So my Harmony Grove team will need a 3rd baseman next year as Diaz doesnt qualify anymore.  My Camden team is putting Arenado and Machado on C as they come off A5 contracts.  Doesnt really make sense, or seem fair, that my Harmony Grove team is restricted from two of the better defensive 3rd basemen in the game just because they are too expensive, no longer A players, and my Camden team is rebuilding.

I thought the new(er) rule that two team managers couldnt make the first bid on either teams players was put in place to fix the low end concern.

Travis -- Great point.  I guess the best answer is why does the league already have a rule stating, "Trades may not be made, directly or indirectly, between teams owned by the same manager"?

This rule is in place even though it is potentially "unfair" to the two teams because of the potential for abuse and the appearance of creating an unfair advantage (even if any particular trade would be completely fair).

Travis et al -- in "theory" the live auction would be a transparent market. 

The problem is that an ideal market assumes that all buyers have equal incentives.  If everyone had one team, then the costs is the same for all participants.  In this case, owners with two teams have a lower cost for each bid because they also benefit from the sale of the player.

Or...  consider if the Owner is not trying to compete with both teams.  The second team can be used to pump up bids by creating  a false sense of competition to manipulate the price up; for no other reason. Basically, the live auction does not reflect the rue market value; the player goes for more than the fair market value price of the item. 

This becomes pretty obvious when the bidding is almost closed and a sham bidder swoops in to make a single bid -- driving the price up a bit with a high degree of confidence that a buyer who just outlasted the serious bidders will go higher at least once more.  This is a common scam -- illegal under federal and most state law -- and is why, for example, on Ebay you are not allowed to bid directly or indirectly in your own auctions.  Here is an article about a lawyer who was disbarred for the practice, for example.

In looking for a compromise designed to help align incentives and still permit free movement of players: would you support a proposal that would allow bids on players owned by the same owner, but add a $40 "transaction fee" if a team unsuccessfully bids on a player from a team owned by the same owner?

My personal feeling is that a full ban would be appropriate.  If for no other reason than stopping the (reasonable) concern about and at least appearance of conflicts of interest.

I would also support the "transaction fee" concept.

I think part of what Josh is trying to get at is exactly true.  Two team owners will, regardless of whether they try to or not, operate with more knowledge than everyone else on their player's auction.  They will know the price at which they would let the player go, but also whether they planned to go after another player from the other team they own later on, which would effectively lower the bid being made.  The way the rule is currently stated, a two-team owner can't bid on a player until someone makes a bid, which would raise the price at least $40K if their second team does not take the player.

I also think Travis is right in that ARBA really hasn't seen anything egregious either.  I believe in the example, EGR opened the bidding to $480K (hence Tom's "preemptive" remark), no one else placed a bid (despite Mudville's encouragement attempt, similar to what many of us do during some point of the auction), Rishi had budgeted up to $500K for Castellanos (who was the first player in the auction), and I believe Rishi placed a single bid at $500K.  (My final comment in Josh's example was sarcastic, but certainly meant to call attention to this rule that I had tried to push to be revised last year, since I foresaw the controversy the rule creates and would be highlighted by two cash-rich teams with a single owner.  I certainly did not intend to "rig" the system, especially given the stakes was just an extra $20K in profits to Mudville, less than 0.1% of their cash on hand at that time.)  Rishi hoped to win Castellanos (they needed an OF, especially given Renfroe was in the C auction and would likely leave the team, and Castellanos was decent first player in the auction), but given that Castellanos was the first player in the auction, they needed to rigidly stick to their budget, too.  Therefore, if EGR out bid them, they would let him go (which is what happened).  Rishi's bid was within the rules at the time, but it is important to note Rishi did not force EGR into a bidding war.

If we want to discuss the spirit of the rule, let me ask the following question: if Rishi and EGR did get into a bidding war with both making multiple bids for Castellanos and eventually Rishi bowed out, but EGR ended up paying $600K or $700K for him, would that be any different?  (Rishi certainly could have bid much higher with the knowledge that Mudville was going to try to bid on Renfroe later on to replace Castellanos.)  I would think that situation is much more the situation Josh's eBay example is trying to get at.  It is also much more the situation we would want to avoid.  While I don't believe the situation has ever really happened, I believe there are a few rule change options to preemptively combat this possible situation:

1. Force the second-team to win the auction.
2. Make the second-team give their best-and-final bid as their first bid.  If we want, we can have them denote it with an asterisk in the bid (ex. $500K*) so that everyone knows its a best-and-final.
3. Add a transaction fee.
4. Ban the second-team from making any bids on the owner's first-team's auctions.

In my opinion, #1 would effectively destroy a second-team's budget.  Mudville (who could easily bid anyone's remaining budget) would be much too happy to run someone to bankruptcy in this scenario as they would just bid $20K below the team's remaining amount forcing them to pay out all they had, since Mudville knows the second-team must win the auction.  Obviously, this not a good choice and I would not support such an option (I merely put it in this discussion to explore all options).

