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The 'Tank Tax' Could Push Teams To Try Harder

Draft

When the 2018 season begins, roughly one-third of major league teams will be in the early or middle stages of rebuilds.

Baseball is a copycat league. And when we’re coming off a stretch where the previous three World Series champions won after complete teardowns that led to woeful big league play, it’s understandable other teams have tried to replicate that formula.

The current system’s relatively fixed draft slots provide a benefit for the worst big leagues teams. Before the new Collective Bargaining Agreement, the difference between picking first and third, fourth or fifth was relatively modest. Every now and then a Bryce Harper or Stephen Strasburg came along and made it extremely valuable to pick No. 1 overall but in other years, where there was no clear-cut No. 1 pick, the ability of each team to spend whatever they wanted in the draft meant top talents often waited to hear their names called–three of the top 10 bonuses in the 2010 draft came on players picked 28th or later. Nowadays, teams know their draft spending is fixed by their spot in the draft.

Front offices and owners have learned that selling hope and the future (and saving tons on payroll) is a better promotional appeal than trying to entice a fan base by adding a couple of mid-level free agents to a downtrodden team.

It’s hard to find anyone in baseball who believes the current system is ideal for the health of the game, but general managers don’t win contract extensions by making decisions that help the game overall. If you want to fix the system, you have to change the incentives so that it is preferable to win 75 or 80 games than 65.

Baseball could adopt a lottery for the draft, where the team with the worst record would no longer be guaranteed the top pick. Depending on how the ping pong ball bounces, a team with the 10th worst record could end up picking No. 1, although the lottery is weighted so that the worst teams have the best chances of picking at the top of the draft.

That’s the approach the NBA has taken for decades. And if you’ve followed the NBA at all, you might notice that it has done very little to keep teams from punting multiple seasons (or in the 76ers case, close to half a decade). It’s not that unusual to see an NBA team win less than 20 percent of its games. A lottery doesn’t do much to prevent teams from tanking.

Another option proposed is to adopt a salary floor, something the Major League Baseball Players Association has opposed in the past. The idea is that by ensuring teams spend a minimum amount at the big league level, more veteran players will receive contracts and no team will be able to cut payroll to the bare minimum.

But a salary floor doesn’t add any incentive to win. The same current structure would exist where rebuilding teams would have every reason to try to race to the bottom of the standings and the top of the draft. The only difference it would likely make is to make it much more likely that tanking teams would take on awful contracts (to reach the salary floor) while getting paid in prospects for taking the unproductive player. Imagine Jacoby Ellsbury heading to Miami with multiple quality prospects in exchange for a low level fringe prospect. The Yankees would get some breathing room under the luxury tax while the Marlins would edge just over the salary floor.

If the goal is to eliminate the incentives that entice a team to be terrible at the big league level for a number of years, you have to create incentives for not being awful, or disincentives that punish teams for being putrid.

So that’s why I propose the tank tax.

It’s relatively simple. The same draft system continues to exist. The worst team picks first, the second worst picks second, etc., with one caveat: any team that fails to win 70 games in back-to-back seasons faces a 10-spot draft penalty.

Have one awful season (like the Giants and Tigers 64-win teams in 2017) and your club reaps the benefits of having the top picks in the draft and the larger draft bonus pool that comes with it. But if a team wins 60-something games two years in a row, they pay the penalty. Instead of drafting first again, that team would draft 11th.

And the penalty escalates. Win less than 70 games three seasons in a row and it’s a 15-spot draft penalty. Four straight seasons with less than 70 victories and the team pays a 20-spot draft penalty. Twenty spots would the be maximum penalty, so a fanbase unfortunate enough to suffer through five straight seasons of 93 or more losses would see their team face another 20-spot penalty.

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But much like the luxury tax, the penalty resets anytime a team wins 70 or more games. What this would do is still allow rebuilding teams to garner better draft picks than successful teams, but much like relegation in soccer, it would also give them reasons to care about winning at the big league level.

Look at the currently rebuilding team like the Reds or the Tigers. Under the current system, neither team has much incentive to spend in 2018 to improve the big league club unless they see a clear path to 85 wins or more (and a potential playoff spot).

If the roster doesn’t look ready to do that, it makes more sense to save money on payroll, try out a series of young, less-proven players and reap the benefits of another top draft pick next year.

But with the tank tax in place, both teams would have reason to add a free agent or two to try to ensure that they get to 70 wins. The same incentives would apply during the season. A team facing the potential penalty would have every reason to try to win in September, as a three-game winning streak could be the difference between picking fourth or 14th. Instead of rewarding failure, the system would reward (admittedly, very modest) success.

The 70-win threshold is a suggestion. Maybe it’s too lax (75 wins would create a much stronger incentive for competitiveness, but would also be a much more difficult bar to clear). Maybe it's a little too strict. The same is true about the 10-spot penalty. All of this is negotiable.

But whatever the exact details, the core idea remains the same. By creating incentives for winning, more teams will try—to the benefits of fans and baseball as a whole. More teams will also spend in the offseason to genuinely try to improve, which helps veteran players potentially. And it will add another reason to care when a fourth-place team faces a fifth-place team in an otherwise sleepy September series.

So how much effect would it have had? Of the 240 team seasons from 2010-2017, 44 times (18 percent) a team has won less than 70 games. Without the rule, there have been 10 teams this decade would have triggered the penalty. The Reds (2015-2017), Twins (2011-2013) and Astros (2011-2013) are the only teams that won less than 70 games three years in a row and would have faced the larger two-time offender penalty. The Orioles, Braves, Athletics, Mariners, Marlins, Rockies and Cubs would have triggered the tank tax once.

If the rule was in place, it likely would have given several of those teams the incentive to win more. The Orioles, Reds, Rockies, Marlins and A’s all finished with 68 or 69 wins in one of their "tank tax" triggering seasons.

Teams would still rebuild with a tank tax in place, and some would be ensnared by the penalties. But if you want to creative incentives for teams in the baseball to try harder, it's a pretty simple tweak that could spur teams to win more now while still focusing on the future.

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