DRAFT NOTEBOOK
By David Rawnsley
August 17, 2007

Draft Slotting Process Flawed

Now that all the players have either been signed or returned to school, it’s a good time to get a perspective on the 2007 draft—specifically, how the new rules and recommendations laid down by the commissioner’s office impacted this draft and could impact future drafts.

 

The Deadline

 

There is no doubt that the Aug. 15 signing deadline was a big positive. Yes, it was probably a big headache the last week for most scouting directors as they came off a long summer on the road to grind out negotiations. But it gave a structure to the whole process; for many draft picks, it was simply a forgone and relatively stress-free conclusion that they would sit out the summer. It prevented the sometimes absurd and completely unnecessary ploy of a player actually going to a college campus and pretending he was going to class.

 

A signing deadline was talked about in scouting director meetings as far back as the early 1990s. It’s hard to say why it was never enacted before but it seems so obvious now that the industry has gone through a summer with it that everyone should be kicking themselves. Don’t be surprised if there is talk of an even earlier signing deadline—something in the July 15-25 range would still give teams/agents/players a chance to do the money dance for 6-7 weeks, but would also enable players to sign and potentially get out for their first year, along with giving colleges more certainty about who they will have coming to school to play.

 

The Slotting System

 

The slotting system had its intended effect the first few years the commissioner’s office started using it; signing bonuses were moving down and teams were being forced to at least think about reigning in the amount of money they were spending on amateur players and being at least somewhat accountable.

 

Like a gambler on a drawn out winning streak though, the commissioner’s office got too greedy and instead of acknowledging its gains and taking a look at where they had come from and where they wanted to be, they went for the big win. And they lost.

 

The first major flaw in the commissioner’s office’s approach, one that has existed since the slotting system’s inception, is the secrecy about the numbers. They are literally given to the clubs right before the draft, meaning that all the conversations between the clubs and the players/advisors during the spring are based on assumptions and guesses. It’s like a vendor going negotiating to sell a number of brands at a grocery store, then telling the grocery store manager that he’ll give him the exact prices when he delivers them the next week.

 

Although there had been rumors about it all spring, the commissioner’s office decided to reduce the recommended slots by 10 percent and gave those numbers to the clubs barely hours before the draft, putting the clubs and their scouts in a very difficult position in their relationships with the players/parents/advisors.

 

The second major flaw in the slotting for the 2007 draft was simply the audacity to mandate a 10 percent cut at a time when industry revenues were growing rapidly and baseball as a whole was in a state of financial euphoria (see the big league contracts given out last winter if you think this is an overstatement). Any business person in any business knows you just can’t do this; ask your employees (or in this case potential employees) to take a significant cut in pay and/or benefits during a financial boom time. 

 

The most common reaction of the agents/advisors when the 10 percent news came out was simply, “You’ve got to be kidding!?” Agents, after all, are basically businessmen. As negotiations played out, especially over the weeks leading up to the deadline, the most common negotiating ground seemed to be “just pay us the 2006 slot.” Who knows, maybe that was the goal of the commissioner’s office all along: present such an ill-tasting plan that the old bonus levels were acceptable.

 

The third flaw was to assume a position of authority on a distasteful decision without any potential consequences for those who didn’t toe the line. I wonder if any of the architects of the slotting system are parents. It’s Parenting 101 that if you are going to tell your kid to do something that they don’t want to do or wouldn’t do on their own, there have to be consequences if they don’t do it. Spanking, grounding, chores—you name it, but there has to be a disincentive/consequence in place that both kid and parent know is there. 

 

If the parent was the commissioner’s office and there were 30 kids running around, those kids pretty much knew there would be no spanking if they spent too much of their allowance.

 

The 2007 Draft Class

 

It was a coincidence, but the fact that the 2007 class was one of the most talented and deepest in draft history played a major impact on the number of “above-slot” bonuses given out. 

 

One thing you always hear scouts saying is that they don’t mind paying talented prospects good money to enter professional baseball, but what they hate to do is pay a player who they don’t think has the talent to warrant the investment. What you had in 2007 was a very deep class with far more players, let’s say, that were top two round talents than there were actual top two round picks. You saw so many players like Bradley Suttle or Carmen Angelini or Casey Crosby or David Mailman or Cale Iorg getting top-round money in later rounds because they really had that type of talent.

 

What it took on the part of many teams was simply the commitment and foresight to say, “Hey, this is a great draft class, there are going to be a ton of players who have the talent to be top-round picks who are going to slide. Let’s spend the money and sign some of these players.” 

