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May 23, 2012

Future Shock

The 2012 Draft's New Rules

by Kevin Goldstein

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The general consensus is that this year is a weak draft class, especially when compared to last year's monster collection of talent. For many, the most interesting aspect to this year's draft might not be the usual who is selected by whom, but rather what happens in terms of negotiations between the picks and the teams relative to the new July 13 signing deadline. That deadline isn't the only new rule, as with assigned bonus pools, strict penalties for exceeding them, and the removal of major-league contract offerings, we're entering uncharted waters.

Enter Scott Boras, the man for whom most of the changes to the draft over the last 20-plus years have revolved around. He's found plenty of tactics and loopholes to get the best deals for his clients, and nobody in the industry thinks that will stop just because of more stringent guidelines. “People have to remember that Boras tends to find things to his client's advantage,” said one American League scouting official. “And when baseball tries to fight him on them, they tend to lose.” An American League assistant GM agreed. “Boras did not recruit Lance McCullers and Albert Almora by telling them they're just going to get slot money.”

But what are Boras' options with teams unable to offer the huge packages and major-league deals from previous drafts? Under the new rules, it could take multiple years for teams to figure out the best practices in terms of selecting and paying for players, but the same applies to the advisers in terms of figuring out how to get the best deals for the players they represent. A poll of the industry believes that Boras' first tactic will simply be to attempt to convince teams that his players are worth the penalty.

“I'm sure he'll try to convince somebody that [Stanford right-hander Mark] Appel is worth whatever the penalty is,” said an American League general manager. “I'm sure he'll try to show that the player is worth it, but what is the leverage now? To bring him back next year under the same rules?” An American League assistant GM agreed that while some teams might pay the taxes for going a bit over the assigned spending pools, nobody in this year's class is worth the stricter penalties. “I would be absolutely shocked if somebody gives up a pick,” he said, while adding that the quality of talent plays a role in that decision. “I can count on one hand the number of players in the last ten years that a team even might be willing to give up a pick to sign,” he explained. “And none of them are in this year's draft.” The general manager agreed, mostly because no team will want to be the first to make such a bold move. “Anytime you have a new system and new rule, you don't have precedents,” he explained. “You can't go backwards. Once a team punts a pick, every agent is going to say their player is worth the same.”

A National League scouting director agreed, stating that assessing a player's demands prior to selection will play a more critical role than ever. “In the draft room, we're going to be doing a lot of work on signability,” he explained. “If we want a guy, and we don't think he's going to sign for the money we can reasonably spend, we just might go to the next player who is. Calling a guy's bluff when it comes to what kind of money he's asking for is going to be much harder than before.”

And then there are the thoughts of working around the standard player contract. “I don't think we're looking at an international incident-level of chicanery, but I could see teams providing side letters,” said an American League official. “Things you can't put into a contract like promises of money down the road or getting added to the 40-man roster by a certain point. Hell, that stuff probably went on before this.” Meanwhile, a National League official thought things could get even shadier. “I wouldn't underestimate the possibility of side deals,” he explained. “Look at all of the shady stuff that goes on in Latin America. It would be harder to do here because of the paper trail, but teams want to win and if you funnel some extra cash to someone and nobody knows about it, is it a crime?”

As for Boras, he doesn't take personal offense to the new guidelines, even though from a distance it seems like nearly all of the rule changes over the last 20 years have been in reaction to his negotiating tactics. “I don't take it personally,” he said. “I'm a lawyer, and I understand something has been collectively bargained, and we are in no position to ask anyone to give it away. I'll play by their rules and I don't want to complain about it. I don't want shenanigans.”

Still, Boras certainly has issues with a system that has nothing in place to pay for elite-level talent, the only kind Boras tends to represent. “If you look at the track record, every player since 1997 that I've gotten $4 million dollars or more for has spent significant time in the big leagues,” he said. “It's not like I want to burn the market. Smart teams know that, and if the system is putting an artificial value on talent, teams that know the real value of these players will take advantage of it.”

