Before this year, the MLB Amateur Draft was a free for all. There were slot recommendations, but that's all they were: recommendations. If you exceeded slot, your only punishment would be a stern talking to by the commissioner's office. Many teams threw the recommendations to the wind, and drafted the best players where they deserved to be taken instead of going with "signable" picks just to make the commissioner's office happy. Remember back in a rather non-descript 2002 draft, when the Pirates took Bryan Bullington #1 overall, and BJ Upton went #2 to the Rays? Bullington got a $4 million bonus while Upton got $4.6 million. Bullington never threw a pitch in the majors, while Upton is a solid starter on the Rays. In a more recent example, the Pirates went with catcher Tony Sanchez fourth overall in 2009, because Sanchez signed for just $2.5 million, a quarter million under slot. Four players taken after Sanchez got higher bonuses, including Shelby Miller of the Cardinals at #19 overall, the top prospect in the organization. Sanchez ranked seventh in the Pirates organization, behind Gerrit Cole, Jameson Taillon, and Josh Bell, all of whom got at least twice the bonus of Sanchez.
But now, the MLB is going away from slot "recommendations" and is strictly enforcing caps on draft spending. Each pick a team has in the first ten rounds is given a value, and the teams cannot exceed that contract value for all of the picks in the first ten rounds it signs. If you don't sign a pick, you lose that value from your pool. Here's a list of each team's budget for the draft. We'll go back to our example of the Pirates, who drafted Stanford pitcher Mark Appel yesterday, one of the top names in the draft.
The slot for the eighth overall pick, which is where Appel, was drafted is $2.9 million. The Pirates don't have to give Appel $2.9 million. Hell, they have $6.56 million available to play with in the first ten rounds. But if they give Appel a $5 million bonus (which seems about right, given his status), they'd have just $1.56 million to sign their other ten picks over the first ten rounds, including #45 overall Barrett Barnes, whose slot recommendation is $1.136 million. Keep in mind, this is even below what Appel is looking for, as he turned down $6 million from the Astros before the draft. Do you see the problem here? If a great player falls out of the first couple of picks (as happened with Appel or Lucas Giolito, drafted by the Nationals at #16 overall), the team who took them has to either A) lowball them to stay in slot and draft appropriately the rest of the way, or B) give them a solid money offer, and essentially waste the rest of their draft picks on guys who would be considered overdrafts.
In the 2011 draft, teams combined to spend $228 million on bonuses, or an average of $7.6 million per team. This year, just eight teams have a budget of more than that $7.6 million. Only four of those eight teams spent above that $7.6 million last year. The Houston Astros, who chose Carlos Correa #1 overall this year with a slot value of $7 million, spent just $5.54 million last year. The Twins chose Byron Buxton #2 overall, with a slot value of $6.2 million, and they only spent $5.9 million last year.
Because a team has rolled the dice in drafts, like the Pirates or Nationals, they're essentially getting punished for doing that more in the future. If a top tier talent like Appel or Giolito follow to your spot in the draft, MLB is essentially prodding you to pass on the player, with the caveat that if you do choose the player, the bonus it will take to sign that player will either thrust you into penalty territory, or it will result in the rest of your draft being littered with low upside talent.
I thought baseball's big problem was with trying to get young talent to gravitate towards the game as opposed to towards basketball or football. When you're telling a high school kid like Giolito "take it or leave it" with a lowball offer...what message does that send towards potential pros in the future? Bubba Starling had a full-ride scholarship to the University of Nebraska to play football, and he would gave gone. The Royals threw $7.5 million at Starling to get him to commit to baseball. This year, the Royals had the same #5 pick, and the slot was $3.5 million, and the Royals overall draft budget was $6.1 million for ten picks. If the Royals slashed Starling's bonus by 33%, and signed their other ten picks to the absolute minimum of $100,000, they would have stayed under budget. But at the same time, if they only offered Starling $5 million, would he even have taken the offer?
Major League Baseball, as well as the players union, has ventured down a very dangerous road by enacting budgets for the draft. Speaking of the budgets, I never bothered to mention the penalties.
-If a team exceeds their budget by up to 5%, they'll be taxed 75% on the overages
-If a team exceeds their budget by up to 10%, they'll be taxed 75% on the overages AND they will lose next season's first round pick
-If a team exceeds their budget by up to 15%, they'll be taxed 100% on the overages AND they will lose next season's first AND second round picks
-If a team exceeds their budget by more than 15%, they'll be taxed 100% on the overages AND they will lose their first round pick for the next two seasons.
Now, what does this realistically mean? If the Pirates want to give Appel a $5 million bonus and sign all of their other picks to the slot value, they'll have spent $8.663 million, or 32% over their budget. Goodbye first round (and probably top ten) picks in 2013 and 2014! To top things off, their overage of $2.1 million will be doubled to $4.2 million when you figure in the tax, giving them a total spent of $10.763 million...which is over $6 million less than they spent in 2011...and they won't have a first round pick for the next two years. HOW DOES THIS MAKE ANY SENSE!?!?!?!
Futhermore, those picks that teams lose for exceeding the cap? They'll be given to teams that *don't* exceed the cap in a lottery, with the odds being based on the record of the previous season as well as team revenue. So, bad teams that play ball with the commissioner's office will get rewarded.
The 2012 Draft is the first one of a new era, an era where the league and the player's union would rather that teams throw money at overpriced veteran free agents as opposed to potential young building blocks. Yep...that sounds about right. As much as I love this game, I'd love for 2/3 of the teams to completely destroy this new system and continue to spend at will. Imagine, a first round where cheap, bad teams have four picks. I'm sure that's Bud's ultimate dream.
Photo courtesy of Daylife.com
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