Just based on the sound of their names, I'm glad the Jays ended up with Norris over Beede. Which is a silly way of judging things, of course, but given how little we know about these guys at this point of their careers, it's all I've got to hang my hat on. I mean, Beede? Sounds like the Jays had Twiki announcing their picks.

“They ended up getting to $2.5 million, but that still wasn’t what we valued the Vanderbilt education at.

Someone's really unclear about the value of a Vanderbilt education, and/or the ability to still get one at age 26 if the whole MLB thing doesn't work out.

About a week before the draft, I had Norris pegged as a top 15 pick, and Beede as a supplemental pick. I don't think the difference between them is huge, and I'd rather have Norris.

Of course, I'd rather have both.

Someone's really unclear about the value of a Vanderbilt education, and/or the ability to still get one at age 26 if the whole MLB thing doesn't work out.

Well it's not only a Vanderbilt education, it's that plus an 80% chance at a $9 million signing bonus in 2014.

The native of Massachusetts will instead attend Vanderbilt University in the fall and is not eligible to re-enter the Draft until 2014.

I thought draft picks who don't sign often go back into the draft the following year?

So, of their seven picks in the top 78, they signed six?

In that case, I can live with Beede getting away.

Yes, it would have been much cooler if his first name was Adam.

They ended up getting to $2.5 million, but that still wasn’t what we valued the Vanderbilt education at

I'm always intrigued by this kind of calculus. Every year there seems to be some draft pick that figures it this way – though often one suspects it's a matter of pride; "Adam Beede" or whoever has been told by his advisors all along that he's a $3.5M guy easily, and $2.5M comes to seem an insult. The Vanderbilt "cost of attendance" is about $60K a year at the moment, so a four-year full ride is going to be at least a quarter of a million dollars. In other words, their math is off by roughly a power of ten. The "value" of a Vanderbilt education, in this case, has to partially include the value of having the college experience as a young person with your age peers, and the concomitant networking for life that one does at a prestigious school. Otherwise, you could invest your baseball earnings and even if you wash out of the minors, head to U-Mass in a few years' time and get a great education, way more than paid for, enough left over to send several people through law school or an MBA program.

That's assuming that talk of the "value of a Vanderbilt education" isn't a disingenuous way of expressing sour grapes.

If players like this are secretly thinking, hey, I'll pwn the SEC for a few years and parlay this Vanderbilt thing into a $5M bonus, they ought to be taken to the gambling thread and have a few things explained to them.

Edit: Some lemon for Snapper's Coke

Not only that, but if you graph out the draft picks with their draft position along the x-axis and how much they signed for on the y-axis, Beede would have been a pretty noticeable spike if he signed for what the Jays offered him, never mind how much he was asking for. I know if I was him, I'd be having second thoughts.

Oh well. Good luck to the guy.

(Nice George Eliot reference in 7.)

The "value" of a Vanderbilt education, in this case, has to partially include the value of having the college experience as a young person with your age peers, and the concomitant networking for life that one does at a prestigious school.
This is exactly what they're talking about. Also, Vandy recruits tend to be costly to sign away, maybe moreso than recruits of any other school (given that there aren't a lot of guys deciding between pro ball and the Ivy League).
Jim Callis (I think it was Callis) has said it would take $5M to sign his kid away from college (note: kid is not a prospect, this talk is in the abstract) and, while I don't know if I'd go that high, I'd place a big $ value on having my kid develop as an adult at school versus as a traveling professional athlete.

I prefer Norris to Beede as well.

In that case, I can live with Beede getting away.
Not only that, but you get a replacement pick next year (in about the same spot). Unless you want to pay through the nose, you've got to be willing to let guys sometimes walk away.

8: Well, that doesn't mean much in and of itself. Norris would be that way and he signed for less than I expected. Now, if you wanted to compare something like pre-draft rank with bonus, that's different.

I thought draft picks who don't sign often go back into the draft the following year?

If you're a high schooler and attend a four year university (like Vanderbilt) you cannot re-enter the draft until your junior season or until you are 21, whichever is first.

He could go to a junior college or indy professional league, and be eligible next year.

Also re: Blue Jays, apparently Jake Eliopolous failed to sign for the third straight year. He is Canada's Matt Harrington.

Eliopoulos: But he still has a very loud website!

Well it's not only a Vanderbilt education, it's that plus an 80% chance at a $9 million signing bonus in 2014.

This seems hugely optimistic.

Someone's really unclear about the value of a Vanderbilt education, and/or the ability to still get one at age 26 if the whole MLB thing doesn't work out.

Somehow, I don't think the scholarship opportunities at Vandy for 26yo former ballplayers are quite as good. Assuming you'd even still get accepted without your athletic thumb on the scale.

And a Vanderbilt education is quite valuable - there is plenty of merit in that statement.