That dynamic could come into play dramatically this year in a class with so little talent. “This is not a draft where the system is dramatically at odds with the talent,” said Boras. “The best players are going to go to the teams with the most money. GMs worth their salt are not going to spend in a draft with mediocrity after the 15th pick or so where those guys would have been the 40th pick last year. They'll pay very well to get a top six or seven player if he drops because high-drafting teams in the lower echelon money-wise can't afford the risk of giving away 40% of their draft pool.”

The problem of players dropping due to signability issues was one of the key concepts of the new rules, but the way Boras sees it, the opposite could end up in play. “The rules shouldn't impact things, the talent should,” Boras explained. “This is the one thing baseball always wanted, to have the order of picks line up with the order of talent, and now that will not happen. Many teams are not going to draft players that say no to the baseline money, and teams drafting low that have money will pounce on it. It's like what the draft was becoming ten years ago.”

And Boras has his own ideas on how to fix—or at least improve—the current system, and he insists his ideas are in the best interest of not just the agents and the players, but for all of baseball. “I owe everything in my life to baseball, the game has given me everything,” he explained. “I'm here to represent players because that's the best thing I can do for the game. I really want to see the game grow, and make sure we get the best athletes. We have a window of opportunity with football's medical issue to keep our athletes in baseball, a safe game, but we can't do that without making sure those players get the value scouts see in them.”

Boras' first not-so-radical idea is that of a five-year spending pool that would still provide the game with cost certainty, but far greater flexibility to adjust to the strength of each year's class. “The problem is that we are forcing teams to spend in a bad year, when you could let them spend more in a better year,” he said. “The draft is a 99-to-1 concept. About 1000 kids sign every year, and maybe 10 have a value in the end that's really significantly different from the other 990. Some years it's 30, and some years it's five. That's the reason for this pooling concept.”

Boras explains further. “You have a pool of money within a five-year framework with a minimum and maximum amount of money based on a team's record and then reductions for free agent spending. This gives teams and scouting directors the freedom of their intellect. There is no limit in a single year, so a team could decide to spend very little in a weak year and than 20 million in another. This allows baseball to keep the best players in the game, allows the money to flow properly in line with the talent, and still gives baseball the cost containment that they want. We judge teams and front offices by their intellectual quality in terms of trades and free agents, so why not the draft?”

The idea was well-received by some in the industry. “A lot of people won't like that just because it's Scott's idea, but I love it,” said one general manager. “The current system is short-sighted. It takes away individuality and the concept of having competitive advantages through the evaluation of talent.”

In addition, Boras wants to reward small-market teams that perform well via scouting and player development through establishing a draft exception rule. “We need to reward revenue-sharing teams for winning at the big-league level,” said Boras. “When a revenue-sharing team makes the playoffs, they should get an exception where they can spend what they want on one pick the following year.”

The purpose of the concept is to not only encourage greater parity in the game, but to also reinforce the value of building through scouting and player development. “These teams can't spend free agency money, so we give them a reward for building through the draft,” Boras said. “It lets teams keep their competitive standards, rewards them for building a winner internally and, let's face it, more good teams keep the game exciting.”

Still, those are pipe dreams for now, and the reality of the new rules make Boras wonder about how they would have affected an elite class like last year. “You had so many players worth five million or more last June, that many of them would not have signed,” said Boras. “Bubba Starling would not be a baseball player. Dylan Bundy and Archie Bradley would have went to junior college and been better off in this draft and that's not good for baseball.”

For the most part, neither teams nor agents have a good feel for what will happen between the first pick on June 4 and the signing deadline just over a month later, but few are happy with the developments. “I think in the end you'll see the same percentage of players sign that did in the old system,” said an American League official. “There will be more disgruntled parties, and more hurt feelings, but the results will be the same.”

“It all comes down to what the Astros do with that first pick,” said a National League scouting director. “That's going to set the tone immediately as the whether all of this is going to 'work' or not, and other teams will follow suit, based on that pick.”

“It's about giving teams options and letting us make our own decisions. If we're not capable of making these decisions then we shouldn't be sitting in the seat,” said a general manager. “These new rules make it look like we're afraid of ourselves, and frankly it's a little embarrassing.”

As for Boras, he says he'll play by the rules, but no agent has found more ways around them in the history of the draft, and it would be foolish to think he's not looking for another.

