Starting 9 – Fixing the MLB draft

Starting 9: Improving the MLB Draft

I’m a huge fan of the MLB draft. I enjoy seeking out talent for each season’s new draft class, finding the hidden gems that will be drafted in the 3rd, 13th, or 20th round and turn into Kyle Seager, Matt Carpenter, or J.D. Martinez (each selected in the mentioned round in 2009). This year’s draft is now done and many teams have signed the majority of their selections (or come to an agreement, that is), so it’s a good time to take a look at the draft and what could be done to potentially improve it into the future!

First – No free agency loss

So, this one comes first because it could be the toughest sell. With a system that has tied free agency to draft pick loss for decades, suddenly removing that disincentive for teams would be a significant change. However, we’re not throwing the baby out with the bath water. Free agency and draft picks would still have a connection – just not a negative one.

There could still be a tie to potentially dropping places in the draft or even losing draft picks due to luxury tax ramifications, but my absolute first move would be to remove any draft pick loss for teams signing a player who received a qualifying offer in free agency. The qualifying offer has severely hurt players in free agency and led to significant mistrust and negative feelings between players and ownership in large part due to teams’ reluctance to lose the draft picks paired with a player who receives a qualifying offer.

I’d like to see the qualifying offer changed quite a bit, but the primary change would be to alter things back so something like the old “tier” system that free agency had, where a team would receive a pair of compensatory picks if they offered at a certain level and were also under the luxury tax, all the way down to a team receiving a compensatory pick after the 5th round if the team is over the luxury tax penalty point and only offers at the 3rd tier of the system of offers I’d have set up.

Second – Slot harder

When the 2012 Collective Bargaining Agreement added in slotting for the first 10 rounds and hard overall limits on draft pools for teams with penalties if teams would spend over that collective amount, the intention was to level the playing field across the game.

For many years, teams who had the financial flexibility within their organization would make significant offers to draft-eligible players to get them to tell other teams not to draft them unless they had a certain number available to sign. That meant teams like the Yankees or Dodgers could draft players in the 4th or 5th round with strong commitments to college and buy them out of their commitment while a team like the Twins or Rays were left without that level of financial strength.

The current slotting system has certainly leveled the playing field among teams where there is no advantage to being a “rich” team or a “poor” team. However, the overall pool has led to oddity for the casual fan of the best players in the draft not being drafted in the first three rounds necessarily and many players in the 6th-10th round are really not more than organizational filler in many cases as most teams use those rounds to draft college seniors with no negotiating leverage in order to get them to take significantly discounted deals and save bonus money to move it around.

To change that system, my proposal would be to set a value for every single pick from the first to the last with a hard slot number. That would take away the gaming of the draft for front offices and players alike. A front office couldn’t pick a player at selection #7 that they thought would sign for less money than the slot in order to save bonus money to use on the #39 pick (for instance). Players couldn’t make money demands for their bonus as they’d be subject to where they were drafted, essentially being able to tell teams, “pick me by the 3rd round, or the money won’t be enough for me to sign.”

This would allow for more real intrigue when a guy is a 38th round draft pick and makes it big, rather than finding out that player actually received more money in bonus than the 5th-10th round picks in that year’s draft for the team, so the team obviously considered him a better player. It would allow teams to have a set number for all their draft picks, which could put more money into the hands of players at the outset of their minor league career when they need the money the most as they toil in unpaid time in extended spring training and fall instructs.

Third – Tradable assets

One of the fallouts of making each pick slotted with a set number would be that each pick would now be more easily valued across the league, which would make putting them into trades much easier.

There are two basic arguments against allowing draft picks to be tradeable. First, the argument that bad teams would trade away many years of top draft picks and end up in a bad cycle for many years, which really puts poor trust in the front offices of the teams across the league.

The second argument is the one that I think hard slotting would solve – valuation of picks. In the NFL, it took Jimmy Johnson’s formula to really start seeing picks move as teams had an idea of the value of picks. In the NBA, trading had been done previously, but recent changes to their slotting have really made draft picks a component of nearly every major trade you see in that league.

