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August 20, 2010 Future ShockDo We Really Need to 'Fix' the Draft?Another year, another draft signing deadline, and more deals than ever not getting announced until the final hours, and in the end, more money than ever being spent on bonuses. There are no real shocks here, no big surprises, as in the end, San Diego selection Karsten Whitson was the only first-round pick not to come to terms for purely monetary purposes. So now we prepare for next year's draft, the final one under the current collective bargaining agreement. Expect even more holdouts next August and, therefore, even more spending. But what about 2012? Here are some modest proposals, but for now, I'll stay away from the word 'fix.' Eliminate the concept of slots, be they recommended, or hard The current slot system is a joke, as they are merely recommended by Major League Baseball, with no true means of enforcement, other than their ability to fine a team if they do not go through the over-slot process, which involves telling MLB about your intention to go above the slot and then getting yelled at in return. In addition, a true hard-slot system that would restrict what teams could spend with every pick would be flat-out bad for baseball in every way. The argument here is not one of rich vs. poor or fairness, but a much larger for-the-good-of-the-game one. Hard slots mean that Major League Baseball has decided to steer players away from the game, as without the ability to exceed even recommended slots, a large number, if not a majority of, high school players selected after the first two or three rounds would elect to go to college or, even worse, attend college and pursue another sport. The minor leagues would quickly be stripped of talent, and MLB would be cutting off its nose to spite its face. It's time to let the market rule here, and let teams be treated like adults who can make their own decisions about what players are, or are not, worth. The bigger question, of course, is why does MLB put so much effort into the draft, when even with their inflation, the overwhelming number of bonuses amount to less than what most teams pay for the 11th man on their pitching staff? Move up the deadline, and no more holding back announcements When first instituted, the August 15 signing deadline was designed to end the year-long holdouts that were becoming disturbingly more common. A sound goal to be sure, but at the same time, they've created a monster that sees more players waiting until the deadline each year as history tells them that those who wait are those who get the most money. Teams and players simply don't need two months to work out a deal; often they only need two days. Let's get the players off their couches with a PlayStation controller in their hands and onto the fields. A July 15 deadline provides plenty of time to get a deal done while also allowing players to get between 30 and 40 professional games under their belt, as opposed to simply participating in fall instructional league and waiting seven months for an official debut. Another contributing factor that prevents players from hitting the field is MLB's misguided policy of withholding approval of above-slot deals until the last possible moment under the belief that such announcements would simply drive up bonuses. There is absolutely no evidence to support that belief, as bonuses and total spending rises at the same rate, so it's time to end the charade. When a player and a team have a deal done, regardless of money, it's in the best interest of everyone to get him playing. Allow the trading of draft picks I shared some of these theories with a baseball insider, and his first reaction was, “How will this keep bonuses down?” My answer: it won't. That's not my goal here, and as we've already seen, MLB's attempts to achieve less spending have created more problems than solutions, while stricter measures have the potential to be damaging to the game itself. That said, certainly there will be teams that don't want to match the spending ways of others. To counter that, it's time to allow for the trading of picks just like any other team asset. If a non-spending team has the third pick in the draft and doesn't want to pay the prevailing rate, nothing should prevent that team from marketing that pick in return for existing, more proven commodities. Such a system would help balance the distribution of talent in its own way. Many believe that the draft will, for the first time, no longer be the red-headed stepchild in collective bargaining, and many major changes are being discussed in order to help curb spending. As one big-league executive said to me last year, “Every time Major League Baseball tries to 'fix' the draft, they just create more problems.” So, in reality, the best way to fix the draft just might be to stop trying to fix the draft.