FWIW, the Royals offered Jason Esposito $1.5 million three years ago. He supposedly backed out of a deal and went to Vandy. He signed last night with the Orioles for $600k.

Somehow, I don't think the scholarship opportunities at Vandy for 26yo former ballplayers are quite as good. Assuming you'd even still get accepted without your athletic thumb on the scale.

Speaking as a Vandy reject, (coincidentally enough when I was 26) I agree.

FWIW, the Royals offered Jason Esposito $1.5 million three years ago. He supposedly backed out of a deal and went to Vandy. He signed last night with the Orioles for $600k.

So, when you consider that the value of a Vanderbilt education is about $3.5M, it means that Esposito came out ahead by roughly $2.6M. Smart move by the kid.

This seems hugely optimistic.

This. Turning down a guarantee of $2.5M for the hope of an additional $6.5M in three years is a big bet on your ability and health. It's especially big if you figure that Beebe will likely reach the majors later by taking the college route, since he'll probably require a year or two in the minors after college before reaching the big leagues. That will probably cost him a year or more of free-agent earnings down the road if his bet on his ability/health is correct and he turns out to be a star.

Turning down a guarantee of $2.5M for the hope of an additional $6.5M in three years is a big bet on your ability and health

It also seems to be a big bet that signing bonuses won't be capped with the next CBA.

That extra million is worth holding out for. What could go wrong for a young pitcher in three years? I predict we will never hear from this kid again.

How many players got $9m in this draft? One or two. That 80% number should be about .8%. Maybe Zack was advising the Beede family?

The other aspect of this is that most good baseball players who go to college leave after three years, so they don't end up with a degree. Beede is likely placing his $3.5m value on three years of Vandy education, which education has to be scheduled around baseball travel and practices. It's not easy to get a good education and play on the baseball team.

I say its a 90% chance he leaves after three seasons and it's a 99% chance he gets less money.

erm, i know it's not usual for athletes to actually study in school, but the value of a degree and connections made at a top flight university have to be worth millions as well, right? It seems like a very reasonable hedge to me, especially against 2.5M

Whenever I hear about Vanderbilt, I think of Will Perdue. I imagine an entire school full of tall, awkward people who look like they've just gotten a haircut and will eventually be traded for Dennis Rodman.

I'd like to know what percentage of the people smart enough to be accepted to Vanderbilt would make this same decision. (I bet it's a small number.)

This has nothing to do with this topic but: the biggest mistake I made in my academic career (one of many) was not going to Vandy. (Not said with regret - it was the right choice at the time.)

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I say its a 90% chance he leaves after three seasons and it's a 99% chance he gets less money.
I'd go 90%/80%, but yeah. Having said that, this choice should be about maximizing utility, not income.

erm, i know it's not usual for athletes to actually study in school, but the value of a degree and connections made at a top flight university have to be worth millions as well, right? It seems like a very reasonable hedge to me, especially against 2.5M

Millions? Hard to imagine. Even if the average Vandy grad makes $100G p.a., how much of that is attributable to the Vandy degree? If the same person with a Tenn. degree makes $80G (SWAG) then the Vandy degree is worth $20G p.a., over a 40 year working life, that's about $300G at a 6% discount rate.

To get to $2.5M, you'd have to think the Vandy degree increases his earnings by ~$165G p.a. Highly, highly, highly unlikely.

To get to $2.5M, you'd have to think the Vandy degree increases his earnings by ~$165G p.a. Highly, highly, highly unlikely.

You'd have to think that their salary stays stagnant at 100k to buy that - people get raises that exceed inflation. And 100k really isn't all that much any more - a Vandy man should get past that pretty quickly. You'd also have to think there is no possibility that being hooked into the Vandy alum network with some degree of notoriety is the same as the UT network. Pretty sure I would dispute that. And you have created a false dichotomy - it isn't Vandy v UT, it's Vandy right now vs who will have me at 26.

Geez, before this thread I was feeling ok about not getting into Vanderbilt...thanks a lot.

it isn't Vandy v UT, it's Vandy right now vs who will have me at 26.

But he'd presumably have some of the $2.5 million left with which to pay full ride out of pocket. How many schools, even elite schools, are turning that down these days?

There has to be data on unsigned first and second round draft picks... this seems to be a large gamble.

You'd have to think that their salary stays stagnant at 100k to buy that - people get raises that exceed inflation.

And his raise would have to exceed the raise of a Tenn. gard.

And his raise would have to exceed the raise of a Tenn. gard.

No it wouldn't - snappers computation assumes static real wages for both, and since as I pointed out before, Tenn v Vandy is not the choice here, it's moot anyway.

Yeah, 80% was too high, but my general impression is that college pitchers get a whole lot more money than high school pitchers, and that bonus inflation has been pretty big the last couple years. I was thinking specifically of Cole as a guy who was a 1st round pick out of HS, but went to college and got a lot more money at the end.

