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Tuesday, June 05, 2012

New Draft Rules Create Confusion, Run On College Seniors

We knew the new draft rules would create some unexpected twists, and the second day of the draft did not disappoint.

The draft rules set up in the new Collective Bargaining Agreement were designed to hold down signing bonuses and get teams to line up their draft boards based more on talent and less on a player’s signability.

On Monday night, that ideal held true. Players were largely picked based on where teams saw them on their draft boards. And while Stanford righthander Mark Appel’s slide added drama, the draft didn’t see a Jacob Turner, Josh Bell or Nick Castellanos-like slide, where a premium talent fell a long way to a team willing to meet his significant asking price. The draft board largely lined up based on talent.

That wasn’t true on Tuesday as the draft wore on, however. It became clear that for many teams, the second half of the top 10 rounds was less about best player available and much more about the best player willing to accept a small bonus.

MLB has come up with a system almost guaranteed to funnel LESS top talent into their ranks.

Well done.

shoewizard Posted: June 05, 2012 at 10:31 PM | 35 comment(s) Login to Bookmark
  Tags: draft, general

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   1. Matt Clement of Alexandria Posted: June 06, 2012 at 08:45 AM (#4149590)
I'm sort of impressed at how many front offices figured out how to game the system in the first year it was implemented.

The rules are dumb, but they save the owners money. So here we are.
   2. Matt Clement of Alexandria Posted: June 06, 2012 at 08:47 AM (#4149593)
The explanation in the article is very clear, I think:
The new draft rules attach a value to each pick in the first 10 rounds. The total of all of those picks is each team's bonus pool for this year's draft. Go over budget and the team pays a tax, and if it goes over by more than 5 percent it starts losing draft picks. Any player selected after the 10th round who signs for more than $100,000 counts against the pool. And if a team doesn't sign a pick in the top 10 rounds, it loses the budget space allotted for that pick.

So teams had to know how to stretch their dollars, but just as importantly, how to make absolutely sure they would sign all of their picks in the first 10 rounds. So while talent was important, finding cheaper players after the first few rounds became even more important. And no draft commodity is cheaper than the college senior.

As an example, the Blue Jays were as aggressive as anyone in the first three rounds of the draft, selecting premium high school talents in Matt Smoral (supplemental first round) and Anthony Alford (third round). Both could have asking prices well beyond their draft slots. But after taking Alford in the third round, Toronto selected seven straight college seniors.

College seniors have little bargaining leverage. If the Blue Jays work out well-below market deals for some or all of those college seniors, they could use the extra money to sign Smoral or Alford. The Blue Jays' total bonus pool is $8,830,800. The seven Blue Jays' picks from the fourth through 10th round carry an allotment of $1.244 million. If the Blue Jays hypothetically signed those seven players for $200,000 total, that would be $1 million that could be used to sign Smoral or Alford.
   3. UCCF Posted: June 06, 2012 at 09:01 AM (#4149599)
So if you're a college senior and you get drafted but refuse to sign, what happens? Do you have to sit out a year and re-enter next year's draft? (I don't see it in TFA.)

I assume undrafted seniors become free to sign with anyone.
   4. philly Posted: June 06, 2012 at 09:20 AM (#4149614)
Teams have the right to sign college seniors until one year until one week prior to the next draft. The July 13th signing deadline does not apply to them.

There is a 100k cap on undrafted free agents. So I guess a college senior that you hope to sign for 20k has some leverage to try to get a team up to 100k, but if he goes unsigned he can never get more than that.

Now that I think about it the fact that college seniors can go beyond the July 13th deadline creates a murky situation. Say you have a slot at 420k and you plan to sign the player for 20k and use the extra for other players. If he doesn't sign on July 13th he is still eligible to sign and so a team still has his entire 420k slot. But can they use it for other players? Let's say they give someone else that 400k and still hope to get the kid signed for 20k. If he doesn't sign, then they don't actually have that extra money. I guess that could be the 5% overage that doesn't lead to a loss of a pick. More likely both sides are heavily incentivized to get a deal done by the deadline.

I don't think it's terribly impressive that teams figured out how to game the system with college seniors. To some extent teams have been doing that in rds 5-10 for years. The key ability to make that happen was that the slots were dramatically increased. Whether they intended it or not, the larger caps created an easy pool of "extra" money to tap into. The initial stories about the pools were hysterical because they missed the fact that the slots were increased so much.

If this system was put into place with the old caps it would have been a much different story. With the higher slots they've reduced and fixed costs somewhat and taken the edge of very aggressive teams like the Sox being able to basically double the value of their draft class or for teams to make single fallers like Porcello or Castellanos huge deals. But the ability to take a several hundred thousand slot and pay a HS kid 1 M is still there as long you move the extra slot money around.

