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Tuesday, June 05, 2012

Dayn Perry: The Blue Jays, Anthony Alford and baseball’s lost opportunity

Baseball and football so often compete for the same prep talents. Sometimes you have a John Elway, who chooses football. Sometimes you have a Joe Mauer, who goes with baseball. And sometimes you have a Bo Jackson or a Deion Sanders, who find the time and physical reserves for both sports. Most often, though, it’s an either-or proposition for the amateur talent. Recent events, though, could cause the balance to shift.

Football, you may have heard, is entering what figures to be a long period of upheaval, and that upheaval will almost certainly lead to sweeping change or the demise of the sport as a major entity. Because of the unfolding head-trauma epidemic—whether the single, transformative blow or the countless sub-concussive impacts endured by players—more and more parents are forbidding their sons to play. As a consequence, football is at its most vulnerable at the lower levels. Therein lies the opportunity for organized baseball.

While baseball can appeal to the young athlete’s sense of self-preservation (however muted such instincts tend to be within teenagers) by pointing to the fact that a life in baseball is orders of magnitude less harmful and diminishing than a life in football, cash is what really matters. Now, though, MLB, by punishing those teams who exceed slot money, is limiting the ability of its teams to compete not only with one another but also with organized football.

In the case of the Blue Jays and their selection of Alford, it’s almost certain they won’t be able to buy him out of his football commitment. It’s possible, of course, that he’s a Drew Henson-style, two-sport “flop in waiting,” but it’s also possible there’s a future All-Star within. We’ll likely never know.

The larger issue is that baseball, given football’s fraught state, has a chance to reestablish a cultural foothold at the lower levels. In some cases, growing fears over football’s dangers will be enough, but in other cases it’s a business decision. So never mind that baseball’s parity “problems,” which the hard-slotting system is designed to address, have always been an illusion. Forget that the new system really hurts baseball’s underclass teams. Then ignore that healthy competition among teams for young players is a good thing. Focus, instead, on that business element.

JE (Jason) Posted: June 05, 2012 at 05:33 PM | 45 comment(s) Login to Bookmark
  Tags: blue jays, college, draft

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   1. Matt Clement of Alexandria Posted: June 05, 2012 at 06:32 PM (#4149177)
Dayn is right. Draft slotting is bad for baseball.
   2. Randy Jones Posted: June 05, 2012 at 06:45 PM (#4149185)
But it's good for the owners(in the short term), as it will end up cutting their costs. Which is all they care about.
   3. Bruce Markusen Posted: June 05, 2012 at 07:42 PM (#4149235)
Baseball will still get good athletes and good players. Count me among those who doesn't see a big problem in college and high school players getting lesser sums of money. Every player drafted carries risk; there are no guarantees that any drafted player will make the major leagues, or ever come close to becoming a star.
   4. Joe Kehoskie Posted: June 05, 2012 at 09:46 PM (#4149297)
Now, though, MLB, by punishing those teams who exceed slot money, is limiting the ability of its teams to compete not only with one another but also with organized football.

I don't understand this line of thinking. MLB offers players like Anthony Alford an opportunity to turn pro and become millionaires at age 17 or 18 in a sport with a dramatically lower risk of serious, life-altering injury, while the NFL forces such kids to play a minimum of three years of college football, at great risk of injury, before its teams are allowed to offer even $1. But somehow it's MLB that needs to sweeten the pot even further?

I also don't understand the logic behind paying the 36th-best player in the draft (as ranked by BA) as if he's an elite player, just because he happens to play football. If some 15th-round pick from Yale is worth $10,000 to the Padres and $100,000 to Goldman Sachs, the player doesn't suddenly become worth $100,000 to the Padres. The same is true if "Goldman Sachs" is replaced with "Southern Miss" or "N.Y. Jets."

The whole concept of "buying a player away" from football or basketball has always been foolish. Either Anthony Alford is worth millions as a baseball player or not, but the football angle has nothing to do with it.
   5. Kiko Sakata Posted: June 05, 2012 at 09:58 PM (#4149303)
Either Anthony Alford is worth millions as a baseball player or not, but the football angle has nothing to do with it.


Well, it has something to do with it. In an ideal negotiation, you want to offer $1 more than the other side's next-best option. If Alford's not worth "millions as a baseball player" then obviously you don't offer him that much no matter what the alternative is, but if he's worth "millions as a baseball player" but also "millions as a football player", it's reasonable to think he'll cost you more than a kid whose next-best option is studying refrigerator repair at the local community college (with all due respect to refrigerator repairmen; they're just less well-paid than NFL players).
   6. Joe Kehoskie Posted: June 05, 2012 at 10:13 PM (#4149319)
If Alford's not worth "millions as a baseball player" then obviously you don't offer him that much no matter what the alternative is, but if he's worth "millions as a baseball player" but also "millions as a football player", it's reasonable to think he'll cost you more than a kid whose next-best option is studying refrigerator repair at the local community college

Understood, but the "millions as a football player" is both pure speculation and a minimum of three years away. (After some quick Googling, it seems Alford was rated as around the tenth-best HS QB in the 2012 class. That probably makes him an NFL prospect for 2015 or '16, but he probably shouldn't be spending his NFL earnings just yet, either.)

