The sneaky science of service-time manipulation, and how to fix it
Teams can save about $15 million by delaying a top prospect's MLB debut
Washington sent Stephen Strasburg to the minors even though he's ready now
A possible fix would be to award a full year of service for a set number of days
As teams narrow their rosters and make the final few cuts before Opening Day, one would like to think that they're putting players on the roster that give them the best chance to win. However, for some teams the decision is not that straightforward. I'm talking, of course, about service time manipulation, which teams can employ in order to delay a young player's eventual foray into arbitration and the free-agent market.
Even if a young stud is clearly ready for the big leagues, it may not be in the team's best long-term interests to have him begin the season in the majors. Why? If a talented rookie debuts on Opening Day, he'll be a free agent in six years, presuming he remains on the big league club. However, by waiting one month, a team can push back his free agency an entire year. Additionally, if they wait a little longer, they can avoid "super two" status, and knock off a year of arbitration eligibility. Thus, it's no coincidence that we often see great prospects come up at the end of May or the beginning of June, when these key thresholds have passed. If you think it's unseemly for a team to purposely sandbag one of its own players' careers, you may be right, but the fact is that such a tactic can save a team millions of dollars. But is such a strategy worth it?
Nowhere is the contrast between the two approaches more on display this season than in Washington and Atlanta. Each team has one of the game's top two prospects: Stephen Strasburg for the Nationals and Jason Heyward for the Braves. Both players have dominated during spring training and appear to be ready for the majors. Heyward hit .347 while slugging .490 and was rewarded with the starting right field job in Atlanta. Strasburg, meanwhile, impressed every observer by striking out 12 and walking one in nine innings. He was rewarded with a trip to Double-A Harrisburg. Can anyone really argue that he's not one of the Nationals' best five starting pitchers? GM Mike Rizzo has said that he's doing what's best for Strasburg's development, but the real reason likely lies in doing what's best for the Nationals' bottom line. And who can blame them? The Nats will save millions by delaying Strasburg's first big league start until late-May, forcing his free agent-eligibility back a year.
The Machiavellian calculus involved in such a decision is the following: If a team brings up its prized prospect on Opening Day of his rookie season (and never demotes him), he'll likely cost about $51.5 million through his first seven years in the league: roughly $500,000 in his first few years, about $10 million while he's arbitration eligible, and, assuming they sign him to a contract when he becomes eligible for free agency, about $20 million as a free agent. However, by waiting until June for his debut, he'll cost just $38.7 million over his first seven full years ($32 million for the first 6 2/3 years and an additional $6.7 million for 1/3rd of a year of free agency). That's a savings of more than $12 million, all for pushing back a player's debut just eight weeks.
Another way to look at it is that the Nationals are essentially trading about eight to 10 starts of Strasburg as a rookie in 2010 for a full season of a fully developed Strasburg in 2016, when he'll be 28. When framed this way, the decision becomes a no-brainer. It's an even easier call considering that the 2010 Nationals aren't likely to go anywhere this season.
If the decision was so obvious for the Nats, what went into the Braves thinking? In an interview with Baseball Prospectus, a senior Braves front office member says that service time wasn't considered at all, and not only that, but that service time is never factored into this type of decision. That may be the politically correct thing to say -- and indeed the Braves are putting their money where their mouth is by giving Heyward a major league job -- but considering the dollars on the line, it's hard to imagine any team ignoring it completely. In fact, last year some suspected that Atlanta held back dominant rookie starter Tommy Hanson's debut until June in order to delay his free agency. Of course, nothing can really be proven. It's easy enough to send a player down and claim that he could use more seasoning. That may be true, but it doesn't mean that he's not worthy of a major league job at the moment.
Holding players back may be smart management, but as a fan this practice is annoying at best and maddening at worst. Almost all fans want to see their team put the best players on the field at all times, particularly when the player is a hyped young prospect who could become the cornerstone of the future. Nationals fans have waited long enough for something to cheer for, but they'll have to wait a bit longer before they get to see Strasburg in action. Having him on the big club would be best for the team, the fans and Strasburg himself. The one thing stopping it is a silly design of the arbitration rules which in essence costs teams millions of dollars if they bring up their top prospects at the beginning of the season.
This same situation happened last year with Orioles phenom Matt Wieters, and it will doubtless happen with countless other players in the future. The rule can also affect older players who are on track to just barely earn their six service years. Last year J.J. Hardy, then with the Brewers, and Alex Gordon of the Royals were sent down to the minors, essentially delaying their free agency by another year. Granted, both were struggling at the time they were sent down, but the motives surrounding the demotions are in question. Hardy, whose demotion left him one day short of free agency, felt strongly enough to consider filing a grievance over the issue, though he ultimately did not.
Is there a small fix that could be employed to prevent this perverse system of incentives? One suggestion is to award one full year of service time to any player who has been with the big league club for a set number of days. For instance, if any player has been in the majors for 50 days of a major league season, he could be awarded a full year of service. The NFL does something similar, giving one full accrued season to players on the protected roster for at least six games. There's no reason MLB and the players' union couldn't do the same.
Teams could still potentially hold down a good prospect, but rather than waiting a few weeks to bring up Strasburg, the Nationals would have to wait until mid-August to bring him up -- something they would likely be unwilling to do. Likewise, situations like Hardy's or Gordon's would not occur, since both had already played a significant number of games for their teams last season before being demoted.
Whether teams actually engage in this kind of service-time chicanery (and despite what they may say, their actions dictate that at least some teams do), such a rule-change would largely prevent the unbecoming incentives that are currently in place. Fans would be pleased, and so would young players, who would no longer have to fear being blocked by service-time considerations. Additionally, front offices would probably be relieved to be free of the burden and guilt over how and when to manipulate the system. There would still be room for some manipulation (we probably wouldn't see too many good young players called up with 51 days left in the season), but it wouldn't allow a team to knock off a year of free agency while still utilizing a player for the majority of the season.
With the difficulty in changing these types of labor rules and getting owners and players to agree on pretty much anything, I'm not holding my breath for change any time soon. In the meantime, fans will have to do some waiting of their own -- just about two months -- before seeing their teams' prized prospects take the field. With the rest of baseball, I'll be looking forward to Strasburg's debut in late May, but I sure wish we could see him on the Nationals' Opening Day roster where he belongs.
MLB Truth & Rumors