38 replies to this topic

[Jeff Van GULLY]

So details are emerging on what is happening to the draft with the new CBA:

• The draft signing deadline moves to the July 12-18 range from August 15th. Depending on the date of the ASG
• Cubans under 23 years old with less than three years of professional experience will be considered amateurs and count against international spending limits
• Teams that go more than 5% over slot get a 75% tax
• From 5-10% over slot, a 75% tax and loss of 1st-rd pick the next year
• Teams that go over slot by 10-15% face a 100% tax and the loss of a first and second rounder
• Teams that exceed slot by 15% or more face a 100% tax and the loss of two first rounders
• No more major league deals
• Starting in 2013-14, teams will be able to trade money from their spending allowance for international players
• There will be six draft picks immediately after the first round given out via lottery to teams with 10 lowest revenues, 10 smallest markets (A club’s odds of winning the lottery will be based on its prior season’s winning percentage)
• Every team will have $2.9M to spend in international bonus money this season. Money is not tradeable this year.
• If a player signs after the 10th round for more than $100,000, the excess money will go against a team's draft pool.
• Overall money to be spent in draft and int'l FA in line with 2010 figures. CBA attempts to give advantage to bad teams via larger pools.
• Worst teams, for example, will receive ~$5M in int'l $. Best teams will get ~$1.8M. Not sure on exact figures for draft, but similar %.
• Teams that don't exceed their draft pool will have a chance to obtain picks from teams that over-spent

Clearly this is a significant overhaul of the amateur signing system as we know it. The owners wanted to reduce costs on young players and have done so in this deal. The penalties for going over slot look stiff enough to make this a de facto hard cap. Players union probably didn't mind a reduction in expenditures on amateur talent as it increases money to be spent on current union members.

I'm very surprised by the cap on international free agents.

Good to see the signing deadline move up and glad to see no more MLB deals.

The days of the Red Sox using their financial muscle to acquire elite talent in the draft are over. Another byproduct is that two-sport stars will not have as much financial incentive to drop their other sport and commit to baseball full time. I don't see how that is a benefit for baseball. Doing anything to attract less elite talent to the sport is foolish.





Edit: Ack, how do I edit the topic name??

Edited by Jeff Van GULLY, 22 November 2011 - 01:43 PM.

[gammoseditor]

Wow, lots of terrible things in here for baseball, but one is that more high school athletes are going to be taking football scholarships. Jim Calis tweeted that 20 teams went more than 16% over slot last year which would have triggered a 100% tax and loss of two first rounders.

[Seabass177]

My first response to this is that it's incredibly short-sighted on the part of both MLB and the MLBPA. The idea is to have the best athletes to choose to play baseball, but now they're limiting the talent that can come into the draft. If you're a HS kid and a team drafts you outside the first round, you're not getting paid to give up school. All of the two-sport athletes like Zach Lee, Mike Stanton, Brandon Jacobs, etc. have much less incentive to go pro in MLB. The limits on international bonuses make no sense to me either. A team should be able to spend it's money however they deem fit. And it's not like the Yankees and Red Sox are the top spenders in the Rule 4 Draft, it's the Pirates, Nats and other teams that recognize that spending through the draft is the smartest investment a team can make. Would you rather give five high school lottery tickets $5M and see what happens, or give the Clint Barmes' of the world $5M per year?

I get that amateurs aren't members of the MLBPA, but everyone that is in the MLBPA was an amateur at some point. They're taking a ton of leverage away from their future membership so Selig can have an effective hard slotting system. It's not like teams were throwing away tens of millions of dollars on amateur talent - they were taking calculated risks and investing in youth. This is going to hurt MLB immensely, especially internationally.

[Lose Remerswaal]

What does this mean for Japanese free agents? I don't see anything about posting rules changing, but does this mean the next Yu Darvish is subject to this spending cap?

[Seabass177]

What does this mean for Japanese free agents? I don't see anything about posting rules changing, but does this mean the next Yu Darvish is subject to this spending cap?

It looks like f they're under 23, it looks like they'd be subject to the new regulations. I'm assuming they'd be consistent regardless of whether they're Cuban or from another country.

