closer since they wont forfeit a pick... My money is on bell

[Red(s)HawksFan]

Sox lucked out that Phi signed paps so early, since we still get the pick. But now that Comp is gone for closers, im betting the sox go hard(er) after a closer since they wont forfeit a pick... My money is on bell

More than likely, it's the money/years required to get a Madson, Bell, etc that will give them pause. I don't think not having to give up a draft pick will change their valuation of a potential closer very much.

[Bigpupp]

I think it's one in the same. Qualifying offers, I assume, are one-year deals just like the arbitration offers that used to trigger compensation.

I think I'm too dense to understand. Would a 3 year/$4M per deal require a draft pick to be lost?

[Red(s)HawksFan]

I think I'm too dense to understand. Would a 3 year/$4M per deal require a draft pick to be lost?

Do you mean if the Orioles sign Ortiz to a deal like that, would they lose a pick? Or do you mean if the Sox make that offer to Ortiz and then he signs with Baltimore?

I'm fairly certain that "qualifying offer" refers to the team from which the free agent is leaving (in Ortiz's case, the Red Sox). And it would be a one-year tender in lieu of offering arbitration. So instead of the Sox offering arbitration like in past years, they'd need to make an actual contract offer. And if that one-year offer exceeds $12M, then another team signing Ortiz would give up a pick to the Sox. If the offer was for $10M, then Ortiz would come without the expense of giving up a draft pick.

Basically, the new system would force teams to prove how much they value the player they might lose by putting a hard number rather than a mystery arbitration number on the table. It actually sounds similar to the franchise tag in the NFL. Player can take the qualifying offer from their old team, or shop themselves knowing they carry the extra cost of a draft pick.

[E5 Yaz]

Teams that sign those relievers, and certain other Type As, will not forfeit picks. Teams that lose those players will still get them. #MLB

This will need to be explained more fully. Flow charts would help

[Bigpupp]

So instead of the Sox offering arbitration like in past years, they'd need to make an actual contract offer.

Aaaaand that's the part I wasn't getting. Makes sense now.