Kevin Goldstein is an author of Baseball Prospectus. Related Content: Announcements
96 comments have been left for this article. BP Comment Quick Links Mountainhawk (37208) Also, they don't need to shorten the signing window, they need to extend it. Teams should hold rights 1 years + number of years of college eligibility left. mattcollins (17309) That's a horrible idea. Why would I ever draft a college player if I were a team? I'd draft 50 high schoolers, sign no more than 10, and let the other 40 go to college where I would offer them contracts only if I liked what I saw in college. College baseball would essentially become a minor-leagues where players aren't paid. And like Kevin said about a hard slot system, something like this would drive away players who are two or three sport athletes, or even those who have other non-sport opportunities, which only dilutes the product you put on the field as MLB. Mountainhawk (37208) It works in other sports. Hockey teams draft 18 year olds all the time, and they have their rights until July 1st after the kid graduates colleges. It gives the kid options (go to college or start pro career right away) and doesn't allow the player to use college years as leverage. tdrury (12878) Mountainhawk with the NHL most of the kids that are going to "go pro right away" aren't playing in high school hoping to play college hockey, they're playing in Major Junior. Softy Electric (33037) Hockey players tend to be hockey players, whereas a significant percentage of baseball players have had significant success in football and basketball. awayish (20768) From the players perspective, although amateur guys are not in the union, their talent is a direct replacement for the veteran players. If you make your replacement cheaper, that's simply undercutting yourself even more, especially with the recent trend of teams getting smarter about drafts vs FA. ostrowj1 (8095) I don't see how reducing draft bonuses necessarily decreases pro salaries. Before depressing bonuses (in my opinion) all prospective MLB players are already consumed, so lowering the cost of draft picks would not suddenly increase the amount of amateurs signed. lemppi (32643) Nice article Kevin G. How can you send this to Bud Selig to make sure he reads it? Listening to Bud speak, he's "all in" on some of the proposed "fixes". Is there any doubt he'll push it through? The union will give in on the draft to get other goodies. Won't they? Is there any word from the Union on fighting to keep the draft closer to what it is now and not make the changes in order to just "curb bonuses"? doncoffin (422) There is no convincing economic rationale for the amateur player draft. ALL it does is depress signing bonuese and initial salaries, especially for the most talented amateur players (even though those players already receive the highest bonuses and initial salaries, they are depressed; players further down the talent scale are also being exploited, but not as badly). awayish (20768) Agreed. fawcettb (34177) Your logic is a little flawed. If we're operating a free-market, how do you even limit the number of MLB teams without restricting the market's "freedom? Kevin Goldstein and I and a couple of rich guys would, by your logic, have the right to operated our own MLB team. I'm just not sure that all rights ought to be conferred by money, which is what would occur if we let the free market rule in baseball. ostrowj1 (8095) The affects of a "free market" are highly dependent on how you perceive MLB. Personally, I think it is most accurate to think of MLB as one organization. Each team is subdivision of Major League Baseball. joheimburger (46517) This would of course be valid if each teams was not owned by a separate entity ostrowj1 (8095) Teams may be owned by different entities, but the entities don't have nearly the kind of control over their teams as a typical business owner has over his business. Owners have surrendered so much control over their product to MLB that I find it hard to think of major league baseball as a collection of 30 individual businesses. Mountainhawk (37208) Each franchise is owned by a separate entity. Key word there is franchise. Do you think two Burger Kings compete with each other, or are they competing with McDonalds? perhaps (5212) Parity? Having fans feel like their team can win -- fans who consequently would buy tickets to watch their team win -- sounds like a great economic rationale to me. It sure works for the NFL. baserip4 (44653) If you're an owner, there is an incredibly convincing economic rationale for the amateur player draft. Joe1717 (57599) If you end the draft, then the Yankees and every other high spending team will always get the best players. That's a terrible idea. The whole point of the draft is to give the weaker teams first crack at the best available amateur players. You think the Nats would have had a chance at Harper or Stras if free market ruled? tdrury (12878) You're not looking at the entirety of what a no-draft MLB would look like though. The Yankees can't sign every top amateur because these guys want to play and move up and become major league regulars/stars so that they can really get paid... they won't want to take a payday now to go to an organization that's also signing another top prospect at the same position and already has a couple more in the minors blocking people. A mature college hitter doesn't want to get stuck playing 1B in low A ball because the organization can't make room for him anywhere else, he wants a quick and easy path to the big leagues more than he wants the extra dollars now. perhaps (5212) That's quite a lot of conjecture that cannot be substantiated. Maybe players want to play for proven winners and feel confident in themselves enough to feel that they could make it to the big leagues with them where even others could not. I don't know, and neither do you know. tdrury (12878) Whereas the point I was responding to ("without a draft the Yankees will sign everyone that's