Regardless, if the quoted part is the standard, then MLB teams are being overly generous in the draft rather than miserly. For example, what are Carlos Correa's options? Play four years at the U. of Miami and then head to the Mexican League or Japan? What about Kevin Gausman or Mark Appel?
   7. Johnny Slick Posted: June 05, 2012 at 10:27 PM (#4149348)
Yeah, I'm not getting the argument there. The guy's cost is whatever the market will bear for him. If that cost is less than his worth as a pitcher in baseball, baseball can turn him down or otherwise try to negotiate (or not, given the new draft rules) but in most cases the player's worth to baseball is far, far more than what they're trying to get away with paying him right now.
   8. Zipperholes Posted: June 05, 2012 at 10:31 PM (#4149357)
Understood, but the "millions as a football player" is both pure speculation and a minimum of three years away. (After some quick Googling, it seems Alford was rated as around the tenth-best HS QB in the 2012 class. That probably makes him an NFL prospect for 2015 or '16, but he probably shouldn't be spending his NFL earnings just yet, either.)
Alford's actual football prospects are irrelevant. What matters is his perceived football prospects. And even setting aside football, he may value highly the option to play baseball at Southern Miss and get drafted higher in a couple years.
   9. Joe Kehoskie Posted: June 05, 2012 at 10:48 PM (#4149375)
but in most cases the player's worth to baseball is far, far more than what they're trying to get away with paying him right now.

There's no way the average draft pick is worth "far, far more" than he's offered. The average draft pick never plays a day in MLB. At most, the top 20 or so players probably get less in the draft, but there assuredly wouldn't be bidding wars for the 50th- or 100th-best player in the draft just as there aren't bidding wars for the 50th-best ML FA or 50th-best international FA.

Alford's actual football prospects are irrelevant. What matters is his perceived football prospects.

No, what matters is his perceived baseball ability/value. His football ability, for which he can't receive NFL compensation for at least three years, is little more than a bright, shiny distraction.
   10. Zipperholes Posted: June 05, 2012 at 11:13 PM (#4149422)
No, what matters is his perceived baseball ability/value. His football ability, for which he can't receive NFL compensation for at least three years, is little more than a bright, shiny distraction.
The value of his baseball ability has to be weighed against his other options when determining how much to offer him.

Let's say the Blue Jays have two draft picks, each of whom they calculate to be worth $1M over their cost-controlled years. One has the option to play QB at Southern Miss, and believes he will make millions in the NFL four years from now. The other can't get into college; his only other job prospect is as a refrigerator repair man. Of course, they shouldn't offer either more than $1M. But they should offer the football player more than the refrigerator repair man. So, yes, Alford's perception of his football ability is absolutely relevant to what the Blue Jays should offer him.
   11. Joe Kehoskie Posted: June 05, 2012 at 11:22 PM (#4149441)
Of course, they shouldn't offer either more than $1M. But they should offer the football player more than the refrigerator repair man. So, yes, Alford's perception of his football ability is absolutely relevant to what the Blue Jays should offer him.

The overwhelming majority of baseball draft picks are akin to your "refrigerator repairman," but that doesn't stop MLB teams from offering and paying huge signing bonuses.

I don't know much about football, but it appears that Alford is a slightly better baseball prospect (36th-best in the draft, per BA) than football prospect (10th-best QB in class of 2012), while not being a truly elite talent in either sport (i.e., a top-five pick). However, based on media reports, Alford is much more interested in playing football. If his perception of his future NFL prospects is out of whack, then the prudent course of action for TOR is to walk away rather than to try to "buy him away" from football.
   12. Zipperholes Posted: June 05, 2012 at 11:40 PM (#4149467)
The overwhelming majority of baseball draft picks are akin to your "refrigerator repairman," but that doesn't stop MLB teams from offering and paying huge signing bonuses.
The big signing bonuses usually go to guys who aren't akin to the refrigerator repairman--they're HS seniors with offers to play at top colleges, or college players who haven't exhausted their eligibility.
I don't know much about football, but it appears that Alford is a slightly better baseball prospect (36th-best in the draft, per BA) than football prospect (10th-best QB in class of 2012), while not being a truly elite talent in either sport (i.e., a top-five pick). If his perception of his future NFL prospects is out of whack, then the prudent course of action for TOR is to walk away rather than try to "buy him away" from football.
If he's willing to accept a bonus which, no matter how high, is less than the value that the Blue Jays think he'll bring to their club, they shouldn't walk away. If he won't sign for less, sure, they should.
   13. Joe Kehoskie Posted: June 05, 2012 at 11:49 PM (#4149474)
The big signing bonuses usually go to guys who aren't akin to the refrigerator repairman--they're HS seniors with offers to play at top colleges, or college players who haven't exhausted their eligibility.