 

It happened and I personally commend the teams that decided to go that direction. Two things you have to remember when you are weighing the best interests of, for example, the Detroit Tigers, vs. the best interests of the commissioner’s office. One, it’s the Tigers’ money, and two, the commissioner’s office doesn’t have a won-loss record.

 

The Teams

 

Most teams, in the end, seem to have followed the path that acknowledged the 10 percent slot reduction was absurd and non-binding but we’ll try to fit in as much as possible and not draw too much heat. Five teams, though, looked like they had a different idea from the beginning.

 

New York Yankees: Big surprise here. The Yankees picked the best player on the board in terms of talent without regard to signability in most cases and figured out who wanted to sign and for what after the fact. There were definitely some teams who felt that Suttle ($1.3 million/4^th round) and Angelini ($1 million/10^th round) were top two-round talents now and I know I felt strongly that Angelini was definitely the type who would emerge as a first-rounder in 2010 had he gone to Rice.

 

The curious Yankee signee, of course, is Andrew Brackman and his huge big league contract at the end of the first round despite upcoming Tommy John surgery and his short pitching resume. Don’t forget though, the two huge successes of the Yankees 2006 draft. Joba Chamberlain went from being a potential top 10 pick (like Brackman) to a big uncertainty before the draft; now he has rock star status in New York ’s bullpen. Ian Kennedy was perhaps the most maligned of the 2006 first rounders, but he’s dominating Triple-A a year later and could join Chamberlain in the big leagues any day.

 

Boston Red Sox: The Red Sox and Yankees mimicked each other in their draft approach, taking talented players all the way down the list based on talent, not signability. They were much more budget-conscious because they didn’t have a first-round pick and they mixed in a couple of seniors early, but the net effect was the same and the talk in the scouting community all summer was how Boston was going to do real-money deals with lower picks late in the summer.

 

Detroit Tigers: I said it on ESPN on draft day and I’ll say it again now; the Tigers selection of Rick Porcello was a stroke of genius and a perfect move for a franchise that undoubtedly feels that it deserves this type of pick. Signing Cale Iorg for mid first-round money, which is just about what he would have likely received in the 2008 draft, was icing on the cake.

 

In the last four years, the Tigers have picked Justin Verlander, Cameron Maybin, Andrew Miller and Rick Porcello in the first round. Without looking, how much money have they spent “above slot” on those four picks? Does anyone really care? It’s probably about the cost of having Miguel Batista or Adam Eaton as your 3-4 starters for one year.

 

Washington Nationals: Does anyone begrudge the Nationals their right to give Jack McGeary $1.8 million to have a summer job while he goes to Stanford or to spend well over $7 million on bonuses for the top 10 rounds? The Nationals/Expos have been the poor sisters of baseball for much of the last generation and their new ownership spread lots of money around to the other 29 owners for access to the Washington market. They want to make up for years of industry-sponsored neglect and lost time, and one can just see their front office giving a collect, “Yeah . . . right . . . whatever,” to commissioner’s office slots.

 

Baltimore Orioles: The Orioles didn’t have a second- or third- round pick and decided to take the best player available with their first-round pick and fifth-round pick without regard to signability. Treating Jake Arrieta as a low first-round pick in the fifth-round was expensive, but that’s how he was scouted all spring and it made sense for the organization—as did paying the freight for Matt Wieters.

 

A Suggestion

 

If you want to have a slotting system that is respected and that agents/players acknowledge and teams try to follow, it has to make business sense. It has to pass the “Yes, I understand that” test.

 

Announcing huge cuts in a boom industry under the shroud of secrecy at the last minute fails that test in all regards.

 

How about this as a suggestion on the slotting system: acknowledging that any system without consequences is going to have teams and situations that aren’t going to comply and that should be expected.

 

Use the 2006 slots as the benchmark. No one will argue that it is a healthy amount of money that compels most young players to enter professional baseball if drafted high. Both teams and agents strived to use those 2006 slot numbers this year.

 

Establish an easy to quantify way of measuring overall Baseball Industry revenues. If that number in 2007 is, for example, $3 billion and in 2008 it is $3.15 billion, that is a 5 percent increase in revenues. Hook the slot recommendations to the overall revenues in the industry and raise the slot money five percent that year to reflect the economic state of the game. If revenues go down, then the slot recommendations go down by a corresponding amount. Don’t make it complicated, make it transparent.

 

Lastly, publish the slot recommendations on Feb. 1 each year. Produce a brochure that not only lists the slots but explains the goals, implications and reasons for the slots and gives a financial history of the draft, then send a copy to every player that the Major League Scouting Bureau turns in as a draft prospect. Allowing the agents to be the credible and really only source of financial information on the draft is just bad business and something MLB has been guilty of for a long time.