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October 15, 2009

Tweaking the Talent System

Declaring the Basics

by Kiley McDaniel

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Last week, I kicked off this series by laying out the facts about the looming CBA negotiations and how the draft could be affected. When speaking with executives and agents, it quickly becomes obvious that the sides have different assumptions about what the draft should accomplish. There are clear-cut party lines where agents and executives will disagree, just like some small- and large-market clubs are sure to differ.

An AL executive put some of these assumptions in perspective: "The fewer restrictions there are for the club to get the player they want, the better. Trading picks moves us closer to that. If [Stephen] Strasburg isn't the best guy for the Nationals, they can trade down and get value as opposed to passing, getting nothing in return and being killed in the media." This sounds like what I talked about last week; if we assume hard-slotting is in place, teams like trading picks because it allows "smart teams to be smart" and leverage their valuations and strategies.

The exec took it a step further, "Players should also be able to dictate what team they want to go to. What's the problem with what Eli Manning did? He wanted to go to the better team with better management in the bigger market and the trade worked out for both sides." In fairness, this executive works for a large-market club, so his club would tend to have more to offer a player looking to dictate his landing spot.

The wrinkle of players dictating their ideal team, rather than just avoiding bad ones on rare occasions, is an interesting twist. With no bonus negotiations, agents will focus on getting their client in the best possible situation. This could mean avoiding poorly-run clubs, less desirable climates, deeper farm systems, or longer distances from family. Players would think more about targeting teams that will promote them quickly and start their arbitration clock sooner.

Admittedly, this probably would not be a widespread phenomenon, but points to a major effect of hard-slotting. With bonus negotiations non-existent, agents and players can look at factors other than money when similar situations are available. New loopholes and unforeseeable effects stemming from sweeping draft reform would come from agents reacting to the big changes. Dictating a player's destination is one horizon for agents to assert their power if hard-slotting passes; more on another horizon next week.

Declaring for the Draft

Another widely discussed reform is making players declare themselves eligible for the draft. This looks like another straightforward nail-in-the-agent/amateur-player coffin but, in tandem with mandated slots, opens a big can of administrative worms. The makeup of baseball at every level below Double-A could look completely different just because a seemingly simple set of reforms designed to spread out talent and take some power back from the agents.

Scouts like the idea of players declaring themselves eligible because it all but eliminates the need for pre-draft signability checks. The scout turns in his evaluation, the club communicates to the player the type of money he can expect, and the player decides whether or not to enter the draft. Players that are looking to only turn pro in an ideal situation (i.e., the players that cause signability headaches for clubs) would not want to risk stomaching a smaller than expected bonus or a less than ideal situation, and would go to school until they are ready to jump on the draft rollercoaster. This may lead to NBA-style promises from clubs to draft a player at a certain pick.

There is a catch with the previous paragraph, however. While clubs could indicate to families the information they need to make a wise decision, to put it plainly, many of these families have no idea what they are doing. They need an agent to educate and guide them through the process. Major league teams might not love agents, but they will put up with them if both sides are educated about the process. A chess master would rather play a medium-skilled player than a beginner, because the beginner will make stupid moves the master could never anticipate, possibly ending in disaster.

The NCAA is currently pitching a fit to try to keep their student athletes away from the supposedly evil agents. For the baseball draft, agents are referred to advisers and can only give advice to the family; they cannot talk to any club on the player's behalf (but they all do, for understandable reasons). This is already ridiculous, but in a situation where players have to get educated and process a lot of information from clubs to make a concrete, binding declaration decision, it would create a nightmare.

There are two solutions. One is a scouting advisory board, similar to that of the NFL, where players considering declaring for the draft are told by a league-run panel of former scouts where they can expect to be drafted. An adviser can help the family make a decision with this information and if the player declares for the draft, he loses amateur eligibility, and the "advisory" officially becomes an agent; the NCAA is appeased. The agent can then lobby for his player with clubs and try to maneuver him up draft boards (as they already do, of course).