“The Titanic is in the water, and the iceberg is the draft,” Boras quipped. “The big one might not be in this year's class . . . but it's coming.” 

A version of this story originally appeared on ESPN Insider Insider.

Kevin Goldstein is an author of Baseball Prospectus. 
Click here to see Kevin's other articles. You can contact Kevin by clicking here

33 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links


Good interview. A roundtable discussion of Boras's five-year pool proposal with GMs and scouting directors would be a Very Good Idea for a column.

May 23, 2012 12:55 PM
rating: 8

“This is the one thing baseball always wanted, to have the order of picks line up with the order of talent and now that will not happen."

That second clause has to be one of the funniest things I've read in a long time. I have no idea how the new CBA will effect picks lining up with the order of talent, but it sure as hell won't be worse than it used to be.

May 23, 2012 13:16 PM
rating: 4

It's also funny in that it would never have happened under ANY circumstances because the determination of talent level is subjective. Unless MLB is going to assign amateur players to teams according to its own assessment of "talent," instead of having a draft, and can you imagine the can of worms that would open?

May 23, 2012 13:42 PM
rating: -2

I can see it skewing things, but I don't understand how a top seven pick falls dramatically. For example, a #3 pick who wants 1 mil more than the allotment gets passed over by the club drafting third. The difference between his asking price and the allotment is greater for club #4, and grows greater as the draft continues. Not sure how there will ever be an incentive for club #22 to draft him. They would either pay much greater penalties or fund the difference by not signing another high-round pick. It will be a very interesting dynamic.

May 23, 2012 14:09 PM
rating: 0

If you don't sign a pick, you don't get to use the money on another pick.

May 23, 2012 18:19 PM
rating: 0

Interesting. That certainly reduces flexibility. So, if the allotment is 3 mil for a player, and you pay 3.5 mil, what figure is the the .5 mil compared to, to calculate the 5%? Is it just 5% of a team's total allotment?

May 24, 2012 06:01 AM
rating: 0

In light of this, I want to assure the NY Mets that if they use their sixth round draft choice ($445K slot) on me, they can save $400K for use in signing, other, more talented, athletes. In addition, I will help with statistical analysis and they won't have to pay for a uniform.

May 24, 2012 15:07 PM
rating: 5

Just accidentally flagged yer post and now it won't unflag. Sorry buddy, was trying to click the + button for chrissakes.

May 24, 2012 15:52 PM
rating: 0
BP staff member Matt Kory
BP staff

I love the five year spending pool idea. The idea of providing an exception for small market teams would have be worked out more though. The one thing that came to mind regarding that was would the agents know beforehand that their guy was the one with the exception or would it be determined after the fact (the player the team spent the most on would be excepted, for example)? If the agent knows then I can't see baseball getting behind the idea as it would likely lead to one guy getting much more than he would have before. I think that might not be a dead end if that guy wouldn't ever sign under the current CBA, but if it's a he signs for X or he signs for X plus a two million, baseball will opt for the former.

Great work on this Kevin. Really interesting stuff.

May 23, 2012 14:07 PM

Obviously the players and owners negotiate the CBA and the GMs deal with the fallout, but is there any theoretical way something like Boras' 5-year structure could be put in place under the current CBA? It accomplishes the same thing the CBA intended while giving GM's some more flexibility and flat out makes too much sense.

Great piece by the way.

May 23, 2012 15:06 PM
rating: 1

Man, I wish. Given that the current term is 5 years (right?) I have my doubts, especially since it would be a big difference even if it's not much different at all. I don't think CBAs allow for much in the way of renegotiation, but I'd love to hear about whatever means DO exist - hint hint Mr. Goldstein!

Hey, can anyone name an area of this CBA which is a clear improvement over the old one? I'd like at least _something_ to feel optimistic about. Even the rule nixing corporate tattoos seems vaguely foreboding, and it's about as silly a contractual obligation as I've ever heard.

May 23, 2012 16:34 PM
rating: 0
BP staff member Jason Wojciechowski
BP staff

As a CBA is just an agreement between parties like any other contract, I don't see any reason why said parties could not come together and make whatever amendment they wanted to make. Whether it's practical is a different question and one on which I'll defer to those who know the history of bargaining between the union and management better than I do (i.e. at all).