Putting a dollar value on the pick would give the pick the value needed to make trades. You want to add to a deal, but can’t settle on a B-level prospect? Knowing that the valuation of a B-level prospect (one ranked in the 100-300 range of prospects in the game) would equate to roughly $4M-$8M in prospect value, per the tremendous study that Craig Edwards did on prospect valuation, a team could feasibly assign that the players being discussed are around a 3rd round pick and utilize that rather than the prospect.

Initially, it could be overwhelming to have every pick through #40 tradeable, and the value of picks after the first 10-15 rounds would be nearly none in a trade, so this could need some boundaries (only picks in the first 10 rounds are tradeable, for instance), but no matter how you spin it, the ability to move picks would add significant intrigue to the draft.

Fourth – CWS coordination

We’re currently in the midst of one of the greatest events in sports every year, the College World Series in Omaha. Leading to this time in Omaha were weeks of playoffs from a field of 64 down to the 8 teams playing in a double-elimination tourney to determine the national champion.

One of the things that absolutely disturbs me as a person and many players I’ve had the chance to talk to over the years is the timing of the draft. Many players are quite literally in the dugout of a playoff game as they await their playoff fate. For those who are hopeful for an early draft slot, that can be very nerve-racking.

That’s also why you only see high school players (and junior college) attending the draft each year!

I’m not just talking about moving the time back, which would definitely be advantageous. I think it would be wise for Major League Baseball to move the MLB draft to Omaha before the College World Series begins.

If MLB were to continue the partnership begun this year with the game played in Omaha in advance of the College World Series and move the draft to the week of the CWS, players would be able to relax, both events could receive more recognition, and players could be involved with their own announcement. Imagine how incredible the feeling would be for a player on one of the best teams in the nation to be able to be present to hear his name called and have his teammates there to support him!

Fifth – Reward success

One of the things that you often hear about is a player who wants “X amount” of dollars, which is an amount that requires him to get an overslot number later in the draft or go to college. A big reason why that’s often a sign that the player is going to college is simply that the teams that succeed have so much less money to work with than those who struggle.

The best comparison this year is the Chicago White Sox and Houston Astros. Chicago selected 3rd in the draft and had no compensatory selections. Houston had all of its typical first 10 selections, but they had the second-best record in the league in 2018. Chicago’s bonus pool in the 2018 draft was $11,565,500 to spend over its first 10 selections. Houston’s bonus pool was less than half that, at $5,355,100.

This is even a bigger mess when you get to a team that has done well but fall just short of the playoffs, like the St. Louis Cardinals, who had their standard 10 draft picks in the first 10 rounds as well, and they had a $6,903,500 bonus pool. This is based largely on the incredible bonus pool numbers allotted to the first few picks of the draft.

The Orioles had a bonus allotment of $8,415,300 for the #1 overall pick. The next two selections were $7 million bonus numbers, the next two picks were $6 million numbers, and the following three choices were $5 million bonuses. That meant that by the time you got to the 9th overall selection in the draft, the draft pool for the pick had dropped $2.5 million (~$8.4M to ~$4.9M). So, you can’t even get out of the top 10 and even be in the same universe financially as the top overall pick in individual slot.

Those who follow other drafts could remark that similar disparities exist in both the NBA and NFL drafts from the first overall pick to the rest of the first round. The issue is that there are 40 rounds in the MLB draft and the players rarely are in the major leagues within even a year of the draft, while in those other two leagues, players are expected to contribute immediately and there are 2 and 7 rounds, respectively.

Currently, MLB drops each slot by roughly 7.5% (with rounding to the nearest 100) in the top 5, then 5% from #6-10, all the way to 2.5% by pick #30. With a more gentle sloping drop, something like 5% through the top 5, 4% 6-10, 3.5% 11-20, 3% 21-30, 2.5% 31-50, and so forth. You would end up with the #30 pick have a bonus of $2.89M, which is over $500K more than the current system. The other end of that system we will explore later.

