If
you pay close attention to baseball’s annual amateur draft, then you are
probably aware of the dynamic changes that have occurred in draft strategy over
the years. Under the old system, teams
would get plenty of compensation picks and had no restrictions on how much they
could spend. Eventually, a few teams
(particularly the Toronto Blue Jays) figured out a way to expose this draft
environment and get a leg up on other teams.
Rather than shell out cash in free agency on Type A and Type B free
agents (resulting in a loss of picks), teams held their cash on the open market
and saved if for the draft. Now, before
I get to the next point, there’s a key piece of information I need to introduce
you to:
Amateur
baseball players have been notorious in the past for holding out for the
maximum amount of money. This especially
goes for any player that has not reached their senior year of college. This creates what is referred to in the
industry as “signability concerns.” If a
team doesn’t want to pay the player over the suggested slot value, then the
team missed out on that player and could pick at the same spot again in the
next season’s draft (under the old system).
What
teams like the Blue Jays eventually figured out was that they could actually
target these players and spend big in the draft, which would ensure that they
could receive maximum value for their picks in the draft. This led to farm systems that were absolutely
stacked within a period of a few years (teams like the Blue Jays and Rangers
are consistently ranked among the best farm systems, and this draft strategy is
why).
Well,
here comes the bad news: the new MLB CBA that was agreed to this past winter
completely killed this draft strategy.
Rather than just have suggested slot values, teams had to start dealing
with *actual* slot values. Going
overslot results in a luxury tax, and going 5% or more over slot value results
in the loss of a draft pick the following year. This completely changed the game, because
teams could no longer wait for players with signability concerns to fall to
them. Doing so would result in the loss
of future picks, which makes the old strategy worthless because you can no
longer spend in the draft to stack the farm.
This was rather unfortunate, because while MLB likely put the new system
in place to protect small market teams, it can easily be argued that the new
system really hurts small market teams.
With fewer players leading to comp picks, teams like Tampa Bay can no
longer stockpile picks and then spend overslot to get them.
Baseball
has never been a game where individuals and teams just sit around and wait for
things to happen. A new strategy would
have to be formed in order for teams to stay ahead of the curve. With a new complex system, teams had roughly
six months to figure it out before the draft.
On top of it all, a shorter signing period window gave them even less
time to negotiate deals. With the signing
deadline now behind us, we can look at a few teams and see how they played the
draft. I have six teams with interesting
strategies, although several of them feed into one overlying strategy that will
become obvious as we go through them.
With that, let’s look at our first team, who had what some people could
call a disappointing draft:
Team
1: Pittsburgh Pirates
Total
Number of Picks in First 10 Rounds: 11
Number
of picks signed to date: 7
Primary
strategy: College Players
With
the 8th overall pick in this June’s draft, the Pirates make what is
going to be played as the ballsiest move in the draft. Some people will label their selection of
Stanford RHP Mark Appel as a mistake in philosophy and logic, but that is not
how I view the case. Prior to the draft,
Appel was projected as a top 3 pick (for a long time he was the projected #1
overall pick). This meant that he was
projected to be slotted anywhere from 7.2 million dollars to 5.2 million
dollars (72% of the #1 overall slot). On
draft day, he and his agent Scott Boras watched as Appel slipped all the way to
#8. This spot carried with it a 2.9
million dollar slot bonus, which was 40% of the #1 overall slot and 56% of the
#3 overall slot. Immediately after the
draft in his first interview, Appel talked of his desire to finish his degree
and how much he liked Stanford. Both
were not good signs for the Pirates, and sure enough Appel did not sign by the
deadline and will head back to Stanford for his final year.
Going
back in time a little bit, the Pirates had to have known on draft day that the
chances of signing Appel were small.
Therefore, they would likely take other players who would ask for
overslot payments earlier in the draft to give themselves shots at obtaining
solid talent. Well, in the supplemental
round, the Pirates took another college player.