We could still see hard-slotting without a declaration mechanism, since players still have the option to simply not sign for the mandated bonus. That being said, this system would quell the tantrum the NCAA is throwing while further taking any leverage out of the hands of the amateur players and agents. If MLB is trying to move to a more regulated system with less wiggle room for agents to exploit, it may as well go the whole way and leave no wiggle room.

Going back to the first paragraph, the hard-slotting movement is not about drawing a philosophical line between an amateur player's rights and those of the club. It is not about fairness to amateur players, it is about fairness among the clubs. The players' association will clearly see this, and may be alright with the controlled bonus spending, hanging agents out to dry and taking money from amateur players, but they will need something sizable in return. I will cover that later.

Reforming Draft Basics

A clear pro-club byproduct of the hard-slotting system is that many more high school players will be going to college. There were 42 millionaires in the 2009 draft, and 30 recommended slots calling for a seven-figure bonus. There were scores of well-over-slot six-figure deals that would not exist in a slotted draft. One agent characterized the ramifications: "The top 20-30 high school players will sign, and once you get out of the first few rounds, it will be all college kids [being drafted]." This would, in turn, change the face of college baseball and the low minors. This is a hard-slotting byproduct that no one seems to be talking about, and one that I will go in to more detail about in the coming weeks.

The talent influx would move college baseball toward a new golden age. Most players being drafted will be two or three years older than they are now. Combine that with a possible draft date change, and short-season minor leagues are probably dead. With less roster spots to fill, the draft can (finally) be shortened from 50 rounds. With so much talent playing in college, the exposure and popularity would climb, although it likely would happen slowly. Eventually, college baseball will get to the point where baseball fans may actually know many of the players being drafted. The draft could become a true off-season event like it is for every other sport. This would allow for more evaluation time from scouts, and would create more fans and revenue, helping make baseball more of a year-round media story, like the NFL.

Minor league reform is not just an innocent bystander to the hard-slotting carnage, either. There have been rumblings of minor league reorganization for years, prompting an AL scouting director to comment, "The draft and the minors need some work. We might as well rip the band-aid off and address both at the same time." This issue is one that could benefit both players and clubs and deserves a much longer discussion that I will get into later.

As for the changes to draft basics, these specifics can be tweaked, but here are some proposed changes and observations:

  • A post-World Series, pre-Winter Meetings primetime televised event (roughly November 10th with the current schedule, which could be changed) with a pre-Winter Meetings signing deadline of December 1st.

  • With the fluid, year-round evaluation period, it would be wise to let four-year college players declare for the draft any year. Junior colleges may lose talent, but baseball would gain a true developmental league of the best domestic amateur players in one place. More players would take the opportunity to go to college and with this influx of talent and solution to the agent issue, MLB could lean on the NCAA to add more scholarships to accommodate the talent bonanza for the college game.

  • These developments would cause some smaller market, high school-focused clubs to bemoan the loss of what they consider a competitive advantage. Potential late-round picks with over-slot deals would be going to college in droves to allow other clubs to gather more information about them. You could give these clubs back some of this advantage with the return of the draft-and-follow system, which I will also get into next time.

  • There would be much more information about high school players. We would have the pre-season showcase circuit, high school season, months of post-season scouting events, and only the best high schoolers declaring themselves eligible. The certainty surrounding the youngest draftees will go up. Having a full summer of wood-bat leagues to evaluate college players before the draft would seem to raise the certainty of college players as well. Along with lower costs, the clubs have to be thrilled with this possibility. The agents are still upset.

  • To the end of more and more standardized information on players, some have advocated for a medical combine. It was originally an idea for a proposed international draft that was also applied to high school players and could also include college players. All eligible players would gather after summer/fall leagues at the last pre-draft event to go through uniform medical and psychological testing, with optional showcase-style physical elements.

