Time to change free-agent compensation
River Ave. Blues makes some good suggestions for improving the way teams are compensated for losing free agents. However, I would argue that compensation should be eliminated. The point of free agency was to allow the players to move wherever they wanted. The compensation system came into being as a way to thwart free-agency, which we can see clearly this year in the case of Jason Varitek. Teams have six years to use the stars they develop at below cost. Why do they need more? Make free agents truly free!
Well, not exactly. From the perspective of the owners, the point of free agency was to avoid getting hauled into court and being forced to pay many millions of dollars in damages. From the perspective of the players, the point of free agency was to make as much money as possible and stick it to the owners. There wasn't any grand principle involved (there rarely is), which we know because Marvin Miller was afraid the owners would adopt Charlie Finley's suggestion to make every player free, every year. Which would have flooded the market with players every winter and thus (theoretically, at least) depressed prices.
It's been 30 years, and I'm not sure original intent really means anything. All that really matters is whether or not the system makes sense today. It doesn't, in part because of the arcane system used to classify free agents. It's always hard for the owners and the players to agree on anything, but this is something they should work on the next time around.