Wednesday, June 6, 2012

Draft, day 3: Follow the money

Baseball's amateur draft ground through round 15 Tuesday afternoon. There are still 25 rounds to go, and these rounds are, at least in theory, increasingly irrelevant. The major talent has been plucked already.

But there was some interesting gamesmanship going on Tuesday — and, as an unintended consequence of the new draft rules the commissioner's office insisted on in the new labor agreement, the drafting of many players in Rounds 6-10 who will be released in spring training 2012.

Here's the deal:

  • Every pick in the first 10 rounds was assigned a dollar value. 
  • Each team was then assigned a "bonus pool" — the sum of the values of those picks. 
  • Teams can go under their budget without consequence, but the penalties for exceeding the total pool are heavy, and they get heavier quickly the more the team goes over its allotted sum. 
  • The value of an unsigned pick is deducted from the team's pool, so it can't just give its first round pick the money allotted to the 10th round and tell that choice tough luck.
  • After the 10th round, all picks are budgeted for a maximum of $100,000, and there are no penalties for not signing a pick. Any bonus in Rounds 11-40 in excess of $100,000 counts against the bonus pool.

What happened Tuesday, particularly in Round 6 through 10, was intentional overdrafting of players. Baseball America tweeted that they were receiving text messages from scouts after picks saying: I didn't even turn in a report on this guy. Players who in the past would have been selected 20 rounds later -- and perhaps not even signed -- were being picked to build a cushion for the harder signs.

The idea: A team would contact a player, often a college senior, who figured to go late in the draft if at all. Say the slot was valued at $700,000; the team tells the player: We'll take you IF you'll sign for $150,000. The player, realizing that that's more than he'd get if drafted where he ought to be taken, grabs the opportunity — and the team has an extra $550,000 in its bonus pool, which it can spend on a tougher sign either earlier in the draft or later.

Some high school players who were seen as tough signs went undrafted until after the 10th round penalties. Others were taken in slots whose values were not sufficient to buy them out of their college options. Saving money on the other picks becomes essential to sign the prime talent without exceeding the budget.

But the result is that Rounds 6-10 mean less than they did last year. A lot of non-prospects got taken in those rounds, and more realistic prospects deferred to later rounds.

The best prospects — with a few exceptions, most notably Mark Appel — will still get their money, and some weak ones are going to benefit as well. The savings are coming out of the midrange prospects.

Appel, widely projected to be the first overall pick, was reportedly offered $6 million by the Astros before the draft and turned it down. (The first pick was slotted for $7.2 million.) He wound up the eighth overall pick, by the Pirates, and their total bonus pool was $6.6 million. He has no chance of getting what he expected.


  1. "Say the slot was valued at $700,000; the team tells the player: We'll take you IF you'll sign for $150,000. "

    A slot value of $700,000 would be a second round pick. It is highly unlikely anyone is doing that with a pick that high. And the $550,000 "saved" in that example would allow them to pay a kid taken later $650,000 dollars. If he would have signed for that, they would have just taken him and used the $50,000 saved on someone else who they wouldn't have been able to sign at all otherwise.

    I am sure signability is an issue and there are players who were taken who will sign below slot. But I doubt teams are taking low budget ringers with high draft choices. Instead these are players who are legitimate choices with signability a factor, as it is in any choice.

  2. Those off-the-top of my head numbers could have been chosen more carefully, but it's possible that somebody will (if not now, in a future draft) do just that.

    Consider a team that finds a legitimate top-of-the-draft talent falls to it in the middle of the first round. (Happened at least twice this year, with Appel and Lucas Giolito.) Say the team has $6.5 million in its bonus pool. It's not mathematically possible to get Appel even the $6 million he turned down, but if you squeeze the rest of your picks sufficiently you can get to $5 million, and that might sign him.

    Of course, you'll have punted the rest of the first 10 rounds. Appel's talent probably doesn't justify that. Giolito's might. Bryan Harper's probably does.

    There ARE going to be guys taken in the first 10 rounds who will be signed now and released next spring. There WERE true non-prospects taken in Rounds 6-10 in particular. This is beyond signability.

  3. "There ARE going to be guys taken in the first 10 rounds who will be signed now and released next spring."

    I doubt it. There are plenty of players taken to fill out minor league rosters who get next to nothing as a bonus for signing. Why would they pay anything to a guy they had no use for?

    Sixth round choice slots are $200,000 or less. The Twins number 9 choice in 2011 got $25,000 as a bonus. Guys in the late rounds may get $5000. You don't need to draft "non-prospects" in order to get low budget players.

    I am doubtful any team is going to toss its entire slot budget at one player. There are too many examples of "sure things" that failed to live up to their expectations.

  4. My nephew was drafted in the 24th round. What if any singing bonus should he expect

  5. There is no bonus for singing. :) I think mid- 4 digits for signing.