Transaction Analysis: ... (08/17)
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August 17, 2009 Prospectus TodayMinding Your Own Business
We're about 12 hours from the industry-imposed deadline for players selected in the 2009 Rule 4 draft to sign with the clubs who picked them. Those players who do not reach agreements go back into the 2010 draft pool, with the clubs that failed to sign picks in the first three rounds getting a compensation pick in that draft. Eighteen first-round selections have signed, but all anyone cares about is one who hasn't. Stephen Strasburg, taken with the first pick by the Nationals, is in the midst of tendentious negotiations with the club, working largely through his advisor, Scott Boras. Arguably the top college pitcher since Mark Prior, Strasburg is attempting to get not just the top signing bonus in draft history, but one significantly higher than that achieved by Prior back in 2001 ($10.5 million total on a major league contract). The argument for his doing so is that he's a comparable or even superior talent, and that we're eight years-and aggressive attempts by the game's administrators to control signing bonuses even above and beyond eliminating competition for the players-past Prior's signing. You know all this. What I find interesting about this case is how vocal at least one player has been on the issue. Over the weekend, Strasburg's potential teammate, Ryan Zimmerman, was quoted at the Washington Post website by writer Chico Harlan: "When it comes down to it, Strasburg has to think about, 'Can I go to bed if I turn down $15, 16 million dollars-whatever it is-to pass up the opportunity to play for these guys?' That's a lot of money. I don't understand what he thinks will be better next year. If we don't take him, who's gonna take him next year? Pittsburgh? San Diego? San Diego is not gonna pay him more. Absolutely his leverage will never be higher. Everybody wants to play where they want to play; everybody wants the ideal situation, but that's not the point of the draft. You can't tell people where you want to play. At some point, do it like everybody else has already done it. I agree, he's one of the better college pitchers ever to pitch, but he hasn't proven anything yet." Maybe it's just me, but I've always found the notion of passing judgment on someone else about what they should work for as distasteful. You get what you negotiate, and it's not up to a third party to decide what's "a lot of money" for one of the two involved. The above quote got a lot of play, in part because Zimmerman was also a top-five draft pick just a few years ago, and so is considered to have comparable experience. He doesn't. Coming out of college, Ryan Zimmerman was nothing like Stephen Strasburg, for one, and for two, who the hell cares what Ryan Zimmerman thinks? Zimmerman doesn't give a tinker's damn ($1, 1912) about Stephen Strasburg; he cares about not having to play third base behind crappy starters for bad teams for the rest of his life. He cares about playing a relevant baseball game in September for the first time ever. He cares, it would appear, about the profit margins of Major League Baseball. Zimmerman is a company man, and maybe he can be, since he signed a slot deal out of college and garnered a five-year contract this spring after not improving at all from the day he stepped into the league. People care what he thinks because he's one of the best players on the team, and your influence in baseball is pretty strongly correlated to your OPS or ERA, rather than the caliber of your positions. Zimmerman is wrong, though. "At some point, do it like everybody else has done it" is perhaps the weakest argument-for anything-you could possibly put forth. It's "I got mine" in more words, and it is unfortunately the argument that will probably lead to a formal slotting system in the next Collective Bargaining Agreement, as the ones who got theirs trade away the negotiating leverage of unrepresented teenagers in the grand traditions set by the NFL and NBA players. There are many misconceptions here, some of which I've covered in the past. The primary one is that the draft exists as a mechanism to enhance competitive balance. Even a cursory look at how it came about puts the lie to that; baseball had lousy competitive balance for most of the 20th century, and no one in the game cared. It wasn't until competition via signing bonuses became more of a key component in the acquisition of amateur players that the leagues got together and came up with a system for ending that competition. Any effects on competitive balance were secondary, and arguably unintended. The draft was, and still is, designed only to take away the rights of amateur players to have teams compete for their services. Couple that with the extended rights that teams have to the players they draft, from six to 11 years, depending on how much time the player spends in the minors and how their major league career is shaped, something over which the player has little control. As a result of those two factors, the time from draft day to the signing deadline is the only time for perhaps a decade-and perhaps ever-that a player has any kind of negotiating leverage. Once he signs with a team, that team owns him until he accumulates six full seasons of major league service time. How can you possibly blame a person for wanting to maximize his return on the only negotiation in which he'll have any leverage for at least six years, possibly an entire decade, and in many cases ever?
The idea, popular among players and ex-players who seem to have no grasp of the structure under which they play, that a draftee should just sign for whatever's available and start his career because he'll get paid if he performs, that's just laughable on its face. If the player survives a decade, sure, he'll have the chance to get paid. But let's look at… well, let's look at Mark Prior. Less than a year after being drafted, Prior was in the majors, making 19 starts for the 2002 Cubs, striking out a ridiculous 147 men in 116 In the offseason between 2003 and 2004, Bartolo Colon signed for $12.75 million per season. Kevin Millwood got $11 million in a one-year deal. Andy Pettitte signed a back-loaded contract that averaged $10.5 million per season. Sidney Ponson, bless his heart, signed for $7.5 million a year. In 2004, Prior's salary was $2.1 million, and while we didn't know it then, his career was over. Even though Prior had been one of the very best pitchers in baseball in his first two seasons in the majors, he didn't get paid like it, because the rules aren't set up that way. You only get paid if you're very good at the point where you can take your services to the open market. Do it before then, and you have no leverage. The various players who make the point that amateurs haven't proven anything yet neglect to consider that even if the amateur plays well as a professional, there's no guarantee at all of a big payday. They think you get paid for performance, and while that's partially true, what you actually get paid for is being able to negotiate with multiple teams. Felix Hernandez is making $3.8 million this season; teammate Miguel Batista makes $9 million. You want to argue that performance is the determining factor in salaries? Mark Prior never, not once, had as much leverage as he did while negotiating with Cubs, even though he was every bit the pitcher they expected him to be. Prior was worked incredibly hard in 2003 as Cubs manager Dusty Baker rode his best starter in both a pennant race and two post-season series. Baker broke him, and Prior doesn't get to go back now and ask for more money. Stephen Strasburg could do this. Stephen Strasburg could win Rookie of the Year and finish third in the NL Cy Young Award voting in 2010, and make $400,000 in 2011. He could be even better in '11, racking up a ton of innings as the Nationals make a wild-card push, and make $400,000 in 2012. The next time Strasburg will be able to do more than just ask for money, entirely at the team's mercy to give it to him, is the winter of 2012-13. The first time he'll be able to negotiate with more than one team is the winter of 2015-16, unless the Nationals diddle with his time on the roster, in which case it'll be 2016-17. That's a long time from now. That's a lot of innings from now, and he might never get there-he might be great, like Prior, out of the box, and never get paid because that's how the system is set up. So it doesn't really matter what Ryan Zimmerman thinks. It doesn't matter what your local columnist, making $63,000 a year without a fraction of the talent that Stephen Strasburg has, thinks. It doesn't matter what talk-radio hosts, who have the same grasp of sports economics that I do of SQL, think. What matters is that the system is set up to deprive amateur players of any leverage, and when one stands up to that system and tries to make the best possible deal for himself, he shouldn't be excoriated, or labeled as greedy, or derided as "unproven." He should be regarded as a man negotiating a contract, making the same choices we all make, taking the risks involved in going right up to a deadline without blinking. It's his livelihood and his talent on the line, and no one gets to decide for him what "enough" is, not when there may never be any chance to get back to the table and ask for more.
Joe Sheehan is an author of Baseball Prospectus.
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Hear, hear!