Along with the cliffhangers, I haven't even covered possible draft reforms that are not hard-slotting, not to mention the international draft. Speaking of which, I am heading to the Dominican this weekend to cover a high-profile showcase featuring Cuban left-hander Noel Arguelles, free-agent outfielder Wagner Mateo, and a number of other top talents. Stay tuned to my twitter feed (http://twitter.com/kileymcd) for periodic updates from the island. I will be back next week with full reports and video from the showcase, along with another dive down the draft reform rabbit hole.

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

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I have an odd solution to the problem of draft bonuses: Arbitration.

Basically, it goes as follows. Without a hard slotting of draft picks, those top picks have 3 issues in contract negotiation: Contract length, Contract type (major or minor league) and Bonus. The value of the contract is almost never an issue. Most teams and picks can also agree on the issue of a major or minor league deal, and its length. What kills most negotiations is that of bonuses. A november 1 draft has the problem that it costs all lower round and early signing picks 5 months of development time. Leave the draft in June, (maybe pushing it till after the end of the College world series but keeping it before the AS Game). Then allow any picks that wish to the chance to use Arbitration to get a bonus value. Use July 15th as the day to submit values for a bonus (with the rest of the deal signed) then Cases would occur between July 23rd and August 1st. Any team which doesn't have the rest of that deal signed by July 15th loses the pick and gets to pick just like last year. Also, Teams and picks can still agree to a bonus any time before the arbitration hearing.

This way, unless a team is truly going to punt its first rounder (which they can), they have a guarenteed way to sign that first round guy, even if its for more money than they'd really want to pay. Of course, if the pick gets too greedy, then he might find that he's signed for a bonus which is much less than he expected.

First off, this will allow each player to be judged on his own merits, not just on where he was picked. (so, if Pittsburgh decides to select a lesser talent with the first pick in the draft, they won't have to pay a "first pick in the draft" bonus to that player, if he's just not that good.

Secondly, it will ensure some degree of certainty in drafting. I guess a player can say, I don't care what you are offering, I'm not going to sign anything, so avoids arbitration. In that case, he goes back into next years draft, REGARDLESS OF COLLEGE ELIGIBILITY. But, short of that, a team knows that if it drafts Stephen Strasberg, then they can depend on having Stephen Strasberg, even if its going to cost them $10 million.

Oct 15, 2009 11:49 AM
rating: 0

My question is, how do you arbitrate effectively based on college and summer league numbers? Without subjective analysis from scouts the 45th best guy often looks very similar to the 11th best guy by the kind of information used in a hearing.

In theory it's a great idea (although I'd like to see it in a different form), but I have serious doubts that arbitration would be effective in evaluating what an amateur player deserves. Hell I could make a very compelling case that it struggles to properly evaluate ML players just by regressing salary and WAR (or WARP3 if you prefer).

Oct 15, 2009 15:41 PM
rating: 0
Rowen Bell

Are there enough college baseball programs with scholarships to absorb all of the non-elite HS players that are currently signing & going to short-season leagues?

Also: If you envision going down a path where the short-season leagues wither and only a small number of elite HS players get drafted, why not go further and ban the drafting of HS players, consistent with the NBA?

Oct 15, 2009 12:18 PM
rating: 0

Very, very interesting read. One possible implication of hard-slotting that comes to mind is that if more high school students decide to go to college (due to less than optimal signing conditions), I would imagine there would not be enough scholarship dollars to go around for all. If a high schooler had to choose between a small bonus or paying college tuition to attend a D-I school for one to three years, they may still opt to go pro or even to junior college. As such, it might be a little early to pronounce the lower minors as dead.


Oct 15, 2009 14:13 PM
rating: 0

I think those that would suffer are the lesser talents that are solid college players now but would never be considered for a draft. The idea is that the average talent level would increase. Those now-solid players would become mediocre and undeserving of scholarship money.

