Blog Entry

Draft-bonus revamp is the big flaw in new CBA

Posted on: November 18, 2011 2:31 pm
Edited on: November 18, 2011 6:25 pm
Baseball does not need a salary cap. The results show it.

The owners no longer push for it, and that's probably the biggest reason labor agreements now get done so smoothly in this sport, and why the newest deal is now on track to be formally announced early next week, according to sources.

Details of the new agreement remain somewhat sketchy, but some of what we know seems positive. The revamping of draft-pick compensation for signing free agents, in particular, looks like a big improvement; the current system had become awkward and unhelpful to either side. Realignment and expansion of the playoffs are good for the game, too.

And then there are the new rules about the draft itself. Not good.

Commissioner Bud Selig and some owners wanted hard slotting for draft bonuses. While they didn't get that, the union eventually agreed to a system that will penalize teams for overspending on draft bonuses, including taking away future picks for teams that "overspend."

Really bad idea, and here are two reasons why:

First, under the current system, the draft is the best way for mid- and low-revenue teams to keep up with the big spenders. The Rays built a contender by smart drafting and smart spending, and the Nationals, Pirates and Royals are now doing the same.

Second, bigger draft bonuses help baseball as an overall business attract the best athletes available. Curbs on bonuses (combined with a lack of full scholarships given out by college baseball) push good athletes towards football and basketball, and that's bad for baseball.

More on that in a bit, but the worst part of the new system is the potential effect on mid- and low-revenue teams that have come to understand that draft spending is more cost-efficient and productive than free-agent spending.

General managers and scouting directors understand that, and it's why they're near-unanimous in behind-the-scenes opposition to the new rules. Owners who say that they want to build teams on scouting and player development (which is most of them) should understand that, but obviously don't.

Maybe they need to go and run teams themselves.

Look at the experience of Frank Coonelly.

When he worked for Selig, he was responsible for screaming at teams that spent more than baseball recommended. When he went to work for the Pirates at club president, he started to ignore the limits himself.

"It only took for him to be in the system to understand," said agent Scott Boras, who represented the Pirates' top two picks last summer, and negotiated above-slot deals for both (for a combined $13 million). "[These new rules] illustrate that those in the commissioner's office are not in the system."

Boras has data to back up a point I've made for a long time, which is that almost all of the biggest draft bonuses turned out to be good deals. The Nationals certainly don't regret the $25 million combined they spent to sign Stephen Strasburg and Bryce Harper.

Imagine how much they'd need to spend to add that kind of talent through free agency.

Imagine if the Pirates (pre-Coonelly) had paid Matt Wieters $6 million out of the draft in 2007, rather than passing on him because he wanted "above-slot" money. If they had Wieters, they wouldn't have had to give Rod Barajas $4 million to be their catcher in 2012, let alone have paid Ryan Doumit almost $9 million for the last two seasons.

Selig's backers would no doubt argue that in a true slotting system, Wieters would have accepted the slot number the Pirates were offering, because he couldn't make more money by slipping to a lower-drafting but higher-paying team.

But this new system doesn't provide for true slots. If the Pirates passed on Wieters because he was too expensive (and they didn't want to risk losing a future draft pick), a team like the Yankees could sign him for big money and say, "Forget the future pick." Their future pick is going to be lower in the first round, anyway, and it's not of nearly as much value to them as the Pirates' pick is to Pittsburgh.

It's a bad system, but there are ways to fix it.

One possibility: Allow each team one exception pick a year, where the bonus wouldn't count against draft-pick penalties. Or even allow an exception every other year.

Or, if you really want to allow the draft to serve the teams that need it most, allow an exception to teams drafting higher.

The point is, the new system already needs fixing -- and it can be fixed.

Baseball needs to allow the draft to benefit the teams that need it most, and it needs to allow the system to benefit the sport, by helping to attract the best talent.

Without significant signing bonuses, Bubba Starling is playing football at Nebraska, instead of playing baseball for the Royals. And Archie Bradley is playing football at Oklahoma, instead of playing baseball for the Diamondbacks.

Baseball is better for having signed them, and two teams that need to develop through scouting and the draft are better for it, too.

The new system isn't a disaster, but it's not good. The bigger news, though, is that baseball once again has labor peace.

And no salary cap.

Some fans, especially fans of small-market teams, remain convinced that a cap would help. But baseball has proven that it doesn't need one.

While it's true that big-spending teams enjoy an advantage, it's also true that smart management is even more important. The low-spending Rays have made the playoffs three of the last four years (same as the Yankees, and one more time than the Red Sox).

With no cap, baseball has had nine different champions in the last 11 years. And the Cardinals, one of the two repeat champs, did it without a super-high payroll.

The Yankees annually spend far more than everyone else, yet the Yankees have won just one of those last 11 World Series.

Good thing, too. Because if the Yankees were winning every year, you can bet that the other owners would have been pushing for a cap.

Instead, the owners pushed through a new deal that has some pluses -- and one significant minus.


Since: Nov 3, 2006
Posted on: November 22, 2011 3:26 pm

Draft-bonus revamp is the big flaw in new CBA

This statement is completely false.

