August 17, 2007

Future Shock

The 2007 Draft Mess

by Kevin Goldstein

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My phone rang at about 9 a.m. or so Thursday morning. The industry was still reeling after Wednesday night's flurry of last minute signings; it was a scouting director, and the first sentence out of his mouth said it all:

"Well, I guess THAT didn't work."

During the last few days and hours before the newly-implemented signing deadline of August 15 went into effect, all of the work major league baseball put into the controlling of draft spending--plans that included a recommended slot ten percent below last year's figures, as well as a silly process to make going over slot as difficult as possible--all blew up in MLB's face, as first-round pick after first-round pick finally came to terms for figures not only well over slot, but often approaching record territory.

"You wrote about the finger in the dyke a couple of weeks ago," added the scouting director. "Well, the finger came out and there was a whole lot more water than expected." The raw numbers were nothing short of astounding, as six of the previously unsigned first-round pick received bonuses above three million dollars; three received major league packages, and number five overall pick Matt Wieters received the largest up-front bonus ($6 million) in draft history. A final analysis of money spent just in the first round shows that major league baseball's strong words about keeping bonuses down fell on deaf ears:

Year    Total $     Average $
2007  $62,942,500  $2,098,083
2006  $57,017,093  $1,900,570
Increase: 10.39%

That's a big flip, from 10 percent down (as MLB suggested), to 10 percent up, for a net difference of 20 percent more than the slots suggested. One aspect of this that must be especially bothersome to Major League Baseball is the way these increases were distributed:

Signed for less than 2006:   21
Signed for the same as 2006:  2
Signed for more than 2006:    7

Now we get to the heart of the problem--70 percent of the first-round picks actually signed for a bonus less than last year's pick at the exact same draft position. Only seven saw an increase, but the increase was so great as to make impotent the existing slot recommendation system. "Look, as much as people want to talk about how things have changed with the new collective bargaining agreement, nothing has changed at all," said one scouting director. "And now the system has created its own separate market for elite talent."

Interestingly enough, in talking to both large- and small-market teams, nobody had any ill-will for those teams that spend the big money. "Hey, nobody ever said life was fair," said one scouting director. "You can't begrudge the Tigers or the Yankees here, and nothing is guaranteed for them anyway," he continued. "Even in the best of times, we're right only so much of the time and there's still a lot of chance. I can name plenty of can't-miss guys who missed."

"It's an absolute mess if you look at the whole picture," said another. "We have no payroll cap, no restrictions on international signings, no real restrictions on the draft and now the high-revenue teams are finally kicking asses [in the draft], too," he said. "You don't roll back the clock in this business, not when there are $100 million contracts floating around. Everything is up, and then MLB tells teams to cut signing bonuses by 10 percent? Reasonable people don't accept that."

"Hell, I wish I could do what the Yankees do," said a third scouting director. "If you have the money, of course you should take a guy like [Yankee pick Carmen] Angelini in the 10^th round instead of a more in-line 10^th round talent. But be sure of one thing: that's not scouting, that's just money."

Most industry insiders agreed that 2008 will bring some changes, but nobody had much of an idea as to what they would be, other than the spiral continuing out of control. "I can tell you two things right now that are going to happen next year," predicted a scouting director. "First off, everyone is going to wait until the 15^th to start negotiations, because they now saw that those who waited are those who got paid. Secondly, when you have teams like Washington and Baltimore suddenly playing with the big boys, more teams are going to say 'hey, we tried your way and it didn't work, and now we're going against it too because we have to compete here,' and they will walk away from the recommendations and the whole system has a good chance to come tumbling down."

"I don't know what can be done at all," said another scouting director. "Those teams that went continuously over slot now have to do it time and time again next year, but really, in the big scheme of things, it's just not enough money for MLB to be making this big a deal out of it."

So enough about the problems, what about solutions? Are there any? What can MLB even really do, considering that they have little power to do anything substantive without the ability to establish real rules and/or ramifications? "I don't know what they'll do--keep trying to convince teams that they aren't investing their money wisely?" quipped one scout, sarcastically. "I mean how is the commissioner's office making these determinations that player X isn't the caliber of player for a club to invest in? What information is that based on?"

"MLB has to regroup here," said one scouting director. "They can't change the basic agreement for another four years and they just can't keep yelling because it's beginning to wear thin on people," he continued. "The system should be set up so the worst teams get the best players, however it works. That's what Bud should say to teams--instead of worrying about the bonuses, just tell teams to take the best players and sign them and then maybe the high-revenue teams wouldn't have all this talent falling in their laps and maybe the draft will be closer to what it's supposed to be."

Whether the draft will ever get to point where there is a system in place that allows for a pure flow of talent from top to bottom looks highly doubtful at this point, but one thing is clear to that front office official who called this year "a disaster"--the idea of any sort of slotting system is a myth that needs to be busted. "The slotting system in the end is a lot like Santa Claus," he described. "You explain it to the kids, and that wastes time because you know he's not real and he's not coming--just like teams won't adhere to these so called 'recommendations'--so you end up buying gifts anyway... but somehow dressing up in a suit and telling stories makes everyone happy."

MLB officials were contacted in relation to this article, but had not returned calls as of press time.

Kevin Goldstein is an author of Baseball Prospectus. 
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