For Draft investment, sky should be the limit
When the owners and players negotiated the new Collective Bargaining Agreement, which went into effect in December 2011, they made several changes to the First-Year Player Draft. Most of these have been for the better.
Establishing an earlier signing deadline has produced quicker deals and allows almost every draftee to begin his pro career during the summer he was selected. Streamlining free-agent compensation cut back on what had been an excessive number of selections awarded, now wisely basing them on players gained as well as lost and eliminating an archaic ratings system that grossly overvalued relievers. Creating competitive-balance picks was a step toward leveling the playing field between small-revenue and high-revenue clubs.
However, the biggest change to the rules will not be a positive one in the long run. Teams now are allocated a specific dollar amount they can spend on bonuses in the first 10 rounds, and exceeding that limit by as little as 5 percent would trigger the loss of a future first-round pick as well as a 75 percent tax on the overage. Blowing past its bonus pool by 15 percent would cost a team two first-rounders and a 100 percent tax.
In two years under the new rules, no club has dared give up a future Draft pick. And though teams have the freedom to do so, I have yet to encounter a club official or scouting director who thinks that ever will happen.
Though the industry spends more than $200 million annually on unproven amateurs in the Draft, it's still far and away the most cost-effective way to build a club. That's why, if I could alter one thing about the Draft, I would abolish any limits and let teams invest as much money as they wanted.
Jonathan Mayo would allow teams to trade picks, which the new CBA provides for in limited fashion with the competitive-balance selections. That would make the Draft more interesting, to be sure, but my change would make the game better by giving smaller-revenue teams a better chance to compete.
Under previous CBAs, clubs could spend whatever they wanted on the Draft. Major League Baseball instituted an informal slotting process in 2000, recommending below-market-value bonuses for each choice in the first five rounds and a maximum for later selections. But if teams submitted to a tedious vetting process and were willing to ignore political pressure from MLB, they ultimately could do as they wished.
During the 2007-11 Drafts -- which fell under the previous CBA -- no club spent more on bonuses than the Pirates, who handed out $52.1 million. Interestingly, Pittsburgh's club president is Frank Coonelly, who in his previous job as an MLB vice president had overseen the informal slotting system and tried to clamp down on bonuses.
Those Draft expenditures helped the Pirates finally end a North American major sports franchise ecord of 20 consecutive losing years and return to the playoffs last season for the first time since 1992. Pittsburgh's two biggest Draft investments, Gerrit Cole ($8 million bonus) and Pedro Alvarez ($6.35 million Major League contract), played key roles. The Bucs also used Draft picks to swing trades for the likes of Marlon Byrd, Justin Morneau and Wandy Rodriguez, and to build their farm system into one of baseball's strongest.
The Nationals ranked second in 2007-11 Draft bonus spending, at $51.1 million, and if guaranteed salaries in big league deals are included, they outspent the Pirates. After a 15-year period in which the franchise posted two winning records and finished an average of 25 games out of first place, Washington led MLB with 98 victories in 2012 and recovered from a slow start to win 86 times in 2013. That wouldn't have happened without Stephen Strasburg ($15.1 million Major League contract) and Bryce Harper ($9.9 million big league deal), and the Nats have parlayed over-slot signings into trades for Doug Fister, Gio Gonzalez and Denard Span.
The Royals came in third in 2007-11 Draft bonus spending, at $45.2 million, and they've experienced a turnaround as well. Kansas City won 86 games last season, its most since 1989. The Royals landed their best hitter via the Draft in Eric Hosmer ($6 million bonus) and acquired their top pitcher, James Shields, for a four-player package built around former third-round pick Wil Myers ($2 million bonus).
If the Pirates, Nationals and Royals hadn't invested heavily in the Draft, they'd likely still be languishing near the bottom of their divisions. Taking away their ability, and that of other smaller-revenue clubs, to spend as they see fit on the Draft isn't in baseball's best interests.