[Jeff Van GULLY]

What does this mean for Japanese free agents? I don't see anything about posting rules changing, but does this mean the next Yu Darvish is subject to this spending cap?

Posting still exits, for now. Japanese free agents are usually well over 23 due to contractual relationship between Japanese players and the NPB.

Posting isn’t a top priority on MLB’s schedule today. “We will revisit the protocols after the CBA,” said Rob Manfred, the league’s labor chief currently hammering out a collective-bargaining agreement with the players. It is an issue, however, as the posting fee does not go toward the luxury tax and thus keeps millions of dollars from coming into MLB’s coffers as well.

Edited by Jeff Van GULLY, 22 November 2011 - 02:09 PM.

[Andrew]

I like that there are no more major league deals, those almost always end up being a bigger headache than they are worth, but everything else seems bad for baseball and bad for the teams who spend their money intelligently.

I guess the importance of scouting goes up even more now that there are simply fewer options you're allowed to pursue.

[billy ashley]

This is just awful, worse yet, in terms of parity- we’re not fixing a problem that isn’t in large part correcting itself.

Toronto, Pittsburg, Tampa, and Washington have been among the most aggressive in drafting over the past couple years.

If people are worried about parity, all they need to do is eliminate compensation… sure that would hurt the Red Sox; but it wouldn’t hurt the game like this “solution” does.

[TimScribble]

The six extra draft picks via the lottery after the first round is ridiculous.

I feel like this deal was struck to mostly hurt big spending teams like Boston or NYY. But as mentioned, this is going to hurt teams like Pitt and others that spend big on the draft.

[OCD SS]

One question: if draft spending is all tied to the slots set by the comissioner's office, have they been set (and more importantly) increased to more realistic levels? If the traditional slots are maintained, this is absolutely horrible, if they've been increased then it would be less of an issue. I find it hard to believe that the majority of teams (2/3) would implement something that penalizes the majority.

[Spacemans Bong]

One other knockoff is that it will severely retard the growth of baseball outside of its traditional markets. Who is going to spend $10K on a Czech phenom catcher now? Or a Chinese shortstop?

Considering we had MLB's first ever Italian player this year and the Dutch winning the World Cup, it seems short-sighted and stupid.

[Plympton91]

it seems short-sighted and stupid.

Just like everything else Bud Selig has done as commissioner of baseball?

As a fan of college baseball, these rules are fantastic! The quality of college baseball will be much greater as more players that are drafted in the mid-rounds will attend college -- a full scholarship to an elite school will be worth a whole lot more than the signing bonus. As a fan of a Class-A minor league team, these rules suck. I'm not sure if the quality of play is important to the owners of those teams, but I have to think that low-A teams are going to be pretty horrible in the coming years. It will likely be a lot more filler, failed international signings, and low-ceiling college players than ever before.

And, this is basically a group of 30 filthy rich Americans voting to screw over dirt poor Latin American families. I expect to see an Occupy Fenway Park protest as a result

[TheGoldenGreek33]

Hypothetical: Player X, a very talented prep arm, has a combined 75% athletic and academic scholarship to play ball at UCLA. He gets picked by the Giants at 1.20, where the slot was $1.4 mil in 2011. He carried a 4.0 GPA in high school, plans on studying econ and his mother is "very intent on him getting an education". The Giants, sticking to MLB's slot guidelines, offer him slot. What does he do?

Answer: A 75% scholarship to UCLA is worth ~40k for four years. That's 3% of the proposed signing bonus. Financially, it still makes an overwhelmingly amount of sense to play pro ball.

[tbrown_01923]

Hypothetical: Player X, a very talented prep arm, has a combined 75% athletic and academic scholarship to play ball at UCLA. He gets picked by the Giants at 1.20, where the slot was $1.4 mil in 2011. He carried a 4.0 GPA in high school, plans on studying econ and his mother is "very intent on him getting an education". The Giants, sticking to MLB's slot guidelines, offer him slot. What does he do?

Answer: A 75% scholarship to UCLA is worth ~40k for four years. That's 3% of the proposed signing bonus. Financially, it still makes an overwhelmingly amount of sense to play pro ball.

