In the latest Weekly Wright Report:
Something to Moo About on Opening Day
There is a lot to be excited about on the field for the Baltimore Orioles on Opening Day. O’s fans should be aware that part of this excitement stems from a new Major League Baseball (“MLB”) rule that rewards teams for the successful performance of top prospects who begin the season on the major league roster.
The Rule. In the 2022 offseason, MLB and the Players Association reached a new collective bargaining agreement. One of the issues surrounding the negotiations was players’ perception that many teams were intentionally not calling their best prospects up to the big leagues as soon as they were ready in an effort to gain an additional cost-controlled season of their top prospects’ careers. The sides agreed to what is known as the Prospect Promotion Incentive (“PPI”) to address this issue.
Under the PPI, teams can earn an additional draft pick if:
- A prospect is included on a preseason Top-100 prospect list by two or more of Baseball America, ESPN.com or MLB.com; and
- That player is on the Opening Day roster or earns 172 days of service time; and
- That player wins the Rookie of the Year award or finishes in the top three of the MVP or Cy Young voting in any season prior to qualifying for arbitration (typically first three).
The 2023 Scorecard. 2023 was a great year for the Orange and Black here, as Gunnar Henderson’s Rookie of the Year campaign last year netted the Orioles the #32 pick in the 2024 draft. The impact of that asset can be seen in the Orioles recent trade for ace pitcher Corbin Burnes, a trade that included the #34 overall pick in the 2024 draft that was likely easier to stomach parting with by acquiring the additional PPI selection. One negative for the Orioles in this area was pitcher Grayson Rodriguez falling short of 172 days of service even though he made his major league debut in the first week of last season. Were Rodriguez to finish top three in Cy Young voting in the next few seasons, the Orioles would not be eligible for a PPI pick.
The 2024 Outlook. This offseason, the Orioles have 5 prospects that satisfied the first criterion. The name to follow for Orioles fans as of right now is Colton Cowser, who has made the Opening Day roster. If Cowser wins the 2024 Rookie of the Year award, the Orioles would net another draft pick in the 2025 MLB Draft.
What has drawn more interest in Baltimore is the reported omission of consensus overall #1 prospect Jackson Holliday from the Opening Day roster. There is a small chance that Holliday could still qualify for the incentive, but the Orioles would need to call him up within about 15 days of the regular season starting to still have that chance to take advantage of the PPI program. In Holliday’s case, securing PPI eligibility would be so opportunistic because Holliday is the caliber of player where even were he to miss out on the 2024 Rookie of the Year award, it is not inconceivable that he could place in the top three of MVP voting before becoming arbitration eligible whereas a player like Cowser is more likely to only have a chance to net the Orioles a selection based on his rookie season.
While this decision has led many Orioles diehards to believe they are engaging in that practice of squeezing an extra cost-controlled season out of a young star’s career (which is furthered in this scenario by Holliday’s representation being super-agent Scott Boras), that strategy would be mooted by a long term extension for Holliday and that strategy comes with inherent risk too. The PPI program also awards an additional year of service to a player for a Top 2 finish in the Rookie of the Year balloting, which is exactly what happened to Orioles catcher Adley Rutschman after his brilliant rookie season that started after his May debut. Were Holliday to be promoted to the big leagues on a similar timeframe and excel, any potential benefit long term benefit to the club could be wiped out anyway.
Looking ahead to 2025. The Orioles may also need to make some interesting call-up decisions this season on their other PPI-eligible prospects. Sluggers Heston Kjerstad and Coby Mayo will start the season in Triple-A but an early season call up where they stick on the roster would likely negate any 2025 eligibility for a PPI draft pick based on winning Rookie of the Year. 19-year old phenom catcher Samuel Basallo will start in Double-A, but a continued meteoric rise could push his name into contention for a callup late in the season while remaining PPI eligible for 2025 similar to Gunnar Henderson’s 2022 call up.
Over the past five years, the Orioles’ farm system has become widely regarded as the best in baseball. As that success translates into more wins at the Major League level and thus lower draft picks, the PPI rule, managed shrewdly, will provide a mechanism for keeping the pipeline stocked.
For your sports law or employer strategic decision-making needs, please email me at ehealy@wcslaw.com.