good") wasn't unsubtantiated conjecture in the first place? perhaps (5212) I think it IS substantiated historically. Why did they institute the draft in the first place? It wasn't always there. In fact, prior to the draft's existence, player development basically was the free market model: find the player, sign him. If the player was well known, there would be a bidding war, and the team with the deepest pockets wins the player. Clearly, there was a point in history where that situation was viewed to be untenable. baserip4 (44653) If this is the case, then why doesn't every college football player accept a scholarship to USC? How come some go to Nebraska? Or Texas? Why do quarterbacks that lose out to another recruit transfer? Seems to me that they want to get a chance to play. bcmurph07 (53996) If you followed college recruiting you would know that it does happen in college football. USC, Nebraska, Texas, etc. do get all the top recruits. Losing your job and transfering is different, that's like getting traded. But unlike college football, you don't get to choose if you get traded in the MLB. baserip4 (44653) The Pirates signed this year's best Dominican arm. Ynoa went to the A's. Those darn big markets in Pittsburgh and Oakland get all the good players! joheimburger (46517) Sano to the Twins, Aroldis Chapman to the Reds for $30 million, and on and on and on... HeavyHitter (2240) I think slotting of any kind is an illegal restraint of free trade and un-American. The draft itself has resulted in more parity than there would otherwise be and the owners are lucky to get away with it. Instead, they want more. Their greed will ultimately lead the stripping of MLB's antitrust exemption and the abolishment of the draft. Brian Kopec (12249) "Hard slots mean that Major League Baseball has decided to steer players away from the game, as without the ability to exceed even recommended slots, a large number, if not a majority of, high school players selected after the first two or three rounds would elect to go to college or, even worse, attend college and pursue another sport. The minor leagues would quickly be stripped of talent, and MLB would be cutting off its nose to spite its face." perhaps (5212) I agree -- this really was a sky-is-falling prediction from Kevin. Are these players really so mercenary that they'd drop baseball for another sport if it meant a few more million dollars? If they were, would scouts still think highly of their makeup? Would they have the requisite passion and commitment to the game to even make it to the show? Brian Kopec (12249) We aren't even talking a few more million. In almost every case, we are talking a few more thousand. And even those few extra thousand dollars, in the case of high school players who want to play football, are going to be deferred. SC (27400) I disagree, we are talking about a few more million. The slot (as I learned on this week's podcast) for a late-second round pick is about $500,000. A fourth round NFL pick can expect several million dollars. Brian Kopec (12249) There aren't enough MLB quality high school players getting drafted by the NBA (are there any?) so let's forget about the NBA for a minute. bcmurph07 (53996) The NFL is not a hard slot system, though Goodell and the owners want it to be. The NBA is a hard-slot system for the first round, but even the last pick of the first round gets a $5 million contract with $4 million guaranteed. Randy Brown (189) Short of letting a hard-sloting system exist and play itself out for a few years, there is no way to present hard evidence that athletes would choose other sports, but we do have a few data points. Consider the signing bonuses that some athletes have received when they have had two-sport leverage...Drew Henson (whoops!), Jeff Samardzija (whoops again!), etc. If Samardzija wasn't given $10M, he's playing wide receiver right now. You just need to look at the talent coming out of Puerto Rico before and after they became part of the draft to see that less money = less talent. Aug 20, 2010 14:10 PM Brian Kopec (12249) I'm not aware of an influx of Puerto Rican talent coming into the NFL or NBA since the MLB subjected them to the draft. How awesome are the non-sports economic opportunities in Puerto Rico that prospective big leaguers are passing up the chance to play minor league baseball because their bonuses are being suppressed by the draft. I still don't see the evidence. garethbluejays2 (57369) Hard slotting, caps on spending! American sports are allowed to operate in ways that dictators would consider draconian and that Banks would consider unfair. All sportsman should be allowed to choose where they want to play and should be paid the market rate from the moment they turn professional. Michael Dennis (24183) Let them all be free agents. If the Reds can come up with $30 million to get Chapman I'm not buying it will mean the Yankee's sign every top talent. Also, even if the Yankee's did give Bryce Harper say $50 million, how much more are they going to spend? They aren't spending a $100 million on the draft every year. Also if teams had to offer a guy the kind of contract that gets you a decent FA, that would certainly effect team payrolls. bcmurph07 (53996) The fact that you're relying on the yankees paying Bryce Harper $50 million in order for your argument to work shows how flawed it is. baserip4 (44653) Why don't the Yankees sign every good young talent out of the Dominican or Venezuela every year? Or even half, for that matter? joheimburger (46517) Because there is risk involved with signing amateur players, even more so those who are 16,17,18 years old (i.e. international players and US HS players). There is a bit more certainty in college bats, but no prospect is a guaranteed MLB All-Star. The Yankees aren't completely irrational with their discretionary capital (which is what a $100 million draft budget would probably be). This is also why the Yankees would not sign every player who wants first round money