May 23, 2012 16:39 PM
BP staff member Kevin Goldstein
BP staff

Absolutely. Changed have been made to a CBA during a CBA's term many times, especially when it comes to the draft. That just have to be collectively bargained.

May 23, 2012 17:16 PM

Interesting, and makes sense. What would it take to bring something like this to the negotiating table? Clearly switching the pool from a year-by-year one to a 5-year one is inconsequential for the MLBPA, so would it likely collectively come from the GM's and cascade up to the owners?

May 24, 2012 08:22 AM
rating: 0

Not seeing the motivation on the owners part. GMs might not appreciate the inflexibility, but owners probably do. Unless of course, things shake out unexpectedly in their disfavor.

May 24, 2012 09:17 AM
rating: 0

And what wasn't mentioned here (bout Kevin has mentioned many times before, I believe) is that the very people being affected in the draft had no say in the CBA negotiations.

May 23, 2012 21:19 PM
rating: 2
BP staff member Jason Wojciechowski
BP staff

I wonder whether any team will ever pay the "lose a pick" penalty. If the very top guys are the only ones worth losing a pick, and the team that drafts first in a given year is drafting first for a reason (they suck), then that team is frequently in line to draft very high again. E.g. if the Nats take a penalty to sign Strasburg, they don't get Harper. If they take the penalty to sign Harper, they don't get Rendon.

May 23, 2012 16:14 PM
John Douglass

You bring up a really interesting point. There are several other scenarios though outside Straburg/Harper/Rendon that complicate it. ie do you blow out your budget for David Price and lose out on Tim Beckham? Or, do you give Brett Wallace a truckload of money and cost yourself Shelby Miller? What if you're lower in the draft order, like the Yankees? That really complicates matters, when you don't have to rely on top-tier draft talent as heavily as other clubs, and you almost never have a chance to grab an elite talent in June. Do you do everything in your power to sign your 2008 1-28 selection, Gerrit Cole, or do you worry about losing your bottom-of-the-round pick the next season? I'd probably punt my 2009 pick, in hindsight, to have Cole.

If you're drafting 1-1, I'd think the ultimate goal is to not draft in the same slot next season and further down the road. Passing on a 1-1, or any other top-of-the-draft talent, for fear of what you'll lose next year, has to be a factor up to a certain inflection point, and after that, with a guy like Strasburg or Harper or Cole, you just give him what it takes to get him signed with confidence that he's that kind of talent that gets you out of the 1st Overall Pick in the future.

May 23, 2012 16:45 PM
rating: 3
BP staff member Jason Wojciechowski
BP staff

Yeah, since the whole idea of drafting a star is to have that star lead you to the promised land, maybe the situation isn't as absolutely "never ever give up a pick" as I think it might be.

One of the things I was thinking of was the contrast to, say, the NBA. The Spurs, of course, come to mind -- they'd surely have been happy to give up their next-year pick after they drafted Tim Duncan because with Duncan on the team and David Robinson returning, that next-year pick was unlikely to be one they'd regret losing (compared to not having Duncan, anyway). Baseball has neither the immediate payoffs nor the devastating single-player losses that the NBA (or the NFL, to a lesser extent) has, though.

May 23, 2012 16:50 PM
John Douglass

I'd lean toward "always give up a pick." There are exceptions. Like if I'm drafting after 1-3 in 2010, knowing what's coming in 2011. Or if I'm so downright bad at the MLB level that I know I'll be in the top 6 again.

May 23, 2012 16:59 PM
rating: 0

I could see the big teams take the risk of losing their pick next year to try and get someone who is seen as unsignable - say, if Giolito doesn't get picked early, it might make sense for a team at the very end of the first (Yankees/Red Sox/Phillies) to take him and sign him, given that he may well be a better bet than a standard pick at the end of the first this year, and another standard pick at the end of the first next year.

May 25, 2012 03:43 AM
rating: 0

My thoughts too - if a player is seen as Josh Bell-type unsignable, and early teams don't even bother...well, perhaps someone like Philly, Texas, Boston, NYY, etc who expect to pick late again next year consider blowing out their cap.

