No one quite knows what the MLB draft will be like on June 4th, but it is sure to be interesting.
The new collective bargaining agreement agreed to last winter has changed the draft by implementing a new spending cap. Each team gets a certain amount of money to spend in the first 10 rounds of the draft. The money given to each team is based on a slotting system. Each pick, including compensatory picks, are assigned a bonus based on their position in the draft (higher picks get bigger bonuses). Each pick for the team is then added up to get the bonus pool they are allowed.
The money from the bonus pool can be split between players in any fashion the team so desires, so money left over from a player who signs for under the recommended slot value can be spent on other players in the draft. Don’t be surprised to see several teams working this strategy, as teams with top picks could become handcuffed by signing demands of high picks, leading them to avoid picking harder to sign players later in the draft and leaving them to be drafted by teams with more flexibility.
This sort of strategy is especially true in this draft, as it seems like most teams see a thin pool of 6-8 high ceiling players at the top, and an amorphous blob of similarly talented players with lower ceilings or bigger flaws in their game there-after.
If you are wondering why teams wouldn’t simply load up on hard to sign players after the 10th round, they won’t because every player from the 10th round on is assigned a $100,000 slot, and any money spent over that counts toward the spending cap.
You might also think teams may want to punt a pick entirely in a weaker draft, choosing to take a pick next year (same spot + 1) in what might be a better draft and use the signing bonus money on later picks. MLB thought of this as well, which is why if a player isn’t signed, the bonus money is lost and cannot be spent on other picks.
The reason for these rule changes stems from the strategy Theo Epstein popularized. The Red Sox would often draft hard to sign players (usually high school players) in the late (after the 6th) rounds and throw several million dollars their way. This allowed the Red Sox to get a 2nd round player talent-wise much later in the draft, where major league talent isn’t often found.
This strategy has obviously been nearly destroyed by the new CBA, especially since teams will now run the risk of not being able to sign a player after drafting easier to sign (and typically lower quality) players. Teams could end up with millions in unspent dollars by the failure to properly execute this strategy.
Scott Boras can’t be happy with the new system, as the agent who is more responsible for these new draft rules. The new system still won’t stop him from getting more than slot for his guys. Look for him to ask teams to punt their later picks on guys who will sign for peanuts in order to pick up a few extra hundred thousand for his guys. He’ll also tell teams to overpay by just enough to keep them from losing a pick, but have to pay the additional tax.
This could even lead to some sneaky tactics, as Keith Law pointed out on an ESPN Insider Draft podcast. Players could tell teams to not even bother drafting them because teams later in the draft could punt a compensatory pick (about $1 million in bonus money average) and sign top picks for more than teams just after the very top of the draft could. This would create an auction setting, where the highest bidder gets the best player, since there’s only a certain amount of dollars available.
It’s unclear if any teams will try to work the system this way, but it’s always a possibility.