Angels and Devils

How Los Angeles Angels Owner Arte Moreno exploited baseball's ridiculous rules

Dear readers,

Happy almost Labor Day! We here at Southpaw hope that you take the weekend to get outside, do something fun with friends, and take in the last gasps of summer before fall comes crashing down on us all. (Just kidding — it’s going to be sweltering until December.)

This week, in honor of the holiday, we’ve got a little something for you about the MLB’s new collective bargaining agreement. Hope you enjoy, as always.

-Ian and Calder

P.S. We’d be neglecting our most sacred Southpaw duties if we didn’t draw your attention at the outset to this new gem. Watch it and weep.

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On Wednesday, various baseball insiders reporters that the Los Angeles Angels were putting six players on the waiver wire: Lucas Giolito, Reynaldo López, Randal Grichuk, Matt Moore, Dominic Leone, and Hunter Renfroe. 

If you are unfamiliar with the inner workings of MLB’s transaction system or with the Los Angeles Angels, the previous sentence is probably unintelligible to you. But hang with us as we explain why that news is important — and not just for Angels fans or baseball fans.

Baseball’s trade deadline — the last day in the season that a team can trade a player for another player — is August 1. But due to a quirk of the rules, players are eligible to play in the MLB postseason with a given team so long as they’re on that team’s roster by September 1. Usually, this discrepancy doesn’t matter: After the August 1 trade deadline has passed, a team has no real reason to give a good player away to another team for free. At least, not until the 2023 Los Angeles Angels came around. 

A little context about that team. The Angels employ the best baseball player in the world, Shohei Ohtani, who is in the midst of one of the greatest seasons of all time. Other than Ohtani, they’re not very good, but through the strength of his skills Ohtani managed to drag the team close enough to playoff contention by August 1 that they decided to trade some of their up-and-coming prospects in order to buy some veteran players who, they hoped, could help them make the postseason this year.

Disaster promptly struck. The Angels went on a losing streak that nuked their playoff hopes, and then Ohtani — who is both a pitcher and a hitter — tore a major ligament in his arm, which ended his season as a pitcher. So, the Angels found themselves with a roster of fairly expensive veterans and no chance of making the playoffs. In response, they agreed to give six of them away for nothing other than salary relief — thus, the news this week that the team had placed six players on the waiver wire (five of six were claimed; Grichuk was not claimed and is still with the Angels). 

For the intrepid readers who are still with us, let us tell you what all of this means.

The bottom line is this: Major League Baseball’s new collective bargaining agreement, ratified last year, is rewarding the Angels for giving up. By dumping its expensive players, the Angels attempted to lower their overall payroll under something called the “luxury tax threshold” — which means that if Ohtani leaves the team in free agency, the team will get a better draft pick. Some version of this dynamic exists in all sports: the worst teams get the best draft picks so they can eventually compete with the best teams. But in this case, the specific regulations that the Angels are exploiting aren’t about competitive parity — they’re about ensuring that MLB’s owners can cheap out whenever they want. 

The logic behind penalizing teams that carry a payroll over a certain dollar amount — the aforementioned “luxury tax” — is that doing so will create parity among big-market and small-market teams, leading to a fairer league and more competitive baseball games. In the most recent CBA, the league and the union agreed to raise the penalties for teams that exceed the threshold. That’s a good thing in theory, but in practice, the new luxury tax creates more incentives for the owners of mid-sized teams to be as cheap as possible — or, at the very least, it gives license to their pre-existing inclination to be as cheap as possible. In the process, it screws over players by depressing their salaries and by encouraging more quick moves between teams. 

Just look at the Angels. Four of the six players that the Angels placed on the waiver were acquired last month. If we had to bet, we’d wager that the team’s brass knew exactly what they were doing: they almost certainly told team owner Arte Moreno that if the month of August didn’t go well, he could salary dumb these players, get under the tax, and be no worse for it. The players, in turn, were led to believe that they’d be in Los Angeles through the end of the year at least, and then they were summarily shipped away within a month. 

The hilarious twist in all of this is that Moreno’s salary dump failed. Because Grichuk went unclaimed, the Angels are still ever so slightly above the luxury tax threshold, meaning they’ll get a worse draft pick if Ohtani leaves and if they exceed the tax again next year, the financial penalties on the franchise will be greater.

We’re still coming to understand all of the downstream effects of the new CBA, which was, on the whole, a salutary development. But this week made clear once again just how cheap MLB’s owners are, and just how much MLB Commissioner Rob Manfred wants to reward that cheapness. 

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