The hysterics about the awful ramifications of the deal always seemed quite overblown to me. Now maybe I'm being sucked in by the fact that the fisr draft class under these new rules is relatively weak and a stronger class will be a different story, but I think in terms of the industry as a whole there won't be any huge negative consequences as a result of the changes.
   5. The kids disappeared, now Der-K has too much candy Posted: June 06, 2012 at 09:48 AM (#4149629)
3. Yes, yes.

UFA's can sign for more than 100K - the overage counts against the team's bonus pool.

The slot increases were significant compared to MLB's previous "guidelines", but the money in aggregate is less than what clubs were actually spending. (as you know, philly, i'm just clarifying)

I do agree that there are unlikely to be huge negative consequences. Baseball will lose some two sport guys, some preps will opt for college, some juniors will stay in school an extra year, and draft results will look goofy in a different way than that they previously did. Not so bad.

   6. RoyalsRetro (AG#1F) Posted: June 06, 2012 at 09:56 AM (#4149636)
Yea, I don't think Jonathan Mayo even needed to show up for a round or two there. They could have just run a loop of him saying "college senior, profiles as a reliever."
   7. philly Posted: June 06, 2012 at 10:09 AM (#4149651)
and draft results will look goofy in a different way than that they previously did. Not so bad.


That's about as good a summation as any.

I have sneaking suspicion that the distortions will be a little less severe than under the old CBA, but we should definitely be in wait and see mode.

BA has a list of the seniors picked in the 1st 10 rds. There were 61 give or take. Unfortunately they don't state how many are usually taken, but it's not zero. And the distribution is interesting.

Tor, Bos, NYY and Tex all took five or more. Was, Cubs and StL took 3. Everybody else was 0-2. I'd guess that those 23 teams didn't alter their distribution all that much. These rules were designed to reign in big market teams (Bos, NY, Cubs) and/or aggressive teams (Was, Tor). So they had to do goofy things and will probably get a little less talent. Whether that's good, bad or disastrous depends on your pov I guess. If some of the other teams end up picking up some of that lost talent, then it's net neutral or close to it for the sport as a whole.
   8. Pops Freshenmeyer Posted: June 06, 2012 at 10:21 AM (#4149656)
If a player is drafted, doesn't sign, and plays in the Mexican League can they be an FA and sign for any amount im MLB?
   9. just plain joe Posted: June 06, 2012 at 11:08 AM (#4149695)
If a player is drafted, doesn't sign, and plays in the Mexican League can they be an FA and sign for any amount im MLB?


I am not 100% sure about this but I don't think so. I'm fairly certain the Mexican League has some sort of agreement with MLB to honor each others' contracts and what not. A player could play in one of the independent leagues for a year and then be a free agent, as did J.D. Drew. Don't take this as gospel though, I'm sure that someone else knows more about this than I do.
   10. Joe Kehoskie Posted: June 06, 2012 at 11:11 AM (#4149700)
#4 really nails it. All the talk of draft armageddon was silly. The idea that players would happily skip college for $2M but would refuse to sign for $1.8M was always nonsensical for probably 98 players out of 100.

The one thing I don't understand is why pundits keep saying things like this:

College seniors have little bargaining leverage. If the Blue Jays work out well-below market deals for some or all of those college seniors, they could use the extra money to sign Smoral or Alford.

Unless I'm missing something, these new rules give substantial additional leverage to college seniors who are drafted from R1 to R10. Smart college seniors will simply wait until the deadline, knowing the deadline doesn't apply to them. I'm sure the vast majority of the drafted seniors up to R10 were pre-draft deals, but those aren't really binding (or legal). If these seniors banded together (or even acted intelligently at the individual level), they could wreak havoc with some teams' strategies. None of that "extra" slot money can safely be spent unless the senior signs first (and for below slot).
   11. SouthSideRyan Posted: June 06, 2012 at 11:17 AM (#4149706)
If these seniors banded together, they could wreak havoc with some teams' strategies. None of that "extra" slot money can safely be spent unless the senior signs first (and for below slot).


But if their respective team spends their money while counting them as a 10K sign, where's the leverage for the senior? They say sign me for X or else you'll lose my entire slot? Well, if we sign you for X, we'll lose most of the money we were saving for overslots anyway, so what's the point? Go pound sand.
   12. RoyalsRetro (AG#1F) Posted: June 06, 2012 at 12:22 PM (#4149792)

If a player is drafted, doesn't sign, and plays in the Mexican League can they be an FA and sign for any amount im MLB?


If you are drafted, a team owns your rights for a year. Then you re-enter the draft. You are subject to the draft every year until you are completely undrafted.

