The following is adapted and expanded from my exceptionally and exasperatingly long read on the NFL Draft Value Chart - I'm not sure anyone has made it to the end so I am excerpting key parts when I am too lazy to write a new post.
After seeing Andrew Brandt (a must-follow on Twitter @adbrandt) refer to an espn.com article he wrote last summer on the Franchise tag, I thought I would dust off a portion of my NFL Draft behemoth and jump on the bandwagon.
Each of the three major American sports leagues (with
apologies to the Raptors and Blue Jays, and hockey) has a particular way of
dealing with their markets for talent. By looking at the comparison we can see some of the sources of value for players and owners - and the massive negotiating advantage that is the Franchise tag.
Baseball – Good for
veterans
Baseball allocates the first six years of a player’s
Major League career to the team. Arbitration means that the player has some
leverage to improve their situation – particularly in later years – but they
still receive a salary below their market rate during this period. Once they
have completed their first six seasons a player is a free agent in the truest
sense. Any team can offer him a contract for any amount or length of seasons.
The result of this structure is that the Winner’s Curse tends to play out for
in-demand free agents and surplus value to the team is not likely to be found
in players outside of their arbitration years.