As a follow up to this morning post on major league salaries falling as a percent of revenue, I want to look at ways to increase player salaries as the collective bargaining agreement talks commence.

There are changes to the CBA that can raise the salary level. One way would be to greatly increase the pay for players at the low end. In the last CBA, minimum pay went up 16%, from $327,000 in 2006 to $380,000 in 2007. The minimum will be $410,000 in 2011. Given the run up in revenue over this time, a hike to a minimum salary of $800,000 seems reasonable to me. According to the Biz of Baseball Salary Database, 369 player earned less than $800,000 in 2010. They totaled about $165.6 million in salary. If the minimum salary were $800,000, MLB would have added about $130 million in salary, which would have raised the percentage of MLB salaries about 2%. So a doubling of the league minimum moves salaries percentage in the right direction.

It strikes me that large market teams would buy into this, so the dollars they send to poorer teams get used on salary rather than going into owners’ pockets.

A second change to the CBA which I believe would raise salaries a bit would be the elimination of service time as the standard for arbitration and free agent eligibility. When arbitration first came into existence, a player needed three years of service time to qualify. Teams, however, quickly moved to keep players in the minors until they could not earn a full year of service time in a season. This allowed teams to get four years out of a youngster before they faced arbitration. Eventually, the union won super-two status for players who were in the majors for most of three seasons, but they still needed to wait until they accumulated six years of service time to become free agents. Basically, a team willing to give up a couple of months of a prospect’s time in the majors can control someone for seven years.

I propose the rule gets changed to honor the original spirit of the idea. Use the season as the basis for both arbitration and free agency. The first call-up prior to September, or the second September call-up starts the arbitration clock. That first qualified call-up counts as one season, even if the player is only in the majors for one day. This will take away any need for GMs to manipulate the arbitration clock. Once the clock starts, any call-up to the majors in a season counts as another year. After three seasons, the player goes to arbitration. After six seasons, he may become a free agent.

I suspect this will be a tougher sell to ownership than the minimum salary. The MLBPA could compromise on just the arbitration years, leaving free agency to service time. They could also grandfather the rules, so players coming up in 2011 would have to play by the old arbitration clock. Have to believe that GMs would like this rule, at least for arbitration, since it makes the decision about bring a good players to the majors easier.

The union should also propose to do away with the luxury tax. This was put into place to slow salary growth, and given the data it most certainly worked. The luxury tax serves as a salary cap, that only the Yankees violate on a regular basis. It’s a reason for owners not to go hog wild on salaries. It may be a big reason why a team other than the Yankees hasn’t tried to buy a championship in recent years. Even if the MLBPA can’t completely remove the luxury tax, they should at least try to put it much higher than the current level.

The current incentives in revenue sharing are wrong. Poor performance is rewarded, as we see teams like the Pirates making a lot of money. Maybe something as simple as decreasing revenue shared every consecutive season a team finishes below .500 would do the trick. For example, let’s say Team X plays poorly one year, does poorly at the gate, and receives a $30 million transfer from successful clubs. If they play poorly the next year, they would get 25% of what they would qualify for if this was their first poor year. If they reach .500 one year, the clock resets. Throwing good money after bad year after year just doesn’t seem to be good for the game in general, not just the players.

I also believe there is something the union can do outside of the CBA that might help move salaries up. They can discourage back-ended long-term contracts for youngsters. I’ll use Evan Longoria’s contract as an example. Note that Evan’s contract is structured to pay him as if he were playing every season on a one-year contract. He earned less than $1 million in each of his first three years, then he gets four big raises (he would have been a super two). Note that Evan will earn $2 million in 2011, in what would have been his first year of arbitration. Evan probably would have been worth at least twice that in arbitration. If his $18 million had been spread out evenly over his six years, Evan would be earning $3 million this season. Since arbitration is based on players in the same class, getting Evan as high a number as possible in his first year helps out every one else who is compared to Longoria. So many players signing long term contracts young, and structured to keep their arbitration comparison numbers low, hurts everyone else who goes to arbitration. I don’t think players would buy into waiting to sign a long term deal. Lifetime security at a young age is just too good a deal. Flat contracts, however, could push arbitration numbers up a bit.

I’m interested to hear your ideas on the subject.