in an uncapped, amateur FA scenario. bcmurph07 (53996) Because it's cheaper and more efficient to go into the draft. Why pay one risky player $30 million when u can get 6 top prospects for $5 mill each? The benefit they get by paying guys overslot is already substantial. Richie (27368) "If you want examples of active players that could have ditched the MLB for football, just look at Arod and Mauer." bcmurph07 (53996) I'm just thinking off the top of my head, but they happen to be two of the best players in baseball. Todd Helton is another. bcmurph07 (53996) I agree it's a minority but if you take that minority out of baseball, it will have a huge effect. bcmurph07 (53996) Did more research: Brian Kopec (12249) So are you asserting that the Upton's would have gone to college for the chance to enter the NFL draft 3 years hence, rather than sign for whatever #1/#2 MLB pick bonus would be under a hard-slot system? bcmurph07 (53996) Steve McNair 1991 Richie (27368) It's been shown that having the very first pick in the amateur draft is an enormous advantage. With a free market system, yes the Yankees would have that very first pick every single year. garethbluejays2 (57369) The Yankees already have an arena where they could blow everyone else out of tha water - international signings. But they don't always sign the big names. Presumably, even they have a budget. More spending on young players may mean less on older ones all round and certainly fewer free agents being overpaid. dantroy (7559) The premise of most "The draft needs to be fixed!" articles is that the $ given out to some of the players is too high. That leads to discussions of slotting, etc. I think KG's view is more correct - the draft is intended to lower bonuses by limiting a player's negotiating leverage, and it works (See Chapman, Aroldis). Kevin's proposal is intended to remove some of the pretense from the proceedings (drawn signing periods where nobody begins negotiating until an hour before the deadline) and allow teams to trade picks if they're unwilling to pay the freight for the talent, or simply think they can gain an advantage through flexibility, etc. BillJohnson (2635) I don't think that's the premise at all. If there is one connected to the dollar figures, it's that the wrong teams are being put in the position of having to expend the megabucks. That isn't quite the same thing. If the Yankees or Red Sox had such a lousy season that they would be drafting in the first three slots, you can bet that they'd somehow find the resources to offer not just over-slot money but riches beyond imagination, if it resulted in getting a Strasburg or even a Harper. Suppose one of those teams had had the second choice last year. If Strasburg had wanted to join a big-name program, all he would have had to do was advertise that he was jacking up his price to stratospheric levels that Washington could not possibly afford -- but Boston or New York could. It's easy to see what happens next. Richie (27368) bcmurph, you're list isn't very enlightening without noting just where all those guys were drafted. If you're a highly-sought after college football recruit who gets 5th-round drafted in baseball and chooses baseball instead, yes that's something. If you're a 1st-round baseball draftee who accepts a college football scholarship instead, yes that's something. thegeneral13 (32625) I see a lot of "the Yankees will sign everyone," followed by "no they won't, look at these 3 guys that signed with someone else." Of course both of those comments are missing the point. The big-market teams won't sign everyone - it's impossible - they'll simply sign more than their fair share of the available talent. They already do this via the free agent market but it would be further exaggerated by making the draft a free market as well. Our brains aren't really wired to observe when a team signs 1/20 of the top talent available vs. 1/30, which is why the conversation devolves into specific player examples, but would anyone disagree that consistently signing a disproportionate share of talent is an advantage, and that having greater financial resources in a free market provides you with that opportunity? We might disagree on the extent to which that advantage should be neutralized, but it is certainly an advantage, and one that would increase if the draft is made a free market. I personally prioritize league parity over ensuring amateurs are paid full market value, but I recognize that that's a personal preference and others might feel differently. joheimburger (46517) I can't imagine anyone disagreeing that it is an advantage to have greater financial resources when pursuing talent in a free market. This advantage does not guarantee success. ryanlazenby (30885) While it's true that a lack of information would lessen the advantage of large market teams, it wouldn't eliminate it. If the Yanks sign three high risk high reward first basemen the odds are in their favor over a team that can sign one, the draft allows four teams to take equal risk with those four same players increasing the chance a team with lesser financial strength gets a good player. Richard Bergstrom (36532) Welcome to capitalism. There's no such thing as a fair share. The best product that consumers want, whether it's a soda or a baseball team, generates the most revenue. The Steinbrenners are not, and never were, the richest owners in baseball but they spend money to put the best product on the field. Don't complain about the Yankees, complain about the billionaires who cry out for revenue sharing. Mountainhawk (37208) Baseball teams aren't capitalist-style competitors. Capitalist style competitors maximize profits by driving all competitors out of business. If there is only 1 baseball team left, their profit is $0. Richard Bergstrom (36532) Major League Baseball as an organization is a capitalist-style competitor by driving out other professional baseball leagues. In effect, they are monopoly which is why their antitrust