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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.

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