An over simplification, but I think I agree with your result. The scholarship is not taxed (or is it), the bonus is (at 40%?) and the scholarship is over four years ( ~40k * 4yr ~ 160k) so the value of the scholarship is ~20% of the bonus. The value of a college diploma is more than the cost of attending college. It is the 60% higher pay than those with out it. At some point if he wants to attend the university, he needs to make sure he puts the 160k into a 529 earning a ferocious rate (tyuition has been inflating at 6-8% annualy).

But in the end they (or at least I would) take the money and sign for their shot.

[billy ashley]

Hypothetical: Player X, a very talented prep arm, has a combined 75% athletic and academic scholarship to play ball at UCLA. He gets picked by the Giants at 1.20, where the slot was $1.4 mil in 2011. He carried a 4.0 GPA in high school, plans on studying econ and his mother is "very intent on him getting an education". The Giants, sticking to MLB's slot guidelines, offer him slot. What does he do?

Answer: A 75% scholarship to UCLA is worth ~40k for four years. That's 3% of the proposed signing bonus. Financially, it still makes an overwhelmingly amount of sense to play pro ball.

The bigger issue I see (and as others have pointed out) is that for the very small percentage of elite talents who excel at multiple sports, we’ve made it more difficult for them to choose baseball.

Given the volatility seen in the development prospects, a guy who has a very good shot at starting on a significant college program in football may be better served going that route, as they’ll likely see the NFL by the age 23.

Big bonuses negate the volatility in potential earnings.

[Seabass177]

Hypothetical: Player X, a very talented prep arm, has a combined 75% athletic and academic scholarship to play ball at UCLA. He gets picked by the Giants at 1.20, where the slot was $1.4 mil in 2011. He carried a 4.0 GPA in high school, plans on studying econ and his mother is "very intent on him getting an education". The Giants, sticking to MLB's slot guidelines, offer him slot. What does he do?

Answer: A 75% scholarship to UCLA is worth ~40k for four years. That's 3% of the proposed signing bonus. Financially, it still makes an overwhelmingly amount of sense to play pro ball.

Something I read right after the CBA was announced (but I could be mistaken) is that if teams are willing to add cost of attending university to signing bonuses, that money won't be subject to the cap regulations.

That being said, Callis reported that if a team doesn't sign a player in a slot, they can't spend that money elsewhere in the first 10 rounds. So, if you're the Dbacks two years ago and try to sign Barret Loux at #7 overall, but he fails his medical, you don't get the ~$2M to try to sign a flyer you took in the fifth round. That is monumentally stupid. I don't know why teams would restrict themselves like this. It seems to me that more and more clubs were realizing the foolishness of these slot numbers the Commissioner's office and that the best way to acquire talent is through the draft. This isn't a lot of money - we're talking about $2-5M per year, or the last couple guys on a 25 man roster. It's just incredibly frustrating. Here's to hoping Boras can find some loopholes.

[tbrown_01923]

Something I read right after the CBA was announced (but I could be mistaken) is that if teams are willing to add cost of attending university to signing bonuses, that money won't be subject to the cap regulations

Are we talking about the cost of attending a unvisity or the entire signing bonus? I have a feeling you mean the former

Here's to hoping Boras can find some loopholes.

Turning to Boras for salvation just feels odd.

[Seabass177]

Are we talking about the cost of attending a unvisity or the entire signing bonus? I have a feeling you mean the former

I do mean the former. Again, I'm not sure about that.

Tango makes an excellent point about one loophole teams could exploit - teams only lose their allocation money if they don't sign a player. However, if they sign a guy to a $1M bonus and his slot has a $2M figure, then they get that extra $1M to play around with in the other picks they have in the first ten rounds.

I'm not averse to there being a pool each team can use (so long as it's a reasonable number) but lowering the pool because a team doesn't sign a player at a certain slot doesn't make sense to me. Let teams spend their money how they want to.

Edited by Seabass177, 29 November 2011 - 12:16 PM.

[TheGoldenGreek33]

The bigger issue I see (and as others have pointed out) is that for the very small percentage of elite talents who excel at multiple sports, we've made it more difficult for them to choose baseball.