And then what are their options after college? To get drafted by MLB again, or to play in Japan, Mexico, or the indy leagues. MLB essentially enjoys monopsony power over them.

If he's willing to accept a bonus which, no matter how high, is less than the value that the Blue Jays think he'll bring to their club, they shouldn't walk away. If he won't sign for less, sure, they should.

Agreed. I guess this would be a more interesting debate if we were talking about a Bo Jackson type rather than Alford, who's undoubtedly a great athlete but apparently grades out as a second-rounder in a weak MLB draft.
   14. Zipperholes Posted: June 05, 2012 at 11:59 PM (#4149476)
And then what are their options after college? To get drafted by MLB again, or to play in Japan, Mexico, or the indy leagues. MLB essentially enjoys monopsony power over them.
Yes, to potentially get drafted by another team. It's not about MLB having monopsony power over them. It's about what power the drafting team has over them.
   15. Joe Kehoskie Posted: June 06, 2012 at 12:09 AM (#4149478)
Yes, to potentially get drafted by another team. It's not about MLB having monopsony power over them. It's about what power the drafting team has over them.

Well, putting aside possible non-monetary considerations such as geographical preferences (e.g., playing in Los Angeles vs. Pittsburgh), even the cheapest MLB team is going to offer a draft pick far more than Japan, Mexico, or the indy leagues.
   16. Dock Ellis on Acid Posted: June 06, 2012 at 12:39 AM (#4149488)
There are also circumstances where the player has a bit more power than usual in negotiations. The player refuses to play for a shitty team like the 1998 Phillies unless it's REALLY worth his while (JD Drew)*, or the player is already well off and it takes more money to make it attractive to him (Josh Bell).

*I know Drew didn't sign with the Phillies but what if they gave him the 10M? We may have seen the draft changes a lot sooner.
   17. Walt Davis Posted: June 06, 2012 at 02:32 AM (#4149512)
players like Anthony Alford an opportunity to turn pro and become millionaires at age 17 or 18

If I read the article right, Alford was picked in the 3rd round. His bonus is (effectively) capped at something well below $1 M. That's the "problem".

But I mostly agree with Joe K. The one that's hurt here is the player more than the team. The player has almost no leverage to increase the team's offer. "Give me $1.2 M or I go to USM" doesn't work if the Jays respond "sorry, we're not allowed to offer you that much, the most we can offer is $X."

But doesn't the NFL have a slotting system too?

With the new rules, what happens if they offer him a major-league contract? Probably a bad idea for a HSer anyway but are the Jays prevented from offering him a 6/$5 M ML contract (if they wanted to)?

But, yes, Joe I think you can say the "average" draft pick is underpaid relative to value. The Pirates pretty much blew everybody else out of the water spending $49 M over the last 4 drafts. But that only requires 9 WAR combined (at today's prices) in their first 3 years of service to break even on that. (OK, maybe 10-11 WAR after you factor in 3 years of min salary). Zach Duke (2001) provided 5.3 WAR all by himself. Add another 3 for Chris Shelton and another 4 or so for Rajai Davis and that's more than enough WAR in one draft to cover $49 M spent over 4 years. And that was a "bad" draft in that they grabbed JVB 1st overall and then didn't sign the two best players (Drew and Guthrie). Their 2002 draft wasn't very good either but still produced Nyjer Morgan (6.5 WAR pre-arb) and Matt Capps (5 WAR).

Most teams spend a few million but even if a draft only produces 2 WAR pre-arb, that's $10 M in value.

And it works that way in large part because of what you noted -- monopsony power. The kid's got almost no choice so how in the world could he possibly extract "fair value" for his potential worth?

   18. Swedish Chef Posted: June 06, 2012 at 07:18 AM (#4149553)
With the new rules, what happens if they offer him a major-league contract?

That's not allowed anymore.
   19. Joe Kehoskie Posted: June 06, 2012 at 10:41 AM (#4149667)
If I read the article right, Alford was picked in the 3rd round. His bonus is (effectively) capped at something well below $1 M. That's the "problem".

Right. My point above was that Alford was rated as the 36th-best player in the draft and presumably would have been drafted thereabouts — and been offered a seven-figure bonus — if he had indicated an interest in playing professional baseball. But his apparent lack of interest in MLB and/or unrealistic price tag caused him to slide to No. 112.

But doesn't the NFL have a slotting system too?

I believe the NFL has more of a de facto slotting system than an actual one, but the NBA and NHL (?) have had slotting for years. I haven't seen anyone suggest that two decades of slotting in the NBA has driven players away from basketball and toward baseball, so I'm not sure why so many pundits are convinced baseball's new system will drive players away from baseball.

Kids play the sports they like to play, not the sports that have the most long-term financial upside for them. (Anthony Alford is just the latest example of this.) Otherwise, millions of American kids wouldn't be playing soccer or lacrosse or running track, and great 5-foot-10 high school athletes would be playing baseball instead of point guard or wide receiver.