Sixth – Remove tanking

Part of the reason for “tanking” would be removed when teams lost the ability to manipulate draft funds due to hard slotting. From there, another method to remove the push by teams to lose for higher draft picks or higher draft pools would be to remove some level of incentive.

Many see the need for a lottery system, and while there could be some merit to that, there are enough potential issues there that would still actually encourage tanking that a lottery is not something I’d want to consider. Instead, I’d like to look at other systems that reward those teams who are not performing well.

While I don’t want to see picks removed for free agency, an incentive for “effort” could be there to avoid negative repercussions. For instance, a team that would finish in the bottom 3 for four straight seasons would be in danger of being ineligible for competitive balance picks or free agent compensatory picks.

Another idea would be to do something similar to what has already begun with the luxury tax penalties for teams that are over the luxury tax by an egregious amount. What could be an example would be to have any team that finishes in the bottom 5 records in all MLB for 4 consecutive years to lose 10 places in its first draft pick in the 5th year, 10 places in each of its first two picks in the 6th year, and so forth.

Going back over the last 20 years, that would have been enacted a number of times and really impacted a few organizations. The first time it’d have been enacted in the past 20 years would have been 2005 when the Rays would have had 4 consecutive years previously. The Royals would have been punished with one pick in 2009. The Astros would have been punished in 2016, moving back 10 places and likely costing them Forrest Whitley.

With that sort of punishment in place, the Pirates and Orioles were the only two organizations to go multiple years of punishment, and both would have suffered 3 years of punishment in the early 2010s. The most notable of those years of those would have been the 2011 draft for the Pirates, where they would have had two picks moved back and they had the #1 overall selection and were able to select Gerrit Cole and their second pick would have also been moved back, and that pick was used to select Josh Bell. Losing those two players in the Pirates organization would definitely change things in their organization.

Seventh – Weekend viewing

In moving to Omaha in coordination with the College World Series, Major League Baseball would run into an issue of needing to move off Monday for the start day because, in a number of cases, the final day of games pre-CWS are being played on Monday.

One big reason why the draft doesn’t draw the viewership, at least in the first few rounds, is that while it’s put in primetime on the first day, it’s a Monday night, not a weekend night. The NFL draft and NBA draft have both noted the importance of having their draft in the latter half of the week for viewership.

To ensure all could get to Omaha, having the first 2-3 rounds on Thursday evening would be a huge thing. Most casual fans know enough names to watch that deep into the draft. The serious fans would still be very interested in the 2nd day, which could begin at 2 PM on Friday and go until 9 PM, likely getting through round 15-20. If the draft could get through the first 20 rounds on those first two days, the final 20 rounds could move as they do currently on Saturday, starting in the late morning and be done before the first pitch of the College World Series on Saturday afternoon.

Another time frame that I’ve heard from people before would be to highlight the 1st round only on Wednesday night, then have Thursday be the 2nd through 10th rounds, starting in the late afternoon and continuing through prime time. The draft would then finish off with a big flurry on Friday to get the whole draft done and leave Saturday completely to the CWS.

Eighth – Remove late flyers

I love digging into the draft. I also know that I’m not the norm among baseball fans. When I review the draft, I have hundreds of players that I’ve studied in-depth, and I love tracking those players well into the draft. Add in my own interest in college baseball, and that definitely bleeds into further interest.

I’m not the target market, however, of where the MLB draft needs to be marketed. Rather than focusing on players that won’t sign in the last 10 rounds but were highly-regarded players coming into the draft, teams could do a better job of finding that guy from a small college that could make it or that JuCo player just needing the right development system to unlock his tools.

It makes sense why teams take the higher-ranked players, especially the JuCo and draft-eligible college juniors and sophomores, even if they’re unlikely to sign. The provisions in the draft rules state that any player who is eligible and goes undrafted then becomes a free agent and could then sign with any club. That has recently happened in the case of TJ Friedl, now in the Cincinnati Reds organization. For unknown reasons, many teams were unaware that he was draft eligible as a sophomore, and after the draft, the Reds had enough room in their draft pool to make an offer to Friedl at around a 5th round slot level and sign him. While not a superstar prospect, he’s certainly an organizational top-30 sort of guy, which is a pretty positive thing from an undrafted player.

