It’s late on a Tuesday night. I’m drinking Sierra Nevada Hoptimum. Carlos Quentin hit 2 home runs tonight, and then Logan Forsythe and his glorious beard hit a walk off home run in the bottom of the 9th. At Petco Park. Impressive. I’ve got tomorrow off work and I can't stop thinking about how the new CBA made the Padres select Max Fried over Mark Appel in the first round of the MLB draft. I’m that nerd.
In case you missed it, the 2012 MLB rule 4 draft began with the 1st round on Monday evening, continued with rounds 2-15 today, and will conclude tomorrow with rounds 16-40. All told, roughly 1200 men I’d never heard of before and 30 I learned about just recently will get selected over these 3 days. This is a huge undertaking, and in their new Collective Bargaining Agreement, the owners and players have totally screwed things up. Why? Because the owners want to save money, and players who are already in the league don’t care about the players who aren’t.
Because you almost certainly missed it, here’s the difference between this year's draft and previous years: teams now have a cap on how much they can spend on draft picks. Also, the draft was cut from 50 to 40 rounds, but that’s not important, the cap is what matters. Each pick from 1st overall to the last pick of the 10th round is given a slot value, and the total amount of slotted money for a team’s picks in the top 10 rounds is added up to equal their cap. For example, the Padres had 14 picks in the first 10 rounds, and a total of roughly $9.9 million to spend.
Not only have they set a cap, they’ve decided to enforce it. For every dollar you spend above your cap up to 5%, you are fined 75 cents. If the Padres spend 5% above their $9.9 million cap, they will be fined approximately $371,000. If they spend more than that, but less than 10% above their cap, they continue to be fined and lose their 1st round pick in the next draft. If they spent more than 10% above their cap, there are the fines and also the loss of their 1st and 2nd round picks. These are steep penalties, and teams will be very reluctant to reach that 5% limit. Oh, two more things: if you fail to sign a player in the top 10 rounds, the slotted value of that pick is removed from your bonus pool. Also, any player drafted after the 10th round that gets a bonus over $100,000 counts towards your cap, so you can’t let a player with high demands slip through the cracks, draft him after the 10th round, and then pay him big bucks to sign.
For the Padres, the new CBA and its rules came into play immediately. After their dream pick, 18 year old Puerto Rican SS Carlos Correa, was taken 1st overall, the player many had projected to be 1st overall, Stanford RHP Mark Appel, fell down to the Padres selection, the 7th overall pick. The rumor was out that Appel, as a college junior with the option to return to Stanford for a senior season, was asking for a ton of money to sign. Lame duck GM Josh Byrnes and his well-qualified team passed on Appel, opting for top high school pitcher Max Fried. Normally, if the Padres don’t take the best player available because he’s deemed too expensive, they’re considered cheap. Appel was reportedly ranked just ahead of Fried on the Padres’ draft board. Should they have taken the best player available? Has this notoriously cheap franchise gone cheap again?
No. Here’s why. The Pirates took Appel with the 8th overall pick. They have a $6.6 million cap. The 8th pick in the draft has a $2.9 million slot value ($100,000 less than the Padres at 7). If Appel demands $4 million to sign, that’s $1.1 million that Pittsburgh is either going to have to cut from their later picks (by taking college seniors with limited ability who will sign for well under their slot values), or they’re going to have to be willing to pay steep fines and lose their picks next year. If Appel demands $5 million, even worse. If Appel demands $6 million, a number that was reported but not confirmed, that’s almost the Pirates’ entire bonus pool.
Chances are Mark Appel is going back to school to hope for better next year. The Padres took the 2nd best player available, who will likely accept slot money or perhaps slightly less ($3 million is good money for most), and maintained their ability to be aggressive with their remaining 13 capped picks, including taking 2 more high school pitchers in the compensation round who may have dropped out of the 1st round due to signability concerns.
In my opinion, this new system flat out sucks. You’re going to see a lot of talented high school players fall out of the top 10 rounds, maybe not even drafted at all, because they have strong college commitments or high salary demands (the two often come hand in hand). One of the advantages the Padres had was an ability to be hyper-aggressive in the draft because draft picks are generally inexpensive. Even if you spend $15 million on bonuses in a draft, it’s worth it if you can get 6 pre-free agency years of an all-star caliber player.
Last year, the Padres went for broke on 2 high schoolers with strong college commitments, drafting RHP Joe Ross 25th and C Austin Hedges 82nd, spending close to $6 million combined to keep them. This year, those two picks would have had a combined slot value of less than $2.5 million. If the new rules had been in effect last year, Ross and Hedges would be playing for UCLA right now, and the Padres farm system would be significantly worse.
College seniors are generally seen as easy signs. They’re older (bad), if they’d have been worth anything significant they would have been drafted and signed as juniors (bad), and because they don’t have the option of going back to school for another year they don’t have a lot of leverage. Usually these guys can wait until the later rounds. This year, so many seniors were being picked in the top 10 rounds due to signability that Baseball Prospectus’ Kevin Goldstein tweeted “the new system was supposed to line up talent with draft slot. With all the senior sign crap from rounds 4-10, it's a complete failure.”
The owners might disagree. The actual purpose of the new system was to limit draft expenditures, not to line up the talent. The owners don’t care if a kid refuses to sign and goes to college. Their goal was to eliminate agent leverage. In that way, the new system will prove to be a huge success. Teams scrambled to pick signable players who will take under slot deals in order to free up a couple hundred thousand for their high-ceilinged high school draftees. Everybody is trying to stay within their cap, working within the confines of the new system. The owners won, baseball lost, and the Padres took Max Fried instead of Mark Appel for good reason.In conclusion: Bring Back the Brown. And the old draft system. I'm buzzed. Hoptimum is good stuff.
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