Why Over-Slot Deals Are Hurting Major League Baseball

The Pirates have been abusing MLB's slotting system for far too long.

There has been a lot of talk and speculation this year that Major League Baseball could switch to a hard slotting system during the off-season.  If you ask me, that would go a long way to really fixing what’s wrong with the game of baseball.

 

Never mind that teams like the New York Yankees and Boston Red Sox can go out and spend as much as they want, competing with less than a half dozen teams for the likes of C.C. Sabathia, Carl Crawford, Mark Teixeira, and Alex Rodriguez.

Let’s also ignore the international market, where players can sign right on July 2nd, with the ability to negotiate with every team in the Majors, and no restrictions on their bonus amount.

No, the real problem is that teams like the Pittsburgh Pirates (#1 in draft spending from 2008-2010), Baltimore Orioles (#4), and Kansas City Royals (#5) have dominated the draft spending, with their aggressive, and let’s be honest, unfair approach of offering over-slot bonuses to top prospects, in an effort to try and get as many talented players in the system as possible.

These teams are really taking advantage of a broken system, unlike the Yankees, who play within the rules by having a Major League payroll that is more than double the league average.  Obviously, the big spending by teams like the Pirates, Orioles, and Royals will only lead to a competitive imbalance that might result in the Yankees and Red Sox both missing the playoffs one of these years.  We already got a scare in 2008 when the Tampa Bay Rays not only stole the Yankees’ post season spot, but had the audacity to beat Boston in the ALCS and advance to the World Series.  How did they pull off this crime?  By investing in the draft.

Fortunately, the Rays were justifiably punished by losing Carl Crawford to Boston this past off-season, with Boston spending $142 M. In other words, Boston paid one player almost five times the amount that the Pittsburgh Pirates spent in the draft on 82 players over the last three years, including Pedro Alvarez, Jameson Taillon, Stetson Allie, and Tony Sanchez.  When you think about it, Boston had to pay $142 M for one star center fielder, but the Pirates were able to spend just $30 M and potentially get a great third baseman, a top of the rotation starter, a star closer, and an All-Star catcher.  How is that fair to Boston?

Baseball is already doing their part to try and stop teams like the Pirates.  Over the last few years, MLB has delayed over-slot bonuses from being signed so early in the signing period.  Fortunately, this has caused teams like the Pirates to lose a few signings, such as 2010 8th round pick Dace Kime.  Unfortunately, MLB can’t prohibit teams from making over-slot deals, they can only delay those deals and hope the players change their minds and either go to college, or accept less money in exchange for an additional two months of work.  That’s why we’ve seen teams like the Pirates get away with so many signings in the final two weeks of the signing period.  Don’t be surprised if these rule breakers do the same this year, as they’ve already had the nerve to take the 15th best prospect with the 61st overall pick, knowing it will take a well over-slot deal to sign him.

MLB needs to fix this system.  This isn’t like free agency, where teams can spend whatever they want, and the average contract is usually greater than the average year of draft spending.  This is much worse.  Unlike free agency, all 30 teams can take advantage of spending in the draft.  Fortunately, not every team is as bold as the Pirates.

For those of you pointing to the international market, and highlighting the fact that the Pirates signed Luis Heredia for $2.6 M, and spent about $5 M overall in 2010, don’t worry.  There has also been speculation that MLB could go with an international draft, or just include international players in the regular draft.  This would be outstanding.  Rather than allowing the Pirates to add two potential aces in Jameson Taillon and Luis Heredia, MLB would be forcing the Pirates to choose between the two, with the odd man out likely being drafted by another team.  Honestly, that’s how it should be.  Share the wealth.  Give other teams a chance to have potential aces in their system.  This isn’t Major League free agency, where the Yankees can spend $243 M on two big name pitchers like C.C. Sabathia and A.J. Burnett.  That spending is fine.  What’s not fine is the Pirates spending $9.1 M on two pitchers who both have the chance to be top of the rotation starters one day.  Again, how is that fair to the Yankees?

Ideally, MLB will install a hard slotting system this fall.  That might allow the Pirates one more year of adding guys like potential ace Gerrit Cole, but it will fix the ultimate problem of teams like the Pirates taking advantage of this efficient way to load up on talent.  I say, if the Pirates want to add guys who might lead their rotations, they need to follow the same rules as the Yankees and Red Sox and spend nine figures on one ace pitcher, rather than spending nine million on two ace pitchers.  The Pirates, and other so-called “small market teams” might cry about how they are unable to compete with the big spenders on the free agent market.  I point to the fact that a grand total of eight teams have combined to issue ten $100+ M contracts over the last five years, and only three of those contracts belong to the Yankees.  If seven other teams can do it, then that means every team can do it, right?

If you happen to do something other than watch the weekly Yankees/Red Sox game on ESPN Sunday Night Baseball, you might find that there are people who would disagree with me here.  Those people might say that over-slot deals in the draft are one of the only ways for teams like the Pirates to eventually compete with the likes of Boston, New York, Chicago, and St. Louis.  They might point to MLB’s free agency system, and note that the total spending in the 2010 draft from all 30 teams is less than what the Yankees committed to Alex Rodriguez prior to the 2008 season.  I point to something different.  I point to Bud Selig.

Bud Selig doesn’t tell me that free agency is broken.  He tells me that draft spending is broken.  This is a guy who, when faced with an issue on how to avoid the All-Star Game ever ending up in a tie again, decided to award home field advantage in the World Series based on the results of that exhibition game.  Clearly this is a solid track record of decision making.  Selig is only trying to protect the competitive balance that has allowed nine different World Series winners in the last ten years.

It’s not really significant that only one of those ten winners had a payroll that didn’t rank in the top half of the league.  It is significant that teams like the Rockies (2007), Rays (2008), and Rangers (2010) are finding their way in to the World Series with a payroll that ranks in the bottom half, all thanks to their commitment to the draft.  If this trend continues, we could be faced with a problem where almost anyone could win a World Series, despite the Yankees spending $200 M a year.

Even worse, what if the damage has already been done? What if, by some extreme good fortune, Gerrit Cole, Jameson Taillon, and Luis Heredia all realize their potential as top of the rotation starters, giving the Pirates three aces at the same time?  That’s the type of arsenal that makes teams like the Philadelphia Phillies World Series contenders.  Unfortunately for the Phillies, they have to pay $47 M in 2011 for Roy Halladay, Roy Oswalt, and Cliff Lee, while the Pirates could have their guys together for the league minimum around the 2015 season.  Can you imagine how horrible it would be for baseball if Pittsburgh was a contender?  Look at what happened to the NFL.  Pittsburgh won more Super Bowls than any other team, and now they’re in a lockout.

Baseball can’t afford a similar situation, especially when they’ve done a great job of making sure anyone can win a World Series, so long as they rank in the top half of the league in total payroll.  If they don’t stop these over-slot deals from going down, we might actually see a situation where anyone can win a World Series, regardless of how much they spend on major league payroll. Giving all 30 teams and their fanbases something to cheer for?  That’s never good for the sport.

Author: Tim Williams

Tim is the owner and editor in chief of Pirates Prospects. He started the site in January 2009, and turned it into his full time job during the 2011 season. Prior to starting Pirates Prospects, Tim worked with AccuScore.com, providing MLB, NHL, and NFL coverage to various national media outlets, including ESPN Insider, USA Today, Yahoo Sports, and the Wall Street Journal. He also writes the annual Prospect Guide, which is sold through the site. Tim lives in Bradenton, where he provides live coverage all year of Spring Training, mini camp, instructs, the Bradenton Marauders, and the GCL Pirates.

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