If MLB wants to get more of the Anthony Alfords, it needs to get them at age 7 and 10, not try to "buy" them at age 18.

But, yes, Joe I think you can say the "average" draft pick is underpaid relative to value. The Pirates pretty much blew everybody else out of the water spending $49 M over the last 4 drafts. But that only requires 9 WAR combined (at today's prices) in their first 3 years of service to break even on that. (OK, maybe 10-11 WAR after you factor in 3 years of min salary).

It's probably more like 18 or 20 WAR, after you add up the tens of millions spent on scouts and minor league affiliates. The real cost of most draft picks far exceeds their bonus number. But I agree that a lot of draft picks are underpaid relative to value, especially high first rounders.
   20. Matt Clement of Alexandria Posted: June 06, 2012 at 10:58 AM (#4149689)
Kids play the sports they like to play, not the sports that have the most long-term financial upside for them. (Anthony Alford is just the latest example of this.) Otherwise, millions of American kids wouldn't be playing soccer or lacrosse or running track, and great 5-foot-10 high school athletes would be playing baseball instead of point guard or wide receiver.

If MLB wants to get more of the Anthony Alfords, it needs to get them at age 7 and 10, not try to "buy" them at age 18.
I don't see why this has to be either/or. Baseball should be building its popularity among kids, and making sure high-level youth ball is available to any skilled teenager who wants to play. Baseball should also give its teams the freedom to buy any kid who prefers football away from that game if they want to meet his price.

There's no upside to the slotting system. I guess, maybe, someday the draft could become a competitive balance issue, but it clearly isn't one right now.

I don't see the new draft system as an apocalyptic error. For the most part, it'll work out fine. Baseball's doing great. But I think baseball would be doing marginally great-er if they didn't limit the capacity of teams to acquire the best amateur talent.
   21. Joe Kehoskie Posted: June 06, 2012 at 11:20 AM (#4149707)
Baseball should also give its teams the freedom to buy any kid who prefers football away from that game if they want to meet his price.

Teams do have this freedom. Nothing was stopping any team from drafting Alford in R1 and offering him millions of dollars. All the new system does is make it more difficult for players and/or teams to game the system.

If players aren't drafted and compensated according to ability, there's really no sense in having a draft at all.

But I think baseball would be doing marginally great-er if they didn't limit the capacity of teams to acquire the best amateur talent.

Anthony Alford could have been a millionaire in MLB but apparently prefers to play college football. Meanwhile, the NFL can't offer even $1 to Alford until 2015 or 2016. It seems like a major stretch to suggest MLB is hurting itself in any way by losing an occasional kid like Alford. No one suggests the NFL is being hurt by its system, which is the most restrictive and draconian in U.S. professional sports.
   22. Matt Clement of Alexandria Posted: June 06, 2012 at 11:23 AM (#4149714)
It seems like a major stretch to suggest MLB is hurting itself in any way by losing an occasional kid like Alford.
I don't see why. It seems entirely obvious that occasionally losing talent hurts the game. Maybe not more than marginally, but it hurts the game. There is no upside whatsoever, and a small downside. It's dumb.
If players aren't drafted and compensated according to ability, there's really no sense in having a draft at all.
There's a huge gap between a non-rigidly-slotted draft and a pure free agent system. The Yankees and Red Sox were never going to get their hands on Bryce Harper or Trevor Bauer or Dustin Ackley, and those guys all got paid way below what they'd make on the open market. I don't think that a draft becomes senseless if it isn't rigidly slotted.
   23. Joe Kehoskie Posted: June 06, 2012 at 11:41 AM (#4149740)
I don't see why. It seems entirely obvious that occasionally losing talent hurts the game. Maybe not more than marginally, but it hurts the game. There is no upside whatsoever, and a small downside. It's dumb.

It depends on the price of the talent. I just don't see the logic behind paying the 36th-best player in the draft as if he was the third-best player in the draft just to keep him from playing football — especially when his football value is entirely theoretical anyway (i.e., 3-4 years down the road).

There's a huge gap between a non-rigidly-slotted draft and a pure free agent system. [...] I don't think that a draft becomes senseless if it isn't rigidly slotted.

I agree. I didn't mean to suggest the draft was senseless unless every player was rigidly selected according to his OFP number. I'm just saying that a draft that has the 36th-best player slide to No. 112 but then get paid like the No. 3 is a draft that's severely broken.

Imagine the same type of thing happening in the ML FA market. If Jose Contreras was the 36th-best ML FA but he got the third-biggest FA contract because of some outside offer or interest (NBA offer, record deal, whatever), people would go nuts. But in an odd and relatively recent development, whenever amateur talent is involved these days, normal market and business principles go out the window and people become spendthrifts.
   24. Matt Clement of Alexandria Posted: June 06, 2012 at 11:58 AM (#4149755)
I just don't see the logic behind paying the 36th-best player in the draft as if he was the third-best player in the draft just to keep him from playing football — especially when his football value is entirely theoretical anyway (i.e., 3-4 years down the road).
I was under the impression that Alford was looking for a bonus more in the 10-15 range ($2-3M or so), but I can find nothing on the googles to confirm either way.