"Boras has data to back up a point I've made for a long time, which is that almost all of the biggest draft bonuses turned out to be good deals."

The writer gets paid to do this research.  Go look at the top 100 signing bonuses of all-time in baseball.  You will not recognize at least half of the names. 

If you don't have time to do true research, just grab your Baseball America Prospect Handbook.  They list the top five bonuses paid by each of the 30 teams.  That will give you 150 names.  And since I can see that you are not a draft expert like myself, you will not recognize over half of the names.  Therefore if you have never heard of these bonus babies, how can you say they worked out for the team that paid the huge bonus?

Sorry for the passion in my response, but you are just so so wrong, that it made me a little crazy.

Since: Nov 3, 2006
Posted on: November 22, 2011 3:19 pm

Draft-bonus revamp is the big flaw in new CBA

Your head in buried in the sand.  Please come join reality when you get a moment.

Since: Nov 3, 2006
Posted on: November 22, 2011 3:17 pm

Draft-bonus revamp is the big flaw in new CBA

What are you talking about?  The worst teams DO get the first picks, each year, every year.  If you have truly followed the draft in the past, you should know how it works.

Since: May 22, 2011
Posted on: November 20, 2011 11:48 am

Draft-bonus revamp is the big flaw in new CBA

Yah the Yankees may have only won one World Series out of the last 11, but the problem is that we have to see their mugs in the playoffs every year.

Since: Aug 11, 2008
Posted on: November 19, 2011 6:20 pm

Draft-bonus revamp is the big flaw in new CBA

You make the post season you don't get a pick until the 2nd round.

Since: Aug 7, 2008
Posted on: November 19, 2011 2:10 pm

Draft-bonus revamp is the big flaw in new CBA

They should do the draft like in basketball and football...the best teams get the lowest picks while the worst teams get the highest picks. How difficult is that to understand? I have been following the baseball draft for several years and I never understood how playoff teams are able to draft ahead of teams that do not make the playoffs.

Of course, to truly prevent the Yankees, Red Sox or other high revenue teams from monopolizing talent then just do not allocate first round draft picks to any playoff teams. 

Since: Jun 5, 2011
Posted on: November 19, 2011 11:43 am

Draft-bonus revamp is the big flaw in new CBA

The Pirates passed on Kershaw to get Lincoln.  This is just one example of them missing the boat.  More recently, they seem to be drafting better or maybe I should say their front office might have finally gotten a clue.  We'll see within the next couple years.  With the exception of a couple blue chippers each year, the MLB draft is a crap shoot and always will be.  No system will please all the teams.

Since: Mar 2, 2008
Posted on: November 18, 2011 7:03 pm

Draft-bonus revamp is the big flaw in new CBA

The Pirates have had nearly 20 years to fix their system, the Royals have had another eight.  How about them stop making excuses, instead of having poor guys like Knobler gettings sympathetic about their self-chosen plights.  They don't need things to be fixed with their terribad choices already. 

Loser teams are loser teams by choice at the end of the day, they had years to fix themselves already.  If they can't eveolve fans can certainly say no, the way they already did with the terri-cheap Expos ownsership (run off, instead of spending money).

Since: Aug 17, 2006
Posted on: November 18, 2011 3:51 pm

Draft-bonus revamp is the big flaw in new CBA

Baseball would be way better off with a Revenue Sharing and a Cap and Floor system for revenue, closer to what the NFL does   The system of haves and have nots in Baseball is just silly so that when the REd Sox do not make the playoffs they need to fire the coach and the GM.   The Rays, Diamondbacks are small payroll teams that do compete and the Cubs and Mets are big payroll teams that do not compete but the system that means that less than half of the teams in the majors can afford to resign a star player is just awful.    Also congrats to the Cardinal and Rangers who with the 11th and 13th highest payroll made the World Series which helps keep the charade going that revenue sharing would not help baseball.   There are tons of empty seats in many ball parks this year where there is little hope the team can be good.    The better first sentance would be a salary cap and revenue sharing would be nice, but it will not happen this time, so the CBA got done early. 

Since: May 8, 2007
Posted on: November 18, 2011 3:26 pm

Draft-bonus revamp is the big flaw in new CBA

It's true teams like the Yankees and Red Sox have an advantage to how much they can spend, but this has also proven to bite them in the butt to a certain extent as well. Getting out of the contracts of Jorge Posada, AJ Burnett, A-Rod, and others will no doubt help the Yankees a great deal in their future, and the same could be said for the Sox with Lackey, Matsuzaka, JD Drew and others. 

I'd also have to agree with you on the draft slot rules Knobler. This doesn't make any sense to me at all, for pretty much the same arguments you've laid out above. That rule basically handicaps teams like the Rays, Royals, Pirates, Blue Jays, etc, that have been focusing on the draft for the past several seasons. The idea behind giving draft picks according to the previous year's record is that you give the league's bottom feeders a chance to close the gap in the future. If this rule had applied, say when the Nationals signed Steven Strasburg, would they have been unable to sign Bryce Harper the following year? If so, that's a stupid system, and I'm not sure why it was voted in.  

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