protection is so important to them. jake726 (52400) Do you understand the fact that all markets are not created equal? Saying that the Royals, for example, have the potential to equal the Yankees revenue is asinine. Look at the revenue streams of Tampa or Oakland a few years back as examples of the fact that even a great product does not guarantee financial success in a bad market. Richard Bergstrom (36532) From 1969 to 1992 (ignoring the strike-shortened 1981), the pre-Wild Card Era, the Yankees won their division four times, and were second four times. Over that same time frame, the Royals won their division six times, and were second eight times. The Royals were pretty competitive in those days even if they were in middle (of nowhere) America. Travis G. (54948) Good article, Kevin. I have to agree that capping spending would diminish available talent. You have to wonder whether Jackie Robinson would even play baseball nowadays? Or would he play CB for USC? NFL draftees make a lot more $ - though whether that's why they choose football over baseball, I'm not sure. Maybe it wouldn't happen in the next 5-10 years, but over the next few decades I believe it would. Travis G. (54948) just checked. it began there in 1990. interesting read here (http://mlb.mlb.com/news/article.jsp?ymd=20070912&content_id=2204904&vkey=news_mlb&fext=.jsp&c_id=mlb) about how PR wanted out of the draft in '07 and blamed it for declining finances and interest in the game. conwell (6566) Jackie Robinson played Running Back for UCLA. Travis G. (54948) fine, but you understand my point, yes? Brian Kopec (12249) If your point is that baseball would have lost Jackie Robinson to football...then I think you have no point at all. Richard Bergstrom (36532) "You have to wonder whether Jackie Robinson would even play baseball nowadays?" ofMontreal (37476) Hi KG. Good article again. But speaking of 'fixing' the draft, I'm surprised you haven't written anything about Loux being given FA status. I'd be interested in your anticipatory take on what will happen. I assume you think the right thing happened. schmub (41582) Any chance the bind that the late deadline puts college coaches in so much as registers for Selig and the rest of MLB? Richard Bergstrom (36532) I agree with the article though the concern I have about trading draft picks is I can see some franchises trading draft picks for cash, then pocketing the cash. sempris (57700) Does anybody have a theory about what would happen to the international signing rules, including the crazy July 2 deadline? sempris (57700) By the way, I hope College start using either wood bats or some sort of non-aluminum bad. jillsinmo (42493) Turning the amateur talent pool into a free market system would allow these kids to be compensated more according to their talents, but it removes one of the advantages that smaller market teams have. I can't imagine MLB would want to give up the only advantage that smaller market teams have in this way, you would be making the game completely free and a game of resource allocation, which sounds alright until you realize that every team is generally smart enough to use the capital it has available to good effect, leaving us with a system where those with significantly more money reap the rewards at the expense of the less fortunate teams. While its fair, I would contend that it certainly doesn't make for a more entertaining product and thus would probably be bad for baseball on the whole. jake726 (52400) I agree with most of the proposals in the original article minus the elimination of soft slotting. Soft slots are a brilliant tactic for subtly driving down bonuses at the margin and there is no reason for MLB to abandon them. Basically, through soft slotting, MLB gets first say and gets to suggest how much draft positions are worth. If they do this well, they should be setting those values at just below where they think an unslotted draft would value those picks. If a player wants $600,000 but is drafted at a $550,000 slot, it's pretty likely that they will rapidly accept their slot offer rather than negotiating and holding out for a small marginal gain. Obviously, this has no impact if a player's perception of their value and their slot are radically different. But, a good system of soft slotting allows MLB to set the starting point for negotiating, which is a valuable ability. krissbeth (40802) This is about the players' lives and their livelihoods much more than about competition or parity. Granted that these negotiations are about the naked exercise of power, but the idea that I should be rooting for high school students to get more jobbed by their occupational choice is not a compelling one. I hope at the end of the day that drafted players end up with more money. The fact that they are not allowed at the bargaining table between the union and the owners is a bad sign. Thank god at least some of them have Scott Boras. Not a subscriber? Sign up today!
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If they aren't going to have a worldwide draft, they should just dump the draft entirely, have a 4-6 week amateur signing window, and put a cap on the total amount spent by any one team on amateur players, with the cap dependent on the prior years record.
why would you cap it?
Because the goal of MLB is to put an entertaining product on the field to compete with other entertainment choices, and the best way to do that isto ensure that the same 4-5 teams don't sign every single good player in existence.
But would this really happen? The A's got Ynoa, the Reds got Chapman, the Twins got Sano, the Pirates just unloaded on this year's draft, etc. I'm not so sure that the same 4-5 teams (Yanks, Sox, and so on) would always be signing the biggest names.
Great point. More and more "small" market teams are learning that this is where the biggest potential profits are and spending a ton to improve their team. The current system gives them that opportunity MUCH MUCH more than any capped system would.