Anyway, the logic is (a) maybe a club thinks that BA has Alford valued wrong and sees him as a top 10 or top 20 talent, and (b) the draft massively underpays top talent, so if you think a guy is a top talent, you can pay him well beyond "slot" and still be making a good signing.
But in an odd and relatively recent development, whenever amateur talent is involved these days, normal market and business principles go out the window and people become spendthrifts.
Market principles went out the window when the draft was established. Under a market, Bryce Harper would get $50M out of high school. When a guy comes along who has more leverage than a typical prospect - perhaps because he's willing to forego baseball for another sport - market pricing comes back into play, and teams may up their offers toward a guy's probable value on a hypothetical open market, rather than only offering the far less generous monopsony price they usually do. I think the business principles hold up pretty well.
   25. Joe Kehoskie Posted: June 06, 2012 at 12:45 PM (#4149817)
When a guy comes along who has more leverage than a typical prospect - perhaps because he's willing to forego baseball for another sport

But that's not really leverage. Alford's only true leverage is his baseball ability. As soon as his price tag exceeds the perceived value of his baseball ability, the prudent move is to walk away, even if that means baseball "loses" him to football.

Now, it's possible that Alford should have been a top-five or top-ten pick, but the industry seemed to have him at No. 36 in a weak draft and then allowed him to slide to No. 112. Even if we grant that the top draft picks are underpaid, I doubt anyone would argue that the No. 36 pick should be paid like the No. 3 pick. A bonus scale like that would probably triple or quadruple draft spending.
   26. Matt Clement of Alexandria Posted: June 06, 2012 at 01:00 PM (#4149837)
But that's not really leverage. Alford's only true leverage is his baseball ability.
Of course it's leverage. In a monopsony labor market, the ability to walk away is some of the best leverage you have. In a monopsony labor market, you need leverage in order to get value for your talents - otherwise you'll usually be wildly underpaid compared to a more free market.

If Alford demands a bonus beyond what Toronto sees as his value, they shouldn't sign him. No one disputes that.

What I dispute is your claim that this has been happening regularly, that teams have been foolishly overpaying for amateur talent. I suggest that the monopsony set-up of the draft creates a situation where most top prospects are seriously underpaid, and the occasional prospect who earns an atypically large bonus is usually just doing a better job of leveraging their talents to get money, not hoodwinking the club. I dispute the characterization that "business principles" have gone "out the window".
   27. Joe Kehoskie Posted: June 06, 2012 at 01:47 PM (#4149898)
Of course it's leverage. In a monopsony labor market, the ability to walk away is some of the best leverage you have. In a monopsony labor market, you need leverage in order to get value for your talents - otherwise you'll usually be wildly underpaid compared to a more free market.

Simply not true. A player's leverage = his ability. A 20th-round pick who has a $100,000 job offer from Goldman Sachs doesn't suddenly become worth $100,000 as a baseball player.

If the quoted text is true for players who have the ability to walk away, then why isn't the reverse true for players with no or limited options? What explains Carlos Correa getting $5M, or Aaron Crow getting $3M out of an independent league? MLB made them multimillionaires despite the fact MLB was their only real option.

What I dispute is your claim that this has been happening regularly, that teams have been foolishly overpaying for amateur talent. [...] I dispute the characterization that "business principles" have gone "out the window".

Of course business principles have gone out the window. MLB enjoys monopsony power over amateur players the world over, yet pays huge bonuses to a huge number of players every year who won't play one game in MLB. Guys like Carlos Correa and Kevin Gausman will have more money in the bank by July than dozens of actual MLB players, many of whom have three or four full years of service time.
   28. Der-K and the statistical werewolves. Posted: June 06, 2012 at 02:12 PM (#4149943)
And in return, players' rights and salaries are largely under team control for years, regardless of how well they play. Teams win in aggregate.

Joe, would you argue that teams should control a player's rights in perpetuity upon drafting? That would lead to some of the outcomes you're suggesting...
   29. Joe Kehoskie Posted: June 06, 2012 at 03:07 PM (#4150012)
And in return, players' rights and salaries are largely under team control for years, regardless of how well they play. Teams win in aggregate.

Right. I don't dispute this. I'm simply disputing what seems to be a growing chorus of people lamenting MLB's treatment of amateur players, or claiming the owners are "going cheap," etc.

Every year, MLB makes millionaires out of dozens of young men who will never play a single game in MLB. This same model doesn't exist anywhere else in the business, sports, or entertainment worlds, whether we're talking about hotshot MBAs heading to Wall Street, or the NFL or NBA drafts, or up-and-coming singers or actors.

Joe, would you argue that teams should control a player's rights in perpetuity upon drafting? That would lead to some of the outcomes you're suggesting...