Teams don’t want to be left looking “dumb” for missing out like that, so they make sure to draft every draft-eligible junior and sophomore of note, rather than scouring for that unknown talent. One of my favorite Atlanta Braves stories in the last decade was Brandon Beachy, an undrafted pitcher from Indiana Wesleyan that the Braves signed and saw reach the majors for 141 2/3 innings just 3 years later. This weekend saw the call-up of Mike Brosseau by the Rays. He was undrafted out of Oakland University in Michigan in 2016 and already made it to the majors.

Guys like that are out there who are more than just organization filler, but often the focus to keep certain players away from other teams ends up dominating the final 10-15 picks of the draft for each team, rather than really pushing their scouting department to find gems.

Ninth – Money, money, money

Changing the way money flows in the draft with hard slotting and eased slot differential would definitely make the draft focus change to talent, but in the end, many players are making their decision on dollars and cents. A hard slot would help that decision for sure, and easing the signing bonus structure to allow players further down the draft to have a bit more of the pie would also help.

The biggest issue for the MLB draft over the NBA draft or NFL draft is that a player taken in the MLB draft is not going to be playing at the highest level immediately. In fact, even the best players take over a year to make it to the major leagues. Typically, a player will spend 3-5 years in the minor leagues to make it to the major leagues, if they ever make it, and right now, Minor League Baseball has a serious pay issue.

Players signing for a $10,000 bonus to help a team’s draft pool are all well and good to fans, but think about that for the player. Let’s say he’s a 4th-year college senior with a degree, just for argument’s sake. He gets $10,000 upfront, some of which goes to the person who negotiated his deal, now officially able to be called his agent. A good chunk of that one-time money will go to taxes, depending on his state of employment.

From there, the player would spend the next two months playing at the advanced rookie level that is paying $2,000 per month as one of the better-paying minor league organizations. He will make $4,000 for his two months of play, then the team asks him to come to fall instructional league for a month. While the team facility use is free, he’s not paid for his time at fall instructs. At the end of instructs, he’s handed a workout program to have completed four months later when he arrives for spring training.

He lives at home with his parents and works retail due to not being able to find anything, even with his degree, that will take him on just for four months. At $12/hr, he’s making roughly $6,500 in those four months, barely squeezing in workouts. He gets to spring training and his lack of workouts is evident, and he’s held in extended spring when the season starts, staying at his team’s facility working out with team officials until mid-May, three months later, all of which is unpaid time.

He’s sent out to low class-A ball, where his organization pays $3,500 per month. He is there until early-August when he earns a promotion to high-A and $4,500 per month for the last month of the season. He spends another month in fall instructs, leaving with an offseason workout program and just over $13,000 in gross pay from mid-February to mid-October, but no bonus this year to add onto it. He heads home determined to show he’s ready for better things and not to show up in the shape he did last season, so he digs into his workouts, only able to work his retail job half-time, so making just $3,250 over the winter, meaning when he heads off to spring training for his second full year of professional baseball, he’d have made just over $16,000 over the previous year.

With the gradual slotting mentioned earlier, I’d also stop slotting by pick at either pick #200 or the end of the 6th round, whichever comes first. The 200th pick has been in the early 7th round ever since the changes in competitive balance picks and draft compensation picks in the 2012 CBA, but with some of the other changes we’re discussing, that could lead to the pick coming earlier at times.

The gradual slotting has percentage decreases stopping at 1% at that point, and then I believe it’d be suitable to do the same bonus for every player in a particular round. For instance, all players in the 7th round would receive $185,000, all players in the 8th round $180,000, all selections in the 9th round $175,000, and so forth.

This would give all draftees a better cushion to start with, and until MLB can figure out how to better pay its minor leaguers, it’d make pursuing the dream of baseball something more feasible for those 1,200+ players chosen every year in the MLB draft!

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