Several players have done something similar to what you suggested - just in an indy league, not the Mexican League. Luke Hochevar, JD Drew, and Aaron Crow are the more notable examples. All had to re-enter the draft.(Drew was not made a FA as #9 suggests, he was drafted by the Cardinals)
   13. Joe Kehoskie Posted: June 06, 2012 at 12:29 PM (#4149801)
But if their respective team spends their money while counting them as a 10K sign, where's the leverage for the senior?

That's the point: The teams really can't spend above-slot money until the below-slot player has signed, or else the team would be in jeopardy of exceeding the spending caps.

They say sign me for X or else you'll lose my entire slot? Well, if we sign you for X, we'll lose most of the money we were saving for overslots anyway, so what's the point? Go pound sand.

I'm not suggesting a senior drafted with a $200,000 slot number has leverage to get the full $200,000. But the new system, by attaching actual values to players/slots, gives seniors far more leverage than they had a year ago, when teams could make "take it or leave it" offers without any adverse consequences.
   14. JJ1986 Posted: June 06, 2012 at 12:34 PM (#4149807)
Luke Hochevar, JD Drew, and Aaron Crow are the more notable examples.


and Matt Harrington.

Travis Lee (and I think 4 others) were declared free agents at one point without having to re-enter the draft, but they closed that route off after that.
   15. Dock Ellis on Acid Posted: June 06, 2012 at 12:51 PM (#4149827)
I'm not sure the Travis Lee situation is applicable/relevant here. Minnesota did not offer him a contract within the required 15 days and was declared a free agent. My understanding was that this sort of thing happened all the time prior to 1996, and Scott Boras was just the first to hold that against them. Did they change the length of a time a contract has to be offered, or did teams just started making sure they offered one within 15 days?
   16. MM1f Posted: June 06, 2012 at 01:14 PM (#4149858)
Unless I'm missing something, these new rules give substantial additional leverage to college seniors who are drafted from R1 to R10. Smart college seniors will simply wait until the deadline, knowing the deadline doesn't apply to them. I'm sure the vast majority of the drafted seniors up to R10 were pre-draft deals, but those aren't really binding (or legal). If these seniors banded together (or even acted intelligently at the individual level), they could wreak havoc with some teams' strategies. None of that "extra" slot money can safely be spent unless the senior signs first (and for below slot).


Most of these seniors just want a chance to play pro baseball. There is the occasional James Ramsey type who is a good enough prospect to have a little negotiating power, but the vast majority of these seniors are nobodies. They are the kind of guys who would have gone in the 25th round last year. Their options are sign now, or never, ever play pro baseball.
   17. RoyalsRetro (AG#1F) Posted: June 06, 2012 at 01:25 PM (#4149875)
Did they change the length of a time a contract has to be offered, or did teams just started making sure they offered one within 15 days?


The rule was amended to give teams a warning if they didn't submit a contract within 15 days, and a 15 day window of submitting a contract after that warning.
   18. DL from MN Posted: June 06, 2012 at 01:27 PM (#4149877)
Here's my takeaway from the new draft rules. High school pitchers are viewed as "risky" and unworthy of top draft bonuses based on past performance including injury risk. Therefore teams aren't willing to pick them in the top 2 rounds. However, the upside for these pitchers is multi-million dollar so they aren't willing to take 3rd or 4th round money. Once you get past round 2 the top bonuses are low enough that you're essentially saying to high school pitchers - go to college. That's not necessarily a bad thing.
   19. RoyalsRetro (AG#1F) Posted: June 06, 2012 at 01:30 PM (#4149880)
I wonder if this will be a boon for junior colleges, as many high schoolers may elect to go there to be draft eligible again in a year or two.
   20. Dock Ellis on Acid Posted: June 06, 2012 at 01:45 PM (#4149895)
You can be drafted in either year of your junior college, right? Theoretically you can be drafted up to 5x. Perhaps players will be taking it year by year until they get drafted into a situation that is relatively favorable to them.
   21. Ivan Grushenko of Hong Kong Posted: June 06, 2012 at 01:46 PM (#4149896)
Once you get past round 2 the top bonuses are low enough that you're essentially saying to high school pitchers - go to college. That's not necessarily a bad thing.


I'd say it's bad for the HS pitcher who either goes to college and gets hurt and ends up never getting a signing bonus, or the one who takes the crappy signing bonus in Round 8 and gets hurt rather than taking a higher bonus under the old rules.
   22. SouthSideRyan Posted: June 06, 2012 at 01:46 PM (#4149897)
[17]So if a team doesn't sign one of their underslot guys before that window expires, they're going to be forced to make a formal offer of at least 40%. So essentially you've got 30 days to sign a guy for less than 40% his slot.
   23. RoyalsRetro (AG#1F) Posted: June 06, 2012 at 01:50 PM (#4149905)
I'd say it's bad for the HS pitcher who either goes to college and gets hurt and ends up never getting a signing bonus, or the one who takes the crappy signing bonus in Round 8 and gets hurt rather than taking a higher bonus under the old rules.