I'm not sure I follow. I'm not arguing for draconian anti-player measures. I just believe MLB's compensation system is severely out of whack when kids like Correa and Gausman have more money in the bank on Day 1 than actual MLB players often have after three or four years of ML service.

If I was an MLB player, I'd be pushing to double or triple the ML minimum while agreeing to slash entry-level bonuses (draft, int'l) by half or two-thirds. CBA after CBA, I'm always astonished there's no real push for this.
   30. Der-K and the statistical werewolves. Posted: June 06, 2012 at 03:22 PM (#4150028)
I just believe MLB's compensation system is severely out of whack when kids like Correa and Gausman have more money in the bank on Day 1 than actual MLB players often have after three or four years of ML service.

But those are the players were MLB is most likely to eventually earn "surplus value" from - I'm okay with it (in the "moral" sense).

As for...
Joe, would you argue that teams should control a player's rights in perpetuity upon drafting? That would lead to some of the outcomes you're suggesting...

that dealt with "why do individual teams offer top picks so much?" (which I thought you were asking) The answer being - because if they don't, another MLB team will in time (given that other teams aren't realistic competitors). If that was taken away as a possibility through lifetime draft right control, well, bonuses would come down real quick-like ... but that would present new problems.
[I mean this irrespective of being pro-/anti- player.]

Now, as for the idea that players would be well served (at least financially) to enrich their own position (through higher minimum salaries, etc...) by taking away from the amateur signing pools - sure, I've argued this too.
   31. Zipperholes Posted: June 06, 2012 at 03:38 PM (#4150046)
If the quoted text is true for players who have the ability to walk away, then why isn't the reverse true for players with no or limited options? What explains Carlos Correa getting $5M, or Aaron Crow getting $3M out of an independent league? MLB made them multimillionaires despite the fact MLB was their only real option.
Why do you keep saying MLB is their only real option? MLB isn't the one hiring Correa. The Houston Astros are. Correa has the option to go the University of Miami. He has leverage, in that he can turn down the Astros and return to the draft in three years. The more attractive one's options are, the more leverage he has, and the more you should be willing to offer him.

But, as we agreed above: it needs to be less than the revenue you think he will bring in.
   32. Joe Kehoskie Posted: June 06, 2012 at 04:50 PM (#4150123)
Why do you keep saying MLB is their only real option? MLB isn't the one hiring Correa. The Houston Astros are.

MLB has monopsony power over Correa in a general sense, and the Astros have monopsony power over Correa in a specific sense, at least until June 2013. (Obviously, the signing deadline is in July 2012, but Correa's next chance to sign an MLB contract wouldn't come until June 2013 at the earliest.)

The reason I say business principles have gone out the window with the draft is because MLB has almost total control over the global amateur baseball market but still finds itself making millionaires out of players who don't make it out of A-ball.

Correa has the option to go the University of Miami. He has leverage, in that he can turn down the Astros and return to the draft in three years. The more attractive one's options are, the more leverage he has, and the more you should be willing to offer him.

Every player has the option to return to the draft again next year. That's not leverage in any real sense.

The only reason players like Correa have come to expect millions of dollars is because MLB teams have foolishly been paying it. If MLB teams had the sense to band together, for a single year, the landscape would be much different. If the No. 1 pick in the draft suddenly got $500,000 instead of $7 million, what would happen? Would Correa go off to college and then go work on Wall Street just to spite MLB? Would Gausman or Zimmer? Of course not. It's laughable on its face.

The last 20 years of draft history tell us that, given the choice between a big check and sitting in a classroom for 3 years, 98 players out of a hundred will take the check. This idea, peddled by "experts," that a 10 or 20 percent reduction in signing bonus money would suddenly result in players heading to college en masse is just silly.
   33. Zipperholes Posted: June 06, 2012 at 05:15 PM (#4150142)
The reason I say business principles have gone out the window with the draft is because MLB has almost total control over the global amateur baseball market but still finds itself making millionaires out of players who don't make it out of A-ball.
That MLB has almost total control over the global amateur baseball market isn't very relevant to what the Astros should pay him. Even assuming his only career options right now are in pro baseball--and realistically, therefore, with an MLB organization, the Astros are competing with 29 other teams for his services.
The only reason players like Correa have come to expect millions of dollars is because MLB teams have foolishly been paying it. If MLB teams had the sense to band together, for a single year, the landscape would be much different. If the No. 1 pick in the draft suddenly got $500,000 instead of $7 million, what would happen?
That would be illegal. And yes, collusion by employers keeps wages down. I don't see how that says anything about proper salaries in a non-collusive market.
The last 20 years of draft history tell us that, given the choice between a big check and sitting in a classroom for 3 years, 98 players out of a hundred will take the check. This idea, peddled by "experts," that a 10 or 20 percent reduction in signing bonus money would suddenly result in players heading to college en masse is just silly.
The Blue Jays don't care whether players would head to college en masse. They care about whether Anthony Alford would.
   34. Joe Kehoskie Posted: June 06, 2012 at 06:28 PM (#4150186)
Even assuming his only career options right now are in pro baseball--and realistically, therefore, with an MLB organization, the Astros are competing with 29 other teams for his services.