I expect that to happen very rarely, if ever, given teams are compensated for unsigned picks and how commonplace it is for a player to sign for far less than their pre-draft demands suggests to me it will be rare for teams to pass up top talent.

I'd be interested in seeing how a player like Josh Bell or Daniel Norris would've played out under the new rules.

May 25, 2012 05:25 AM
rating: 0

Great article.

May 23, 2012 16:53 PM
rating: 1

Awesome just awesome I love to get into the mind of the smartest and most powerful people in their sports this was a great read

May 23, 2012 18:44 PM
rating: 0
Pat Folz

A bit late to this party, but...
Do draftees unsigned by the deadline become free agents?

And signing amateur American free agents is uncapped, right?

If those are true, then... enormous loophole? Agent demands draftee get paid, penalty be damned. Team either pays + penalty, or player goes becomes a free agent and gets paid.

Next year no one bothers trying to pay their picks, everyone becomes a free agent, players get paid some semblance of their actual worth, agents get paid, teams get talent, everyone wins. Hooray for a happy ending.

You may say I'm a dreamer...

May 23, 2012 20:44 PM
rating: 0
BP staff member Kevin Goldstein
BP staff

No. You only become a free agent by not getting drafted. If you are NOT a college senior and your are drafted, you are just draft eligible next year, or in three years if you are a high school senior and attend a four-year school.

May 23, 2012 21:25 PM

Boras was the keynote speaker at last year's SABR convention. Like many of the members of the audience, I went in with a negative image of him ... after all ... he was "ruining baseball".

But then we all listened to him ... he's self-assured, confident, polished, humorous, convincing, even charismatic. I came out of that speech maybe not *liking* him ... but certainly *respecting* the talent he possesses.

And as KG has mentioned on the podcast, if your son was a baseball player, you'd want Boras representing him.

Here's Boras' speech:


May 24, 2012 07:50 AM
rating: 3

The economy does a lot better when money is in the hands of ballplayers and not sitting in the bank accounts of owners.

May 24, 2012 22:18 PM
rating: 0

Agree wholeheartedly. If my son was a schoolteacher, I'd want Boras representing him. His job is to maximize the long-term earning potential for his clients, and there are probably few people--sports agents or otherwise--that do that job better than him. His job is NOT to improve the structure of the game of baseball. If anyone wants him to do that, they should nominate him to be commissioner.

May 28, 2012 21:01 PM
rating: 0

I'd get behind Boras' 5-yr pool if MLB gave agents 5 slips of paper, numbered 1 through 5 every five years . Before each draft, agents would have to collectively grade the draft, assigning one of the remaining slips. They couldn't reuse any slip.

Sure, his proposal seems reasonable now, but the agents are never going to admit that a draft class is any lower quality than the previous, nor should they.

MLB is being penny dumb and pound dumber with this new CBA. Titans of the free market like nothing better than to fix wages artificially. Since the other party is unrepresented in the CBA, their is no pushback. Its going to take some high-minder amateur superstar to bring a lawsuit against MLB to break their anti-trust exemption. Would I be willing to sacrifice my career and millions in future salary to do that?

May 25, 2012 04:15 AM
rating: 0
Tim Carvin

Articles like this are why I subscribe to BP. Amazing

May 27, 2012 08:06 AM
rating: 1
Johnson Magic

How does the pick forfeiture rule work? You give up same-round pick following year for going above formula $, or you give up first round pick? i.e., say a Giolito falls to the second round...I can't see the Astros or O's taking him in the first, but if the Rangers, Yanks and Sox pass on a player like that at the bottom of R1, and the over-slot cost is just a R2 pick the following year, I don't see him falling very far at all in the second round.

May 29, 2012 06:38 AM
rating: 0

I agree with Boras's draft pool idea and am sympathetic to exception for teams building from within, but what the hell is he talking about when he says Bundy and Bradley would have gone to juco? Um...they were committed to major rival div 1 programs--Bradley as a QB and pitcher.

May 30, 2012 22:28 PM
rating: 0
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