Not a pitcher, but Kenny Diekroger turned down a $2 million offer out of high school, regressed in college, and was taken in the fourth round this year by the Royals where I imagine he'll have to settle for slot money.
   24. The kids disappeared, now Der-K has too much candy Posted: June 06, 2012 at 02:00 PM (#4149924)
Most of these seniors just want a chance to play pro baseball. There is the occasional James Ramsey type who is a good enough prospect to have a little negotiating power, but the vast majority of these seniors are nobodies. They are the kind of guys who would have gone in the 25th round last year. Their options are sign now, or never, ever play pro baseball.

Right. I figure that's why we saw so many marginal types tabbed, rather than more guys in the Dugas/Tucker class (a grade or two below Ramsey/Lopez, but more than roster filler). Fussing around at bonus time has either been obviated through a pre-draft handshake (which I imagine most guys would honor) or makes it likely that you won't get a fair shake upon signing - and the opportunity may be worth more to them than 40% of slot.
   25. DL from MN Posted: June 06, 2012 at 02:18 PM (#4149957)
Correa is reportedly taking $5M so that leaves the Astros money for Virant.
   26. DL from MN Posted: June 06, 2012 at 02:20 PM (#4149958)
a boon for junior colleges


I don't know. If I'm turning down $$ I want the exposure and competition of a big time college. I'd also want the scholarship to be worth some bucks.
   27. JJ1986 Posted: June 06, 2012 at 02:27 PM (#4149964)
I haven't really had time to formulate this thought, but:

Isn't the slotting going to have a significant effect on the number of African-Americans playing? And in the direction that MLB is supposed to be against? A disproportionate number of two-sport stars (compared to MLB draftees as a whole) are black. Same goes for high school draftees as compared to college draftees.
   28. Esmailyn Gonzalez Sr. Posted: June 06, 2012 at 02:58 PM (#4149998)
I don't know. If I'm turning down $$ I want the exposure and competition of a big time college. I'd also want the scholarship to be worth some bucks.

If you go to a big time college you're committed for 3 years before re-entering the draft. Junior college is a 1 year commitment.
   29. Tripon Posted: June 06, 2012 at 03:19 PM (#4150023)
The only way you can be a UFA and avoid the draft is you're in the draft and don't get picked. It happened last year, and the Astros signed some kid out of Texas that their scouts missed before the draft.
   30. Dock Ellis on Acid Posted: June 06, 2012 at 03:22 PM (#4150029)
I don't know. If I'm turning down $$ I want the exposure and competition of a big time college. I'd also want the scholarship to be worth some bucks.

Also I think if you are a known in high school, you will remain known no matter where you go. Bryce Harper had no problems getting exposure at College of Southern Nevada.
   31. The kids disappeared, now Der-K has too much candy Posted: June 06, 2012 at 03:28 PM (#4150033)
27: Possibly, though should be might be mitigated by some of them entering the minors later on. Eventual impact is unclear - probably not too, too big (imo).
29: Yeah, that kid's school season was cancelled due to illness or something. Alaniz? The O's signed Glynn Davis for decent money (100-125K?) out of a small juco as a NDFA after he showed 80 speed in summer ball two or so years back.
   32. RoyalsRetro (AG#1F) Posted: June 06, 2012 at 03:46 PM (#4150052)
Drat-eligible players who were not drafted include Heath Bell, Mike Adams, Ryan Hanigan, Rod Barajas, Tim Collins, Scott Richmond, George Sherrill, Clay Rapada and Kevin Millar, among others.
   33. Zipperholes Posted: June 06, 2012 at 05:24 PM (#4150154)
^ Brandon Beachy.
   34. Tripon Posted: June 06, 2012 at 06:52 PM (#4150199)
Eric Gagne as well. Still, ultimately, you want to be drafted. If you're not drafted, it probably means a team doesn't think you're good enough to make it through pro ball anyway, so they won't give you a big bonus that you're looking for.
   35. Crispix reaches boiling point with lackluster play Posted: June 06, 2012 at 07:09 PM (#4150209)
Drat-eligible players who were not drafted include Heath Bell, Mike Adams, Ryan Hanigan, Rod Barajas, Tim Collins, Scott Richmond, George Sherrill, Clay Rapada and Kevin Millar, among others.

Well let's all finally mark their accomplishments with a unanimous "Drat".

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