Unfortunately there aren't a whole lot of HS pitchers who pass on 1st round money as compareables. Since 2000, I only see 3:

Cole - who was drafted #28 and then #1, passed on a rumored $4mil and signed for $8
Jeremy Sowers - who was drafted #20 and then #6, passed on $1.75* and signed for $2.4
Alan Horne - who was drafted #27 and then in the 30th round and then in the 11th. Passed on $1.6mil, probably got $50k or something.


(Couldn't find a number, but the pitchers drafted around him got around $1.3)

The point is, a guy with the pedigree to be a 1st round pick in HS has a good shot to make his money back if he doesn't get hurt (which is what happened to Horne).

Just based on the sound of their names, I'm glad the Jays ended up with Norris over Beede.

Wouldn't it have been fun to call him The Venerable Beede?

there aren't a whole lot of HS pitchers who pass on 1st round money

One more reported just this morning: Matt Purke, who passed on $4M two years ago and has just signed with the Nationals for $4M.

If we expand it to 2nd round guys, who gave up a lot less to go to college:

Sean Black - drafted #59, redrafted in the 7th. "Slot" was $600k, ultimately signed $150k.
Micah Owings - drafted #50, redrafted in the 19th, redrafted in the 3rd. "Slot" was $800k, signed for $440k.
JP Howell - drafted #52, redrafted in the 1st (#31). "Slot" was $750k, signed for $1mil.
Matt Chico - drafted #61, redrafted in the 3rd. "Slot" was $650k, signed for $365k.
David Taylor - drafted #75, redrafted in the 20th and the 7th. Slot was $550k, likely signed for very little.

Usually a bad move for these guys in dollars, but the difference is a relative pittiance compared to the 1st round guys. All stayed relatively healthy, as far as I can tell. Owings and Chico were redrafted after only 2 years.

Source for the bonus figures is Prospect Watch, which I had never heard of before, but is a pretty amazing resource and even more amazing for being straight out of 1997 (but still updated actively).

I'm amazed that angelfire still exists. Who knew?

And a Vanderbilt education is quite valuable - there is plenty of merit in that statement.

A good college education registers for exactly 5 seconds during an interview. I say this as someone who used to hire for a software company. The prestige of the undergraduate education wears off and is completely gone by the first day that the new hire works. Where one went to college might occasionally come up in conversation, but it has little to do with salary or anything important. College is general training for the workplace, in that it means you're accustomed to being told what to do, showing up on time, etc. What would be better for his long term financial well-being would be to take the $2.5MM and invest it, go to the minors and if he flames out, get a college education and then take a salary and retire fabulously wealthy at 45.

“They ended up getting to $2.5 million, but that still wasn’t what we valued the Vanderbilt education at.

More evidence for the skyrocketing costs of higher education...

No it wouldn't - snappers computation assumes static real wages for both, and since as I pointed out before, Tenn v Vandy is not the choice here, it's moot anyway.

Fine, assume wage growth at inflation (say 3%) so reduce the discount rate from 6% to 3%. The Vandy education would have to increase his annual income by $108,000 to be worth $2.5M.

The comparison is versus Tenn. (or some other large state school). There's no way a guy who can get into Vandy (even with the sports bump) is not going to get into his state univ. in 5-10 years when he can pay full-freight.

There's no conceivable way this is a good economic decision, weighing the odds (it may turn out good if he bucks the odds and stays healthy and effective enough to get a similar or larger bonus in 3 years). I hope he's making the decision based on non-economic factors, otherwise, he screwed up bad.

Financially it's a dumb decision as the upside is limited and the downside huge. He could double his money but that will be very hard to do and losing it all or much of it would seem very easy.

I always think Matt Harrington.

As a parent, I'd tell my kid to take the money, because I understand now that $2.5 mil doesn't come around every day. Flashing back to myself as a high school senior, I may have been torn because going to college seemed like just about the coolest thing in the world at the time. I'm not sure which way to come out on this because my college experience seems invaluable, but the $2.5 mil number kinda makes me really want to drill down on the concept of "invaluable".

One note though, I know nothing of Beede or Vanderbilt, but at my reasonably prestigious university, the athletes generally (a) didn't deserve to be there academically, (b) hung out mainly with other athletes and (c) did not avail themselves of many of the resources that make an education at a university of that caliber so valuable. Obviously there are exceptions, but I'm not sure the educational component of attendance at Vanderbilt is monetized quite as effectively by star athletes as it is by other students.

Flashing back to myself as a high school senior, I may have been torn because going to college seemed like just about the coolest thing in the world at the time.