How are the Astros competing with 29 other teams? The Astros drafted Correa and have what amounts to exclusive control over him until June 2013. The only way the Astros are competing with 29 other teams is if we suspend disbelief and pretend that Correa would spurn a $2M bonus check, head off to college for anywhere from one to four years, and then reenter the draft. Twenty years of draft history tells us there's maybe a 1-in-50 chance that Correa would make such a decision.

That would be illegal. And yes, collusion by employers keeps wages down. I don't see how that says anything about proper salaries in a non-collusive market.

I'm not making a moral argument here; I'm making a business argument. (And the draft is "collusive" by definition.)

The Blue Jays don't care whether players would head to college en masse. They care about whether Anthony Alford would.

Right, but instead of holding the line on an occasional Anthony Alford, the industry started spending like drunken sailors, to the point that Stetson Allie gets $2,500,000 to flame out in A-ball and people just shrug. Nowhere else in business, sports, or entertainment does such a spending model exist.
   35. Zipperholes Posted: June 06, 2012 at 06:57 PM (#4150200)
How are the Astros competing with 29 other teams? The Astros drafted Correa and have what amounts to exclusive control over him until June 2013. The only way the Astros are competing with 29 other teams is if we suspend disbelief and pretend that Correa would spurn a $2M bonus check, head off to college for anywhere from one to four years, and then reenter the draft. Twenty years of draft history tells us there's maybe a 1-in-50 chance that Correa would make such a decision.
I'm not arguing whether the Astros could sign Correa for less money. I'm disputing your utilization of the argument that MLB has near total control over his career options. It's about what power the Astros have over him, not MLB.
I'm not making a moral argument here; I'm making a business argument. (And the draft is "collusive" by definition.)
Yes, and an argument that if employers were to engage in collusion (yes, the draft is "collusive," but I'm talking about the outright collusion you gave in your example), then salaries would go down, says absolutely nothing about the business wisdom of salaries in the current system.
Right, but instead of holding the line on an occasional Anthony Alford, the industry started spending like drunken sailors, to the point that Stetson Allie gets $2,500,000 to flame out in A-ball and people just shrug. Nowhere else in business, sports, or entertainment does such a spending model exist.
It's a case-by-case analysis. You keep talking about trends in the industry. That's a conversation ripe for debate, but it's irrelevant to what the Blue Jays should do with Alford or what the Astros should do with Correa. It may be true that Pirates screwed up in their scouting of Allie or were incompetent in the bonus negotations, but that's on them.
   36. Joe Kehoskie Posted: June 08, 2012 at 02:32 PM (#4151833)
35 — My point is that, given the high attrition rate of prospects in the first place, MLB can survive the loss of a few Anthony Alfords per year without the sport (or even teams) suffering any discernible impact. A smart business/industry would hold the line on the occasional drafted player who makes an outsized bonus demand rather than cave in and reset the market for all players. This is especially true for players in the non-elite category, such as a player rated No. 36 in a very weak draft.

Anyway, our long international nightmare is over. Jim Callis is reporting that Alford will be signing with the Blue Jays for between $450,000 and $800,000, with the Jays allowing him to continue playing football. (The wisdom of the latter is debatable, but I'll leave that for another time.) Once again, the "signability" business went right out the window as soon as a kid was presented with a very large check.
   37. BDC Posted: June 08, 2012 at 02:49 PM (#4151854)
This is an interesting thread – I think it highlights a central disconnect for me in the whole draft system, which I have learned to think through via such threads as these. I tend to agree with MCoA. The system works well on aggregate for the teams. They get a supply of talent and pay less than they'd have to in a free market. And they really can look at it on aggregate; so many millions in, so much playing value out.

For an individual player, though, the dynamic is hugely imbalanced, and it's hard to think sensibly about it. Somebody is offering to make you pretty well off before you've done anything, at a point when you may never do anything, but they're also bidding on many others like you, so it seems as if your unexpressed talent actually has a specific market value, instead of being just the midpoint of a highly variable estimate of your aggregate contribution to team WAR over the next decade.

The absolute can't-miss talents are an exception, probably, as several have said, and have pretty solidly projectable value; but not even all of them pan out, or pan out predictably.
   38. Dan Posted: June 08, 2012 at 03:00 PM (#4151869)
Anyway, our long international nightmare is over. Jim Callis is reporting that Alford will be signing with the Blue Jays for between $450,000 and $800,000, with the Jays allowing him to continue playing football. (The wisdom of the latter is debatable, but I'll leave that for another time.) Once again, the "signability" business went right out the window as soon as a kid was presented with a very large check.


You think paying him and allowing him to also go play college football isn't a concession due to his leverage and due to signability concerns? The Blue Jays just decided to agree to that because they wanted to be nice?
   39. Der-K and the statistical werewolves. Posted: June 08, 2012 at 03:07 PM (#4151874)
Inclined to agree with 38.

