April 5, 2001

The Imbalance Sheet

Drew Henson

by Keith Law

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Two weeks ago, the Cincinnati Reds undid perhaps the best part of last July's trade in which they sent a broken-down Denny Neagle to the Yankees for four prospects, one of which was erstwhile college football star Drew Henson. Henson's situation illustrates a problem far more important for competitive balance than disparities in the free-agent market: the vast differences in amateur and international signing budgets.

Several factors here made the Henson situation unique, so drawing broader conclusions from it may not be as valuable as we'd think. One is that Henson had first-round, if not #1, potential for the 2002 NFL draft, so his financial leverage was significantly greater than most minor-league prospects have. Another is that Henson was apparently willing to turn down a contract from the Reds that, if it came from the Yankees, he would have accepted. Those two factors combined to lead the Reds to believe that they had no choice but to trade him.

Although the Reds clearly lost some leverage here, they made a huge blunder in their deal with the Yankees by acquiring failed bonus baby Wily Mo Pena. Not only has Pena shown almost no ability to hit in the minor leagues, but his ludicrous contract requires him to be on the major-league roster next year or be exposed to waivers. Granted, the Reds have shown a predilection for players who don't hit by trading for or signing Donnie Sadler, Wilton Guerrero, and Deion Sanders, but trading a player of Henson's caliber along with a useful fourth outfielder in Michael Coleman and getting a total zero like Pena is unacceptable.

The Reds did have an alternative, which was to let Henson walk. Had Henson decided to play football, the Reds would have retained his rights in the baseball world, they'd still have Michael Coleman (who alone is more valuable than Pena), and they wouldn't have handed the Yankees a potential future All-Star. They could have also tried to deal Henson elsewhere, perhaps seeing if the Mets or Indians would offer Henson a package that would have coaxed him out of a football career, although it is conceivable that they determined that Henson was only going to play for the Yankees.

Several readers wrote to suggest that the Henson contract is more proof that the Yankees can merely throw money against the prospect wall (or prospects against the money wall) and see what sticks, whereas other teams must be more judicious with their amateur and undrafted free-agent signings. Although this is true, it's less of a large-market/small-market problem as it is a Yankees/everyone else problem, since the Yanks have been more aggressive in signing these players than most teams. Regardless, New York's track record in this department isn't strong, as only Orlando Hernandez has paid off so far, with Adrian Hernandez probably on his way as well. They've been as successful with cheap finds like Deivi Mendez as they have with million-dollar signings like Jackson Melian.

However, let us presume for a moment that, given enough time, the efforts of the Yankees and Dodgers in signing international free agents to big-money contracts does result in a decrease in competitive balance. (This seems to be a rational assumption, since international free agents are rarely signed in secret, leading to open bidding contests, and since they are frequently younger than U.S. free agents and thus more likely to produce positive returns on investment over the lives of their contracts.) One simple solution would be to require major-league teams to place free-agent signings with contracts above a specific annual or total value directly on the 40-man roster, or to create a limited number of slots for such players. Although this would slightly dampen the salaries of some of these players by limiting demand from teams whose slots are already filled, it would be far less damaging to those players than folding them into the draft would.

Meanwhile, I don't see the Henson situation as the fourth sign of the baseball apocalypse. Right now, he looks like a pretty good prospect. He also has just 54 walks in more than 650 minor-league plate appearances, and he has missed a lot of development time by focusing some of his energies on football. He's not a sure thing, and if he doesn't turn into the next Scott Rolen, the Yankees will have poured a lot of money and organizational attention down a toilet.

Keith Law is an author of Baseball Prospectus. You can contact him by clicking here.