In fact, the Pirates would wind up choosing eight college players in
their first 11 picks. After the signing
period ended, the Pirates had signed their three high school selections in
rounds two, three, and eight, but failed to sign four of the college players
they selected (disclaimer: college senior did not need to sign by the initial
draft signing deadline). The Pirates lost their first and fourth round
selections. How could this happen? Well, they took players they had little
leverage over, which was especially the case for Appel. Under the new CBA, players with signability
concerns who fall and still have years of collegiate eligibility left will have
very, very little reason to sign with a pro team. After losing out on his projected slot bonus,
Mark Appel would have had no real reason to sign with Pittsburgh unless he felt
that: 1) Next year’s draft class was better and he would fall again or 2) He
would be injured in his senior season at Stanford. After seeing what Pittsburgh failed to do
with their draft, we move onto a team with a similar draft strategy that
executed it much better.
Team
2: Minnesota Twins
Total
Number of Picks in First 10 Rounds: 13
Number
of picks signed to date: 11
Primary
strategy: College Players
The
Twins and Pirates had very similar draft strategies. They took college players early and
often. The Twins, however, performed the
strategy much better than Pittsburgh.
With the second overall pick, the Twins selected OF Byron Buxton who was
a high school player from Georgia. With
6.2 million dollars in slot bonus to play around with, the Twins were able to
sign Buxton *under* is projected slot value.
Had they signed Mark Appel, they likely would have gotten a player with
a lower ceiling who wanted more money (undoubtedly Appel would have asked for
above the suggested slot value at the #2 spot).
By signing Buxton under the slot value, they were able to select three
quality players with their three first round supplemental picks and agreed to
contracts with them all. Knowing this,
the Twins took their second pair of high school players in rounds six and
seven. The way the system works, teams
get a pool of money to spend on their picks in the top ten rounds. This means they could give it all to one
player or spend it evenly on all of their players. With the extra money from Buxton’s agreement,
the Twins were able to up their offers to their supplemental picks while
creating the ability to take more risks towards the bottom of the round. While they eventually could not agree with
their sixth round pick, the Twins got their top eight picks with little worry
about losing any of them. If they
eventually sign their 9th round pick (a college senior), then they
will have had a great draft with how they distributed their bonus pool.
Team
3: San Diego Padres
Total
Number of Picks in First 10 Rounds: 14
Number
of picks signed to date: 14
Primary
strategy: College Players
The
Padres and their “sister team” (just a phrase I’m going to use for teams with
similar strategies) the Astros played the draft extremely well. The one trend you’ll find from the Padres and
the three teams that follow is that everyone signs (except for one college
senior with Houston, who will likely sign).
The Padres had three supplemental picks paired with their first round
pick, and they spent three of those selections on high school players. As you have probably already noticed, the
Padres signed *every single one* of their draft picks between rounds one and
ten. By taking high ceiling players
early and multiple college seniors between rounds two and ten, the Padres were
able to distribute their money very evenly.
While I could explain it now, I’ll wait and explain the college senior
strategy when we get to our final team (the team that played the draft system
the best). Since the Padres have a very
similar strategy to their sister team, I’ll move on to that team now.
Team
4: Houston Astros
Total
Number of Picks in First 10 Rounds: 11
Number
of picks signed to date: 10
Primary
strategy: College Players
There
was much praise for the Astros following their draft. They took several high ceiling players early
and signed them all. With the first
overall pick, the Astros grabbed SS Carlos Correa, who some scouts think
reminds them of a young Alex Rodriguez.
Hold on…a young A-Rod going first overall who has all of his college
eligibility left certainly would demand a ton, right? Wrong.
Correa, much like the #2 overall pick Byron Buxton, signed
underslot. The Astros then spent their
only supplemental first round pick on HS right hander Lance McCullers, who was
believed to be headed to college with little hope of signing. The Astros went way over the slot value for
McCullers (in fact, they doubled it with their agreement) and signed the right
hander away from his commitment to the University of Florida. The Astros would go on to take high schoolers
in rounds four and six and were able to also use a similar strategy to lure
them away from their college commitments.
