Tanking and the New CBA

For years tanking a season has been a controversial but generally accepted practice in the NBA and the NFL. Baseball was all but immune to tanking; the benefits of a slightly higher draft pick were usually just not worth it. We would see fire sales and youth movements but those are distinctly different events from the type of win-by-losing mindset that seems to crop up in those other two sports every year.

With the new CBA, that might have changed. Tanking may have arrived in baseball, and the trade deadline may never be the same.

Any team that falls in the bottom ten according to market size or revenue could benefit from tanking as a combined result of the draft cap, the draft cap lottery, and the competitive balance lottery. For our scenario, let’s use Pittsburgh. There is no doubt that Pittsburgh will be in the bottom ten teams by both revenue and market size. Pittsburgh also was about a .500 team for much of the season.

So let’s fast forward to next July. The Pirates are hanging around .500 again. They are just six games out of the Wild Card, but they would have to vault over four other teams to get there. On the other hand, they are just eight games out from having the third overall pick in the draft. If the Pirates choose to tank the season, they could wind up with up to four first round picks in 2013 and a mountain of extra cash to spend on that draft.

Because the signing deadline for the June 2012 will have passed before the July 31 trade deadline, Pittsburgh will know that three or four teams spent more on the 2012 draft than the budget allows and will be forfeiting their 2013 first round pick as a result. Let’s say that Pittsburgh was unable to sign their 2012 first round pick and as a result came in well under the draft cap. That means Pittsburgh goes into the lottery to receive one of the draft picks for 2013 taken from the teams that exceeded the cap. That lottery will be seeded according to a team’s record; the worse the team, the better the odds of an additional pick during the first round.

Also, because Pittsburgh did not sign their first round pick in 2012 (#8), they will pick in about that slot again in the 2013 draft.

On top of that, as one of the ten teams with the lowest revenue or smallest market, the Pirates will be entered into the competitive balance lottery that will grant them yet another pick after either the first or second round. Again, the odds of winning an early pick improve for teams with a worse record.

So, let’s add it all up. If the Pirates fail to sign their first round pick in 2012, spend less than the draft cap, and happen to wind up with a very poor record (whether by tanking the season or not), their 2013 draft could look like this:

Their 2013 pick (let’s assume its #3).
Their pick for failing to sign their first round choice in 2012 (should be around #9).
A pick from a team who exceeded the draft budget in 2012 (likely in the 20s, so we’ll say #23).
And a competitive balance lottery pick at the end of the first round (around #40). This pick can be traded.

Since the Pirates would have four of the top 40 picks, they would receive a lot of extra draft cap money for the 2013 draft. Even if that money is not enough to sign all four picks under budget, the Pirates could go over the budget by less than 10% and still not be seriously hurt in the 2014 draft. They would lose their first round pick, but could pick up a post-first round pick through the competitive balance lottery. Pittsburgh could easily wind up with four or five million more dollars in their draft budget than any other team in the draft. Between the extra funds and the extra picks, that should ensure the Pirates of a fantastic draft.

Now, you are the Pirates GM in July of 2012. You have a shot to gamble on the Wild Card, or trade away some players to reload on prospects and in the process greatly increase your odds of landing four of the top forty picks in the 2013 draft. Given that you are still building and really not expecting to seriously contend for another season or two anyway, how do you play it? Load up for the Wild Card, or tank for the draft?

The ability to add three or four high picks is a powerful motivator. And as the NBA has shown, even a lottery doesn’t stop tanking. Teams will try to maximize the number of ping-pong balls that have their name on them. I don’t think baseball will have the same degree of tanking as the NFL and NBA do, but for the first time in a long time tanking now appears to be a part of the game. Under the old CBA, Pittsburgh in this scenario does not tank; there is just no benefit to it. Under the new CBA? Extra high draft picks and, more importantly, extra draft money will change the nature of the argument. I think the Pirates hold a fire sale and load up with 2014 in mind. In short, in this scenario, I think they tank.

Now imagine what a July 31 deadline could look like if two or three teams in a similar situation to this example start unloading players to improve their draft lottery odds and get themselves extra draft cap money. Things could get awfully interesting in a hurry.