Given the volatility seen in the development prospects, a guy who has a very good shot at starting on a significant college program in football may be better served going that route, as they'll likely see the NFL by the age 23.

Big bonuses negate the volatility in potential earnings.

They can, and do, still play both. There might be one player each year that is talented enough to play pro football and baseball. And usually, if they are talented enough to get drafted in the NFL, that's what they're a better prospect at (see: Jake Locker). It's still a non-issue to me.

[502 to Right]

Is there a central list anywhere of drafted players the Red Sox signed for substantially more than slot money since 2003?

[steveluck7]

You also need to factor in quality of life into the baseball vs. football equation. Take Brandon Jacobs, even if he were drafted in 2012, he'd be looking at a significant bonus (aside from however "over-slot" the sox might be willing to go) vs.no big payday and being pounded in the SEC for at least 3 years to still have no guarantee coming out the other side. MLB still has the advantage of the scouts and agents in these kids' ears using this or similar "scare tactics" leading up to the draft.

[gammoseditor]

They can, and do, still play both. There might be one player each year that is talented enough to play pro football and baseball. And usually, if they are talented enough to get drafted in the NFL, that's what they're a better prospect at (see: Jake Locker). It's still a non-issue to me.

You're missing the point. The issue is high school kids who are weighing football scholarships vs baseball signing bonuses. Casey Kelly and Brandon Jacobs are two examples the Red Sox have drafted, and that's just one team. They both likely would have gone to college instead of signing for slot recommendations.

[amfox1]

Go to the soxprospects.com wiki, under Draft Signing Bonuses.

[billy ashley]

You're missing the point. The issue is high school kids who are weighing football scholarships vs baseball signing bonuses. Casey Kelly and Brandon Jacobs are two examples the Red Sox have drafted, and that's just one team. They both likely would have gone to college instead of signing for slot recommendations.

Exactly,

What are the odds that an extremely talented 18 year old pitcher with a repeatable delivery and a great deal of polish enjoys a meaningful major league career and thus collects a major league paycheck?

What are the odds that the starting Quarterback at the University one day enjoys a meaning career in the NFL? Or even the Canadian Football league?
There’s just so much that can go wrong with prospects between the ages of 18 and 22 in baseball. Yes, the same is absolutely true in football, but
in football you probably don’t see the attrition rates we see with pitchers.

In baseball, an exceptional athlete like Brandon Jacobs could very easily never make the majors… in football; in football, a guy with as much athleticism as Jacobs compared to the rest of the league will almost certainly get a look at the pros… and a pro paycheck.

It’s going to be worth the risk for some guys (a small number for sure) to go play football in college when they’re 18 if we remove the money.

Edited by billy ashley, 29 November 2011 - 04:49 PM.

[tmorgan]

Exactly,

What are the odds that an extremely talented 18 year old pitcher with a repeatable delivery and a great deal of polish enjoys a meaningful major league career and thus collects a major league paycheck?

What are the odds that the starting Quarterback at the University one day enjoys a meaning career in the NFL? Or even the Canadian Football league?
There’s just so much that can go wrong with prospects between the ages of 18 and 22 in baseball. Yes, the same is absolutely true in football, but
in football you probably don’t see the attrition rates we see with pitchers.

In baseball, an exceptional athlete like Brandon Jacobs could very easily never make the majors… in football; in football, a guy with as much athleticism as Jacobs compared to the rest of the league will almost certainly get a look at the pros… and a pro paycheck.

It’s going to be worth the risk for some guys (a small number for sure) to go play football in college when they’re 18 if we remove the money.

Pitcher attrition vs. attrition of college quarterbacks into professional ranks is an interesting empirical question that I don't think you dismiss it quite so quickly. OL and DL at D1 probably do have a lot lower attrition than minor league pitchers, but there isn't a lot overlap there other than Sabathia. That said what baseball is losing is part of the first mover advantage to offer money, which is especially significant for the very top athletes. Before this CBA a team like the Sox could easily pay the difference as a bonus between what that player might earn in their first couple years in the pros in the NFL compared to the minors, now that is more difficult. I'm a little hopeful that the increased attention to concussions in football will keep two sport athletes playing top level baseball in college more and considering the option of baseball for longer.

