- Kristi Dosh, Sports Business
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Baseball’s free agents are signed and in spring training, so now the focus for many in the league’s front offices is how to draft and sign high school and college players under the new pool system that is part of MLB’s collective bargaining agreement.
Under the new provision, teams will be assigned a signing bonus pool each year for their picks in the first 10 rounds. The system is slotted, and each pick from 1 through 300 has an assigned value, which ranges from $7.2 million to $125,000 this year. The new slotting system carries stiff penalties for teams that pay too much.
If a team exceeds its total bonus pool by 0 to 5 percent, it will be charged a 75 percent tax on the overage. If the pool is exceeded by 5 to 10 percent, the penalty is a 75 percent tax on the overage and the loss of a first-round pick the following year. A 10 to 15 percent overage carries a 100 percent tax and the loss of first- and second-round picks the following year. If a team exceeds the pool by more than 15 percent, it will incur a 100 percent tax and the loss of two first-round picks.
Baseball America recently computed the signing bonus pools for each club. Teams like the Pirates, Rays, Diamondbacks, Royals and Nationals will spend far less of their budgets on draft picks than they have in years past.
The Pirates will see the biggest cut, with only $6.6 million available for the 11 picks they have in the first 10 rounds. Last year, the Pirates spent $16.4 million on the first 10 rounds; the club spent more than any other club on draft picks overall from 2007-11.
Team President Frank Coonelly told The Associated Press in November he didn’t fear the new system would negatively impact small market clubs like his.
“I think it will do the exact opposite,” said Coonelly. “Teams finishing with the poorest records should have access to the very best talent coming into the game, and the decisions will be made on talent as opposed to signablity.”
Ed Hartwell, former assistant director of scouting for the Arizona Diamondbacks, said former free-spending teams like the Pirates won’t have any trouble. “It doesn’t matter how much money you throw at the wall, if you have a team with a solid scouting department, they win. The teams who spend the most money, they generally spend a lot on scouting and player development.”
Hartwell said now more than ever, the ability of a scout to form a relationship with a player will be key: “Before you could overcome [the lack of a relationship] with an open checkbook. Now you’ve got to have those relationships.”
The Kansas City Royals are in a position similar to the Pirates, with only $6.1 million available, compared to the $11.4 they spent last year. The team was the league’s third-highest spender over the past five drafts.
General Manager Dayton Moore declined to comment; however, in November following the announcement of the new provision he told the Kansas City Star, “We really believe that whatever the rules are, we have to adapt to them and be successful within the confines of the structure. That’s our mind-set. I think there is still a lot of flexibility in this new agreement for you to be creative.”
Being creative is what some people are afraid of, however.
“What you’re going to start seeing -- which is totally illegal -- are side deals,” said Hartwell. “I think you’re going to start seeing those pop up, and four or five years down the road someone will get caught.”
Another unintended consequence of the draft may be a reduction in the number of high school players who choose to forego the draft in favor of college. Asked if he thought that trend might emerge, Astros GM Jeff Luhnow said, “Absolutely. There’s going to be a lot of high school kids who don’t get the money they or their parents think they should get based on year’s past. The option to go to college is going to become more attractive.”
Hartwell doesn’t agree. “Will more guys start going to college? No way,” said Hartwell. “You’ll have enough who just want to go play, who are going to tell their parents they want to go play.”
“What [clubs] need to do is bring in companies that can help scouts learn what they call ‘mind signals,’” said Hartwell. “You’re watching for the [high school] kid that has to play -- doesn’t want to go to school, has to play.”
Ray Montgomery, the Arizona Diamondbacks scouting director, said there might be a learning curve under the new system, especially for high school players. “One thing you have to do is a good job of educating the players. There’s been a perception the total money available has been drastically reduced, but it’s greatly increased from the 2010 draft.”
Baseball hasn’t had a major change in the draft in quite some time. Accordingly, some anticipate this year’s draft could be a rough adjustment for players. “Maybe this first group is going to suffer a little bit. They may be a little unsure about what we’re doing. But next year -- like when Cam [Newton] got half what [Sam] Bradford got -- next year, it’s not going to matter,” said Montgomery.