THE BOOK--Playing The Percentages In Baseball

Tuesday, November 29, 2011

At what point will baseball prospects leave baseball?

Matt makes the point that even with the draft pick cap limits, baseball prospects in high school will still choose baseball, because it’s the best game in town.  But, at what point would they actually start to leave?  How low a signing bonus would you have until baseball is shunned as an option?

The idea of “signing bonuses” is interesting, because that doesn’t exist in the NHL.  The reason you don’t need a signing bonus with NBA or NFL is that you are signing a major league contract right away and playing in the majors right away.  The NHL is setup like MLB, with minor leagues.  So, you are actually signing a two-way deal, like MLB would.

The NHL has a rookie cap at just under a million$, and is stuck there at 3 years (so the most you can sign is a 3 year 3MM$ deal from your draft, as long as you make it to the pros, with some bonuses, that used to be easy to attain, but they clamped down on that).  NHL 18-yr old prospects also have nowhere else to go.  There’s no such thing as a big-business college hockey, and the cost of education in Canada is far lower than it is in USA, so scholarships don’t have as much value.

So, signing bonuses exist in MLB as some sort of incentive to push you toward MLB, and away from college.  But the reality is that MLB can have no signing bonuses whatsoever, effectively making all the high school players choose college instead, and wait to draft players after college… and then have no signing bonuses at all… just like the NHL.

What would happen here?  Would Bryce Harper and the Upton boys choose football instead?  And when they graduate college, prefer NFL to MLB?

And even if all that did happen, how many players are we talking about?  1% of the star players?  5% even?  No one is going to notice that MLB doesn’t have all the best players in North America if 5% of them intentionally “pre-retire”.

So, why not simply do away with signing bonuses completely?

Let’s go even further.  We’ve established that a 1MM$ or 2MM$ signing bonus, or no signing bonus at all, will barely affect the talent pool eventually entering MLB.  What if the prospects themselves have to PAY TO GET INTO MLB?

If MLB provides access to so much future money to these players, and if these players really have nowhere else to go, how much would they be willing to pay to register to get drafted?  It’s no different from college, right?  I had to pay to go to school, as it was a gateway to getting a job in the real world.

What if MLB had baseball academies that you had to pay to get into?  (That is basically what each team’s minor league is.)

And you can go even further: what if a player, rather than paying, agrees to give up 50% of his first year salary (if he makes it that far), or 5% of his lifetime earnings?

Here’s my challenge to you: start with a clean slate.  Blow up everything you even thought of regarding MLB and its draft.  Explain to me the impact of having no signing bonuses at all (like NHL).  And explain to me the impact of making players pay (like NBA and NFL effectively are making them do by making them go to college).

Teach me.