[nvalvo]

This might be a dumb question.

Is there anything preventing teams giving their minor league ballplayers higher salaries?

My recollection is that minor league ballplayers mostly make around $60,000/year. Let's say the slot for a draft spot is $2.5m, and a team wants to offer a player an over-slot bonus: could the team get around the cap by offering the player the slot bonus, but also a higher annual salary?

Edited by nvalvo, 29 November 2011 - 08:21 PM.

[Plympton91]

Hypothetical: Player X, a very talented prep arm, has a combined 75% athletic and academic scholarship to play ball at UCLA. He gets picked by the Giants at 1.20, where the slot was $1.4 mil in 2011. He carried a 4.0 GPA in high school, plans on studying econ and his mother is "very intent on him getting an education". The Giants, sticking to MLB's slot guidelines, offer him slot. What does he do?

Answer: A 75% scholarship to UCLA is worth ~40k for four years. That's 3% of the proposed signing bonus. Financially, it still makes an overwhelmingly amount of sense to play pro ball.

If that was a response to me, then I wasn't talking about first rounders (where, as others pointed out, the concern is losing baseball players to football and basketball).

Now, do the same calculation you just did for a kid drafted in the 4th round with a scholarship to Stanford or USC instead of UCLA.

[TheGoldenGreek33]

So wait -- now the concern IS losing players to football and basketball? I can get on board with hating the idea that teams will lose out on drafting a bonus baby who's a two-sport athlete, but just because they're going to play football in college doesn't mean they're going to play in the NFL. Kelly and Jacobs were solid football prospects, but I have a hard time believing they chose baseball as a career because of their signing bonus and not because, you know, they were better at it.

Heck, look at Golson. He was offered $1mil to play for the Sox and turned it down to play football and baseball at Ole Miss. It's not all about the money.

edit-add: Under the old draft rules, money was absolutely the reason Kelly and Jacobs signed. From an opportunity cost standpoint, bonus babies needed to go. However, there's no logical argument that has been made that, under the new rules, two-sport athletes will choose the other sport.



In other news, the draft has been cut to 40 rounds. Bye-bye nepotism picks (hopefully).

Edited by TheGoldenGreek33, 30 November 2011 - 04:19 AM.

[OttoC]

...
In other news, the draft has been cut to 40 rounds. Bye-bye nepotism picks (hopefully).

What does it matter if there is a "nepotism" pick?

[Section15Box113]

What does it matter if there is a "nepotism" pick?

If you pick, say, the son of someone important in the organization, that individual will be happier, will do a better job due to all of the goodwill, and will remain with the Red Sox for the balance of their career.

Right?

[TheGoldenGreek33]

What does it matter if there is a "nepotism" pick?

The pointless debate amongst executives of whose son or cousin to draft and in which round in fear of offending/embarrassing a family, primarily. But also giving the nepotism pick false hope, even though it's blantantly obvious why they were selected. Nepotism picks diminish the nature of the draft and it's typically always a wasted roster spot/investment, regardless of how small the signing bonus was.

I'd actually be willing to bet it's why they shortened the draft.

Edited by TheGoldenGreek33, 30 November 2011 - 02:46 PM.

[OttoC]

The pointless debate amongst executives of whose son or cousin to draft and in which round in fear of offending/embarrassing a family, primarily. But also giving the nepotism pick false hope, even though it's blantantly obvious why they were selected. Nepotism picks diminish the nature of the draft and it's typically always a wasted roster spot/investment, regardless of how small the signing bonus was.

I'd actually be willing to bet it's why they shortened the draft.

How many teams actually sign forty draft picks in a season? Since there is going to be "hard" slotting for signing bonuses, teams aren't going to be using (say) 30th picks on hard signs, so I suspect we will still see some nepotistic picks. Maybe not as many, but it still is a way to "reward" some of the long-term, low-pay employees.

[Bigpupp]

I'd actually be willing to bet it's why they shortened the draft.

Bullshit. It had to do with money and that’s it.