I think the end result of that is better players attending academic D-III schools. The talent would likely trickle down. And as Kiley noted, the MLB would probably lean on the NCAA to use the potential increase in revenues to fuel more scholarships.

Oct 15, 2009 15:46 PM
rating: 0
BP staff member Christina Kahrl
BP staff

Another possibility could be a bonanza of talent that would wind up in the independent leagues--especially if the minors shrink--from among players who decide to punt on college after high school or juco experience, or who don't get into MiLB upon their initial eligibility coming out of college. Which would make for a richer pool of non-drafted free agents, not to mention better quality of play in the unaffiliated leagues, where it seems as if teams have a more vested interested in winning. These all don't sound like bad things.

Oct 15, 2009 17:07 PM

The potential for more a interesting independent ball league made me think of Arena Football. How about a really dead ball ,a softball sized field, 7 fielders, and BIG walls?

In all seriousness, with the price of going to a baseball game these days (outside of the Coliseum or Metrodome), it would be nice for independent leagues to have enough talent to hold the interest of a whole family.

Oct 15, 2009 20:15 PM
rating: 0
BP staff member Kiley McDaniel
BP staff

I would say you must've seen my next article, but I haven't written it yet. Cutting MILB affiliates and outsourcing PD costs would cause an Indy league renaissance

Oct 16, 2009 16:57 PM

I don't understand the ideas of a late-fall draft and the death of the short season minors. So kids are going to finish the spring season/school year, sit around on their duffs all summer, get drafted in the fall and come to spring training ready to contribute? I don't think so.

Best time to draft them is right after their seasons end, other than the in-season distraction for front offices, but hard slotting should ease that workload some. Then you get them signed quicker, and into short-season leagues, which should instead be thriving.

Oct 15, 2009 16:58 PM
rating: 1

(I was in Europe for 3 weeks and catching up now, so my post is not based on any subsequent articles in this series.)

I think the loss of development time argues strongly against a Q4 draft. Not just short season minors for the quick signers, but also instructional league and the Arizona Fall League, etc. You're talking about a lost year for these guys and that's a real loss.

Oct 30, 2009 10:23 AM
rating: 0

I cannot see the value of trading picks - I know that McDaniel believes this will be rarely used - even if it is rarely used, it will be devestating.

I can imagine plenty of players declining to sign for the Nats/Royal/Pirates. If those teams cannot draft and sign the Pedro Alvarez' and Stephen Strasburgs', they'll never improve. And if picks can be traded, those elite players will rarely choose to go to the Nats/Pirates/Royals. Why would they.

The Yanks/Red Sox and Dodgers will continue to be strong and get stronger and the small market teams will never stand a chance.

Oct 18, 2009 07:18 AM
rating: -1

I totally get where you are coming from, but I think you are overstating things a bit. Say the Nats could have traded the draft rights to Strasburg (who is a very elite prospect, but who is still unproven). Scouts and teams love upside, and he has upside, but to trade for upside you have to give up a lot. What do you think the Yankees would have had to give up for the right to draft Strasburg (Joba Chamberlain, Philip Hughes, and a few other draft picks)? You think that is extreme; the Padres got three solid arms for an injured Jake Peavy. Remember the haul the Rangers got for Texeira?

If you limit deals to draft picks for draft picks, let us visit some history in the NFL. The San Diego Chargers once gave up the chance to draft the mega-talented, super-stud prospect Michael Vick. The players they drafted from the picks acquired from the Falcons became Ladainian Tomlinson and Drew Brees. A few years later, the Chargers again traded down 4 spots in the draft (giving up Eli Manning). The picks they received became Philip Rivers, Shawn Merriman and Nate Kaeding. My point: if you do a good job of drafting, you can give up the pick for the mega-prospect, and reap the benefits of more high quality players.

One final comment: The NBA has a system in place where teams are limited in the number of consecutive years they can trade first round picks. Surely a system like that could be implemented in MLB.

Oct 21, 2009 05:47 AM
rating: 0
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