#2 is an interesting option if we wanted to still allow owners with two-teams to bid on their auctions.  In fact, #2 would allow second-teams to make opening bids on players as everyone would know they could top that bid and the player is theirs (assuming the rest of the league does not try for the player as well).  I believe Option #2 was what happened in the example with EGR and Rishi.  Certainly someone can still move assets around between teams if the league doesn't choose to beat their price, but about half of the transaction's money would be lost in the process.  I am fine with this option.

Option #3 needs to be developed more.  Would the fee be attached to all non-winning bids of the second-team or is it just one fee per auction player?  Should both the first-team and second-team of the owner be fined?  Who gets the fee?  Does it get lost to the dark depths of ARBA, the winning team, or the selling team?  How much should the fee cost?  I personally think it should be a fee attached to all non-winning bids of the second-team not just once per player.  Additionally, I think the fee needs to be higher than the amount of two standard bid increases ($40K).  I would push for something more in the $60-80K range.  I also think the fee should be lost to dark depths of ARBA.  I do believe both of the owner's teams should be fined as well, if not, one team gets hurt while the other team gets rewarded.  I would consider this option, but it needs more definition from the group first.

Option #4, similar to Option #2, is a clean and easy way to deal with this scenario.  Banning any bidding between same owner teams would be simple on Tom and Eric as they run the auction, but I also think ARBA has owners that will not try to sneak around Option #2.  Overall, I am fine with Option #4 as well.

After writing this, I think Option #2 is actually my favorite.  Let the second-teams make a best-and-final offer and if someone else wants the player more, let them outbid them.  I would be fine (and might even prefer) them to make an opening bid on a player though I would like to see it written in a way that allows them to not have to make the first offer either.

I don't believe it fair to deny two-team owners from bidding on their second-team FA's.  If we really believe there is a problem with those owners bidding up their second-team FA's to increase the money they get in return, then decrease the money they get in return for losing that FA.  For example, the two-team owner gets the standard return on losing any player with a winning bid under 300.  For any player with a winning bid over 300, they get a set amount in return regardless of the amount of the winning bid.

This could also motivate the two-team owner to trade those players before rosters are due, thereby slightly reducing the number of FA's in the pool.

It appears to me that an "outright ban" is the wrong solution because (A) several people think its unfair and (B) its not responsive to the actual problem.  I'm not seeing any sentiment that its a problem for (to use my own teams as an example) Sewell to buy a player from Springfield in the auction.  Sewell had to outbid everyone else to get the player and Springfield is only getting 10K more than they would if Sewell hadn't made that last bid.  If its not a problem why ban it?  

The problem - if you agree that there is one - is when Sewell makes the second highest bid on a player owned by Springfield.  The team that got the player would have gotten the player regardless but ends up paying more to Springfield than if Sewell hadn't bid.  So a "transaction fee" imposed in this situation is at least a response to the actual (perceived) problem.    

I would argue that if there's going to be a transaction fee at all it should be relatively modest and only imposed one time per player that I am bidding on.  One transaction fee of 40K would be enough to prevent Sewell from bidding on a Springfield player unless Sewell was serious (though they might not get him).  More than one, and you are creating some of the same imbalance in incentives that Josh started this thread wanting to prevent.  Say, for example, that the bidding on a Springfield player peters out at 550K but Sewell is willing to go as far as 800K. Sewell's worst case scenario is to make several bids, pay several transaction fees, and still not get the player.  So instead of bidding in 20K increments Sewell jumps all the way from 550 to 800 so that they only risk one transaction fee.  But number one, its not remotely what a one-owner team with the same agenda would have done, and number two, it is exactly the kind of thing I would do if I didn't actually care about Sewell and was just trying to move money from Sewell to Springfield.    

If the majority of the league votes for a transaction fee, that's fine, but I would like to point out that if we do that, then nobody can fairly accuse anyone of "puffing" ever again.  If this transaction fee exists then it would make no sense for Sewell to participate in the early bidding on a Springfield player.  They won't risk a transaction fee by bidding on this player until they have to, which is when everyone else is done bidding and Tom is saying "going once".  So, if they do bid at that point, you can't accuse Sewell of "puffing," because we made a rule that made it irrational for Sewell to do anything other than what looks like "puffing."  

I thought the transaction fee was only assessed if the team ended up not winning the player?

Good catch, Travis:

Here is a Proposed Rule, starting with the upcoming C auction:

if an owner owns multiple teams, and such owner wishes to bid on a C player on such owners other team, the following applies: the owner shall announce that the C player is on the owner's other team while making the initial bid and the bidding team shall be assessed a single $40 transaction fee if the bidding team is does not have the highest bid.

I dont believe everyone in ARBA thinks this actually happens, so I think Joshs goal is a soft compromise that actually has a chance at being passed.  But I dont want to speak for Josh.