THE BOOK--Playing The Percentages In Baseball

Excellent point!

(Filler here to get my comment accepted)

Even if that is the intention of the team (to draft a player who should receive a very low bonus), the agent holds all of the power in this scenario. Why would he allow his client to sign cheaply when he holds the trump card? If his client doesn’t sign, the team can no longer allocate that money anywhere. I think in practice this will be a de facto hard slotting system.

Jeff:

If you read Moneyball, it seems that teams talk to the potential draftees before they are drafted, and get assurances of deals in place (this shocked me when I read it, and I can’t believe this is as common a practice as Lewis made it out to be; or that no one has batted an eye on this for a decade).

So, some kid who is a 20th round prospect, and was expecting to get 50K, is now being told that he will be picked in the 2nd round, if he agrees to 100K.  What do you think the kid will say?  “No, I want 1MM$, because that’s what the slot allocation is?”

@3:

I could certainly see that happening which would put the team in a tough predicament: sign the player for the slot figure or lose the money entirely. The agent really doesn’t have any reason not to play hard ball.

Jim Callis had a note addressing pre-draft deals in his latest CBA update (http://www.baseballamerica.com/blog/draft/2011/11/more-draft-details-from-the-cba/):

“Any attempt to circumvent the draft cap, such as an under-the-table agreement, is expressly prohibited.”

I don’t know whether that will be enforceable, but it seems that the MLB is trying to eliminate them.

#4 continued:

Reading that note again, I may have misinterpreted what it’s prohibiting. I took “under-the-table” to mean pre-draft handshake agreements, but it could be addressing a literal under-the-table supplemental payment.

Jeff: you really think that a kid, expected to go in the 20th round, and expected to make 50K, will play hardball because he got picked in the 2nd round and offered 100K?  Because his agent is telling him that the team wants to use that 900K of extra allocation to the 1st rounder, and they can only use that 900K if he signs for 100K?  That the kid will try to get to 200K or 300K?

If that’s the case, then they’ll pick a kid with 50th round potential.

By the way, to block this circumvention, all you have to do is make sure that the floor for signing any player is 50% of the allocation money.  That at least forces you to make a semi good-faith effort at signing a decent player, and not have too much underallocation.

Unless the player has no other options (a college senior, for example), I do think that’s what will happen. If a kid is drafted in the second round, I have a hard time believing he will be content to get paid as if he were drafted where his talent dictated. Vanity and leverage will be huge factors in the negotiations.

We also need to see which picks will be insured. If compensation is rewarded for all ten rounds, that gives the team the ability to call the draftee’s bluff without the risk of losing a prospect for good.

Jeremy Brown got 350,000$ as a signing bonus, drafted 35th overall, by the A’s.  That was way below slot. 

I don’t know where he was ranked, but presumably he was ranked somewhere where he would have signed for say 300K, and he got a tip to sign at 350, in return for being selected so high.

There’s just no way a kid is going to do what you are suggesting.

Hmmmm… maybe I’m wrong.  Reading Moneyball, we see that Brown would have been a late-round signing at best.  Whatever that is, sounds like a 50K player.

Then again, the A’s (Beane anyway) actually wanted Brown, not as some sort of filler player.

So, maybe the late-round player is going to get 150K, or 200K.

The key difference is that Jeremy Brown didn’t have the power to subtract money from the A’s spending cap by not signing. If he tried to play hardball for the recommended slot figure, the A’s would have just moved on and put that money elsewhere. I think that’s going to be a powerful weapon.

We’ll certainly see how it plays out in practice. Your method would have certainly been implemented without this clause.

I agree with Jeff that this will end up being a defacto hard-slotting system.

Even if you have Stephen Strasburg come along, what’s he going to do?  The Nationals are going to sign every pick at rounds 2 through 10 for slot money.  And then they go to Strasburg and tell them they don’t have anything left other than slot money.  They can go over slot, but it will be mighty pricey in terms of future penalties.  The Nats stick to their guns, and Strasburg has zero leverage.

Prior to the 2010 Draft, Hayden Simpson was ranked 191st by Baseball America. He was seen as a 5th round talent. Based on what other guys signed for near the 191st pick, his slot would have been about $125,000. He was picked 16th overall in the draft by the Cubs and signed for just over $1 million. It was well below slot (about half a million if I recall correctly), but if you draft a guy who was worth $50,000, it’s going to cost you a lot more to sign him if you pick him in the 1st round. Tyler Colvin is another example. He signed for below slot, but was ranked around 150th. He still signed for more than $1 million. This year the Giants took the 66th ranked prospect with the 29th overall pick. Slot for 66th is about $500K. He signed for $1.1 million. Also this past season the Dodgers 16th overall pick was signed for $1.6 million. He wasn’t even ranked in BA’s top 200.

If a team takes a 20th round pick in the 1st round, they’re going to pay him near 1st round money. It’s happened time and again.

I think this is essentially a hard cap, but I also think there will be the occasional player that teams view as worthy of going over slot and paying penalties. I think Strasburg is that type of player.