[Lose Remerswaal]

No nepotism picks makes this guy sad

[Plympton91]

So wait -- now the concern IS losing players to football and basketball? I can get on board with hating the idea that teams will lose out on drafting a bonus baby who's a two-sport athlete, but just because they're going to play football in college doesn't mean they're going to play in the NFL. Kelly and Jacobs were solid football prospects, but I have a hard time believing they chose baseball as a career because of their signing bonus and not because, you know, they were better at it.

Heck, look at Golson. He was offered $1mil to play for the Sox and turned it down to play football and baseball at Ole Miss. It's not all about the money.

edit-add: Under the old draft rules, money was absolutely the reason Kelly and Jacobs signed. From an opportunity cost standpoint, bonus babies needed to go. However, there's no logical argument that has been made that, under the new rules, two-sport athletes will choose the other sport.

Why do you have a hard time believing that? No senior in high school knows with much certainty which sport they'll be better at as a 22 year old. So, the decision they have is whether to bank $1 million guaranteed today to play baseball, or they can take the chance that they will be a pro football player 4 years from now.

Unless you believe the laws of supply and demand are inoperative among two-sport prep athletes, then there's no logical argument to be made that limiting the bonus that can be paid to mid-round draft picks won't result in fewer of them chosing to play baseball.

[OttoC]

There is another factor other than which sport a high schooler will choose and that is whether he thinks he can get through college. But even if the athlete's choice is baseball and college, he is better off accepting a football scholarship. NCAA rules limit baseball scholarships: only 27 players can be on scholarship and each scholarship must be for at least 25% of the tuition, room and board. Compare that to football where 85 full scholarships are available for about 87 roster spots (active and inactive), or basketball where 13 full scholarships are available for 12-15 roster spots.--http://businessofcol...cs-scholarship/

The median gap in annual earnings between a high school and college graduate as reported by the U.S. Census Bureau in 2010: $19,550.--Pew Research Center. So, if a high school graduate gets a full ride through college and graduates, but does not get drafted by a sport, he should come out ahead. If he has to work for 40 years before retiring, he will earn perhaps $800,000 more than if he was drafted in the, say, 29th-round in the June draft and never gets above Double-A. Besides, being a college athlete is probably more fun than playing in the Pioneer League.

Note: the earnings differential does depend, in part, on the career field chosen.

[Carmine]

Dustin Parkes on the top 10 things he learned at the SABR Analytics Conference:

7. The new CBA might make investments in player development more worthwhile.

With the money restrictions placed on international free agents and draft picks, it’s very possible that the appeal of a strong player development system, that not only includes better instruction and premium facilities, but also a willingness from the organization to properly take care of its hopefully future stars, will be the new market inefficiency.

Think about it in these terms: Who would a player from the Dominican Republic receiving similar offers be more likely to sign with: the organization that has an instructional academy in his hometown or the club with which he’s completely unfamiliar?

link

I see.

Off-topic, but I loved this:

3. Intangibles remain important, even for smart general managers.

One of the most surprising parts of the analytic conference for me was the amount of time that the general managers panel spent on discussing intangibles. Despite all the advancements in metrics that were paraded around during the three day event, Chris Antonetti, Jerry DiPoto and Doug Melvin all agreed that makeup still often outweighs what the scouts say and the metrics might suggest about a player.

DiPoto specifically mentioned the importance of a player’s “will to.” He described the term as the willingness of a player to essentially work toward improving not only himself but his teammates as well.

As much as bloggers and independent analysts might think we have it all figured out, there’s an entire world of information that we’re not privy to, that leads to a ton of personnel decisions that are otherwise left inexplicable with numbers alone.

Edited by Carmine, 20 March 2012 - 05:23 PM.

[Omar's Wacky Neighbor]

Off-topic, but I loved this:

So they are still checking if a prospect has a hot or an ugly girlfriend.

From the sound of it, anything not phyical is considered an intangible. So I guess that means that the psych and intelligence testing that the Sox do is considered intangible? I'd hardly consider either of those as intangibles.

Edited by Omar's Wacky Neighbor, 21 March 2012 - 09:37 AM.

[Carmine]

Oh, yeah. It's like the time the Braves asked Pete Hissey if he was afraid of animals in cages. Those pre-draft psych tests are crucial to determining a prospects make up.