Also as for...
The only way the Astros are competing with 29 other teams is if we suspend disbelief and pretend that Correa would spurn a $2M bonus check, head off to college for anywhere from one to four years, and then reenter the draft. Twenty years of draft history tells us there's maybe a 1-in-50 chance that Correa would make such a decision.

It depends on what Correa and team think the market will look like in 1-4 years; will bonuses shrink, rise, hold steady over that time? Also, I bet there's a tendency for the player to overvalue how they'll be regarded in the future - few predict much of a chance that they'll implode over that time.
So, if you're talking halfing, cutting by two-thirds, etc... bonuses - and it's not being done unilaterally by all clubs - then I'm pretty sure 1-in-50 seriously understates the number of guys who'll wait to sign.
   40. Joe Kehoskie Posted: June 08, 2012 at 03:28 PM (#4151891)
Some of you guys seem to have a draft form of Stockholm syndrome: You've heard the word "signability" so much that it seems like a real issue, when it's mostly nonsense. History has shown us that 98 percent of high picks over the past decade or more have signed an MLB contract (and several of the ones who didn't sign had medical issues discovered post-draft). In all but the rarest of cases, the incessant talk about "signability" is, and always has been, silly.

On Tuesday, Anthony Alford was an example of how "broken" the new draft rules are, and how MLB was "hurting itself," etc., etc. Now, just three days later, Alford has agreed to terms with Toronto for well over $1,000,000 less than he could have gotten if he simply went at No. 36. How any of this bolsters the signability or leverage theories is beyond me. Like 98 percent of the high draft picks before him, Alford was offered a big check and he took it. This should be surprising to no one.

It depends on what Correa and team think the market will look like in 1-4 years; will bonuses shrink, rise, hold steady over that time? Also, I bet there's a tendency for the player to overvalue how they'll be regarded in the future - few predict much of a chance that they'll implode over that time.
So, if you're talking halfing, cutting by two-thirds, etc... bonuses - and it's not being done unilaterally by all clubs - then I'm pretty sure 1-in-50 seriously understates the number of guys who'll wait to sign.

There's no sense going in circles, but I doubt there would have been more than a 5 percent chance that Correa would have gone to college if the Astros held the line at $3 million or $3.5 million. Rational people simply don't turn down retirement money at age 17 because they might be worth more a year or two or three down the road.

How many times would Aaron Crow have gone back in the draft if the drafting teams had held the line? If Alford's (or Correa's) ability to go to college is "leverage," then what explains Aaron Crow getting millions as an indy leaguer?
   41. Der-K and the statistical werewolves. Posted: June 08, 2012 at 03:45 PM (#4151899)
No one is saying that guys won't sign for very large checks. The question is how large does it have to be...

Also,
Like 98 percent of the high draft picks before him
there is, of course, some self-selection here. Teams are less likely to tab a guy that early if they don't think he'll sign for what they're willing to pay.
   42. Der-K and the statistical werewolves. Posted: June 08, 2012 at 03:49 PM (#4151902)
Didn't see your edit:
but I doubt there would have been more than a 5 percent chance that Correa would have gone to college if the Astros held the line at $3 million or $3.5 million.

Might be true, though part of what happened here presumably stemmed from Correa agreeing pre-draft. If you come in too low and nobody agrees to the predraft deal, do you draft one of them anyway?
At $2M (a price you mentioned earlier), I'd up the odds considerably.

How many times would Aaron Crow have gone back in the draft if the drafting teams had held the line?
I think this is a better example, for the reason you cite. The catch is that you need more than just one or two teams to be hardliners ... if only one squad tries to slash bonuses like this, players (not all, but a number of them) will feel insulted and not sign, will wait a year and not grant re-draft consent.
   43. Joe Kehoskie Posted: June 08, 2012 at 04:50 PM (#4151942)
The catch is that you need more than just one or two teams to be hardliners ...

Right, although I believe individual teams could go the hardline route and still get the player 95 times out of a hundred.

I just find it interesting that an industry that repeatedly colluded against actual ML free agents, and an industry that collectively said, "No, thanks," to Barry Bonds when he was basically offering to play for free a few years ago, can't control itself for even one year when it comes to drafted amateur players.
   44. Dock Ellis on Acid Posted: June 08, 2012 at 05:07 PM (#4151948)
Per mlb.com Anthony Alford will be playing both baseball and football.
   45. Der-K and the statistical werewolves. Posted: June 08, 2012 at 08:20 PM (#4152075)
While I'm more than willing to argue this point in circles yet again - I'd like some clarification: which picks are we talking about? A lot of HS kids will have some floor based on how they value spending some time in college that shouldn't move much no matter how we pay draftees. At the top of the draft - guys will eventually sign if everyone colludes - many less will if their club is offering, say, a third of what they think their market value is (given that they can wait a year). You could argue that almost everyone will sign anyway but there's no history of a team trying this (playing a real hard line) to base your opinion on and, I'd argue, there's good reasons for that...

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