I think the biggest difference is that players will now be picked where they are worthy of being chosen. Every year top talent falls not just into the 2nd or 3rd round, but much further. This year Dillon Maples fell to the 14th round. He signed for over $2 million. That won’t happen now. Guys like that will be picked in the 1st round. The only time I think that may not be true is if there’s a guy like Sonny Gray. He was drafted this past June, but a few years ago coming out of high school he was seen as a 1st round talent (late first), but he had sent a letter to all 30 teams telling them not to draft him. He was not going to sign. The Cubs eventually drafted him in the later rounds and were unable to sign him. If teams have reason to believe a guy has no interest in signing he won’t even be drafted now. You can’t spend more than $100K on a pick after the 10th round.

@ David, 14

The problem though is that there will be more 7 figure talents than there will be 7 figure slot figures. Dillon Maples is a good prospect, but on talent alone, he would not have been a first rounder. He would probably be at North Carolina if this system were in place last year.

I’m sure the owners hope that these prep draftees will lower their demand to forgo college, but I think that’s wishful thinking.

It certainly will be interesting to see how things play out in June.

I don’t see why the Nats would pay Strasburg.  If they don’t sign him, he goes back into the pool, and he’s going to be offered the same max deal.  This is the point of the max deals, that all the leverage is gone.

There’s no “worth it” any more.  It’s all pretty much hard-slotted.

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As for the other guys you are talking about: isn’t it possible that the teams and players valued themselves properly there? 

I think the Jeremy Brown is the most instructive, that he got well below slot, but also much above what he’d get from anyone else.  I don’t know what slot was for him, but let’s say it was 1.5MM$, and his actual value was 0.05MM$, and he signed for 0.35MM$.  So, about a 75/25 split in terms of where to meet (in favor of the team).

So, if someone is worth 0.5MM, and the slot is 2MM, then expect that guy to sign for a bit under 1MM$.

Tango, while it’s certainly possible the rankings missed on those guys, it happens every year. Each year in the draft there is at least one guy taken in the first round who every single scouting report says he’s a 3rd, 4th or 5th round talent. The reason the Cubs chose Tyler Colvin in 2006 was so they could go over slot later. The reason they took Hayden Simpson was so that they could also go over slot later on and they did both times.

Keep in mind that teams had to offer reasonable contracts within a certain number of days (14?). They couldn’t just offer $1 and call it quits. This is why 50th round talents taken in the 1st round are always going to get 1st to 2nd round money. It will be under slot and that’s why teams take 5th rounders in the 1st on occasion. Jeremy Brown received late 2nd round money with the 35th pick. The A’s had 7 first round picks that year and went cheap on that pick to allow them to sign other players. Brown was also not a guy slotted to make about $300K. He wasn’t even one of the top 25 catching prospects in the draft that season. He was probably closer to a 5th round talent.

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The reason Strasburg may be worth it is because he’s a unique talent. You’re right, he goes back into the draft if he doesn’t sign, but the Nationals won’t be picking him. Strasburg would go first overall the next draft and then the Nationals would pick second. So the Nationals, if they had stuck with a slot offer with Strasburg, would have lost him. What’s that worth? You saw the crazy projections for him. Is Strasburg the kind of player that teams would give up next year’s first round pick to sign? I think he might be.

This kind of misses the point because Strasburg is unlike most everyone in the draft. Once in awhile a talent like that becomes available so most years, yeah, it’s a hard slot, but I believe we will see a team or two give up their first and maybe even first and second round picks to sign a guy like Strasburg in the future.

"Dillon Maples is a good prospect, but on talent alone, he would not have been a first rounder. He would probably be at North Carolina if this system were in place last year.”

That might be part of the plan.  Teams collectively could save a lot of money if every 18 year old went into college instead of rookie ball.  The effect at the major league level would be minimal.  Justin Upton and Mike Trout wouldn’t be making teenage debuts anymore, but players who do that are extremely rare anyway.

If everyone (or at least a great many more players than do now) went to college teams could eliminate a few levels of minor league baseball.

Rally, as someone who has scouted college baseball I can tell you that a) it is not a good system for developing pro players, and b) teams would rather have these high school kids in their own system at such a young age.  More development time = more time to imprint your own philosophies.

Rally & Brent,

I’m not sure how much input the baseball people had in the push for hard slotting. It seems to me that the owners wanted a way to cut costs and didn’t care much about how it may affect the talent level of the minor leagues. I would bet that all of the baseball people within an organization would agree with Brent.

As for how they will develop, we really cannot say which is better and which is worse. They’re clearly different as they have different goals; some will excel at college while others would have been better off in pro ball.

One thing that could be a problem is if a significant amount of HS players do start fulfilling their college commitment, that will reduce the opportunity for the less heralded recruits. They may flounder on a college bench behind a premier recruit whereas under the current system they would have the opportunity to emerge into a draftable talent.

Excellent point regarding the less heralded recruits.  As a result, they might transfer to lesser known schools to get more PT…