They spent a value nearly exactly equal to their bonus pool and will
walk away with a minimum of 10 of their first 11 picks while almost doubling up
on their agreement with McCullers. Next,
we’re going to move onto two teams who played the draft very well by signing
high ceiling HS players early and multiple college players late.
Team
5: Chicago Cubs
Total
Number of Picks in First 10 Rounds: 12
Number
of picks signed to date: 12
Primary
strategy: High School Players
The
new regime in Chicago made it known publicly that they were not big fans of the
changed draft rules. As one of the
biggest exploiters of the old draft system, Theo Epstein had to quickly change
gears to figure out how to best attack the draft. After looking at what the Cubs did, it’s
obvious that they picked up on it quickly.
The Cubs selected five high school players with their first seven picks,
and not once did they really have apparent worries about being unable to sign a
player. While negotiating with first
round pick Albert Almora and his agent Scott Boras took a while, the Cubs spent
just under their bonus pool and agreed to all of their picks in the top ten
rounds. Their sister team, the Toronto Blue
Jays, took things a step further and played the draft as perfectly as anyone
can play it. Rather than talk about my
own team more, I want to talk about the Blue Jays and just how well they
executed this draft.
Team
6: Toronto Blue Jays
Total
Number of Picks in First 10 Rounds: 14
Number
of picks signed to date: 14
Primary
strategy: High School Players
If
you want to see the beauty in the execution of the business theory surrounding
baseball operations, look no further than Toronto. They seemingly do everything well: they trade
for low-risk, high-reward players like Jose Bautista, Edwin Encarnacion, and
Colby Rasmus (and then extend them for well below market value). Then they move poor contracts like Vernon
Wells for whatever anyone is willing to give them. Along with that, they limit themselves to contracts
of a maximum five years as to not suffer long-term burns. To put the icing on the cake, they go out and
own the draft as they consistently have top ranked drafts and top ranked farm
systems. This year was absolutely no
different. With two first round picks
and three first round supplemental picks, the Blue Jays found themselves with
14 picks in the top 10 rounds and five picks in the first 60 (so they were
picking once every 12 players, essentially).
Six of their first seven picks were high school players and their final
seven players were all college players (the majority of them seniors). Now I will explain why this strategy is so
genius:
When
a college senior decides to enter the draft, he is committing to the next part
of his life. There is no college
eligibility left, and the only alternative to signing with a team is playing in
an independent or international league. Therefore,
he lacks the one thing that players with signability concerns have a ton of:
leverage. By picking college seniors
with the lower picks in the draft, the team can propose a value at or under
slot. When the player is approached with
this offer, he has very little incentive to decline the offer. Therefore he is likely to accept and more
money from the bonus pool is left over to dish out to players with signability
concerns.
The
Blue Jays took the above strategy and ran with it. With their six months to figure everything
out, they scouted the necessary players (they have a monstrous scouting
department and more regional scouts than any other team) and signed every
single player they made an offer to.
They agreed with all of their college seniors and all of their super
high-ceiling high school players. If
there is a team that had a best draft, it is very likely Toronto (especially if
you are focusing on team strategy).
With
all of these teams analyzed, it should be pretty clear what mistakes were made
by teams like Pittsburgh. When you don’t
create enough leverage for yourself lower in the draft, you lose the ability to
sign your top players. Now, in the case
of Pittsburgh, they would have had to take college seniors with almost all of
their picks in order to sign Appel, and it’s simply not worth the loss in
high-ceiling players to meet his demands.
In the future, expect a lot of teams to follow the precedent set by Alex
Anthopolous and Theo Epstein. You should
also expect even fewer high school players to sign if they get picked much
below the 3rd round. There
are not going to be any more Dillon Maples 14th round signings that
go for multiple millions in signing bonuses.
As unfortunate as it is, this is going to have to be how teams play the
draft for now. It’s the easiest way to beat
a system that just shouldn’t exist in the first place.
No comments:
Post a Comment