I'm guessing it would have been way cooler if I was 25 and had $2M in the bank.

take the $2.5MM and invest it, go to the minors and if he flames out, get a college education

I agree with both snapper and this comment by piehole. A Vanderbilt degree will be an invaluable plus if you intend to devote a substantial amount of time to your networking, and if you have a business idea you want bankrolled by all the preppies you intend to meet there à la The Social Network or if you right now as a kid are obsessed with the idea of some day sitting on the Tennessee state supreme court or something like that. Which is unlikely for a lad from Worcester, Mass. And even at that, going to a "flagship" state school isn't useless, either.

There's some small chance that the kid and family both really value a conventional college experience at an exclusive university. In which case, I would hardly argue against that. Again, you can only be a 19-year-old in college with other 19-year-olds right now. Given the rate at which athletes leave school two years later without their degrees, I think that vanishingly few of them truly hold that value, though. (I'm talking pro prospects here, obviously. There are lots of ballplayers at Vanderbilt or Rice or Stanford who know they're never going to play in any major league, and are determined to have a great all-round college experience on scholarship.)

On the other hand if the team sensed the player was a ##### that would grab anything because he was worrying about his future, the $2.5 mill wouldn't be forthcoming. Here's half a million, take it or leave it....

I still think its ridiculous to claim a Vanderbilt education is worth millions. However, I do think there are some things more important than millions of dollars. If Beede grew up in a fairly affluent lifestyle, I can see how $2.5 million may not be worth passing up the chance to experience college as a young person. I can see myself rejecting it, or having my kid reject it, because honestly we have all we need now. A couple million bucks would be fun, but so is college. And if he blows it and never gets offered a million dollar contract, it wouldn't be the worst thing in the world to have him go out and have to earn a living like everyone else.

I think we get tied up too much in this country trying to quantify everything in dollar terms.

I'm guessing it would have been way cooler if I was 25 and had $2M in the bank.

Or 22 with $2M in the bank. If this kid's 18, he should have a good idea by age 22 if he's on the fast track to a big-time MLB career or if he's headed toward journeyman status.

Anyone know what this kid's family background is like? I wonder if he's from a wealthy family or if it's more of a Matt Harrington-type situation, where the family was blue-collar but allowed ego to trump common sense.

I'm not sure why people are framing this a solely an economic decision. Put another way:
"I think we get tied up too much in this country trying to quantify everything in dollar terms."
I'm all for talking about this stuff in dollar terms ... by placing a dollar value on the stuff you're foregoing to play ball. That other stuff is key and not limited to having a piece of paper saying you've graduated (or being 75% of the way there or whatever).

Anyone know what this kid's family background is like?
The dad played pro ball out of high school, didn't make the bigs. Kid transferrred to a prestigious prep school partway through HS, was considered a tough sign going into the draft.
That's all I know.

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One more reported just this morning: Matt Purke, who passed on $4M two years ago and has just signed with the Nationals for $4M.
Purke had a pre-draft deal for $6M (as bonus, as opposed to the 4.x big league deal). That was a weird case.

Sowers didn't want to sign out of HS - he was drafted with the intention of flipping the pick 'til the next year.

Alan Horne got 400K and had turned down 1.6M.

One other thing: it can hurt your negotiating position in the long run, but players arguably have a responsibility to signal to teams their willingness to sign out of HS. (For example, Lincecum floated a price of 1M which was too much for the tiny HS kid with the weird motion and high pitch counts, so he went toward the tail of the draft.)

If you're picked high (suggesting that teams think that you'll be willing to sign) and you don't - I think that's considered a potential flag when you come back out for the draft as a junior (or sophomore). Not a deal breaker, but it doesn't help.

A good college education registers for exactly 5 seconds during an interview.

Wow. As someone who's been in that business for 20 years, I don't think you take my point about value. "Vandy" isn't something you put on your resume, it's so you can call the dad of that walk-on you played with and not have to look at a hiring manager. There is a reason that people who go to elite universities have a better chance at a great career, and it ain't because of the faculty. I see BDC has alluded to this upthread, and I would ask this - if the fear that he will get hurt or not prosper enough to go on comes to pass, don't you think a fellow would you know, take advantages of the opportunity of being at an elite school?

No one seems to have thought about opportunity cost either - if he's a bust at pro baseball for whatever reason, he'll have to start education later, which will certainly lead to lower total lifetime earnings, and certainly with fewer school options, plus having to pay for it, that all have a large negative impact potential to the value and form of his non-baseball career.

Further, you don't get 2.5M. You get 2.5M - agent's fees - income taxes, which would trim that by a non-trivial amount. Folks being what they are, I'd think the fellow might even spend some right off the bat., so that nest egg gets even smaller.

And in any event is he STILL has a great chance to make a lot of money playing baseball. Gaining a hedge, plus an opportunity to make an even bigger bonus vs taking the initial offer is the construct here, with a three year gamble to stay healthy and pitch well.